Few people know the rigors of understanding personal financial literacy like those who go from metaphorical “rags to riches.” Professional athletes often go from modest backgrounds to substantial wealth in a very short amount of time and suddenly find themselves having to learn how to make good financial decisions. NBA star James Harden of the Philadelphia 76ers has undergone this journey and wants to use his wealth to help young people establish strong financial skills. Through his nonprofit, Impact13 Foundation, Harden is partnering with Awoye Capital to cover the cost of finance e-courses for young people. James Harden and Jordan Awoye want to ensure that young people have the tools necessary to make smart financial decisions!
Athletes and Financial Literacy
Pro athletes have long been cautionary tales for financial literacy. While some have prospered through smart financial skills, disciplined budgeting, and savvy investing, many have made poor financial choices and been led astray by unscrupulous advisors. The Global Financial Literacy Excellence Center reports that a substantial percentage of former NFL and NBA players go bankrupt within 10-15 years of retirement. While this may not sound that alarming, retirement from professional sports usually occurs before age 30, meaning bankruptcies are occurring before individuals hit their mid-forties.
Financial literacy and investment knowledge are very important for professional athletes due to their careers’ short and unpredictable natures. Injuries can cut a career short, and contracts may not be renewed for many surprising reasons. There is often significant social pressure to live the stereotypical expensive lifestyle of a pro athlete. Fortunately, the NBA has made strides to educate rookie players on financial literacy in recent years. The Rookie Transition Program educates young players, some coming as fresh high school graduates, on budgeting, paying bills, saving and investing, and avoiding lavish spending on friends. While classroom lectures and e-courses may not always hit home, former pro athletes’ emotional warnings about losing fortunes often make rookies listen intently.
Pros Supporting Financial Literacy for Young People
Fortunately, James Harden is not alone as a pro athlete trying to help young people manage their money successfully. Several other NFL and NBA players advocate for financial literacy programs, including University of Pennsylvania (the Ivy League school commonly known as “Penn”) graduate and NFL linebacker Brandon Copeland. Copeland’s nonprofit organization, Life 101, offers free financial literacy resources. Other athletes have invested in the Goalsetter app to help parents have a tool to guide and oversee the saving and spending of their child or teenager through a smart debit card.
Outside of nonprofits, pro athletes are also educating directly by visiting schools and colleges to tell students about the importance of financial literacy. They are also setting up courses to help their current and former teammates, with the NFL hosting personal finance camps featuring current and former players who have learned lots of finance and investing skills, plus financial experts. Hearing directly from those who have dealt with the “rags to riches” challenges of handling pro contract paychecks will engage students and other young people who need to learn the importance of personal financial literacy.
Photograph: Matt Slocum/AP