NEW YORK (MainStreet) — Baltimore Ravens running back Ray Rice has gone from star NFL player to pariah since a video tape surfaced depicting him striking his then fiancée, Janay Rice, in an Atlantic City elevator.
“Professional athletes who become overnight millionaires sometimes fall into the trap of believing they are above the law and the societal lines of morality,” said Steven Siebold, author of How Rich People Think (London House Press, 2010).
While the average American needs an annual income of $150,000 to be considered wealthy and a net worth of more than $1 million to be considered rich, Rice had it all with $1.6 million in endorsements deals, youth and an NFL salary estimated at $24.2 million, according to Forbes.
But since the Rice domestic violence incident became public, several companies have dropped his endorsement deals, including Nike.
“Millionaires going bankrupt has more often to do with their unwavering belief in themselves, their hyper-optimism and their habit of calculated risk taking,” Siebold told MainStreet.
Rice is the latest example of a young man, who suddenly strikes it rich with a business, talent, an invention or connections only to sabotage it with one false move.
“It could be a case of overconfidence,” said Mike Finley, author of Financial Happiness (Book Baby, 2013). “They achieved wealth and so they think everything they touch will turn to gold. That is far from the case and it is important to stay humble through the process.”
There are plenty others who went before Rice. Miami Dolphins wide receiver Chad Johnson was arrested in 2012 for hitting his reality TV star wife Evelyn Lozada, and New England Patriots tight end Aaron Hernandez is sitting behind bars in Bristol County House of Correction in Massachusetts for a first degree murder he says he did not commit.“Their lack of life experience and emotional maturity are two primary reasons many of these kids lose everything they have and end up broke and alone,” Siebold said.
"The material trappings of a faux lifestyle as seen in magazines and advertisements are not good investments either financially or for long-term happiness," Finley told MainStreet. “They need a consistent habit of saving that provides a large nest egg one day.”
Although self made millionaire actors such as Ben Affleck have been known to participate in celebrity poker events, others have earned and lost fortunes gambling.
David Benyamine is a professional poker player whose current $12 million estimated net worth reportedly comes from holding the World Poker Tour title while NBA player and sports analyst Charles Barkley admitted on ESPN that gambling cost him more than $10 million.
“Only a tiny percentage of millionaires gamble their money on games of chance where the odds are overwhelming stacked in favor of the house,” said Siebold. “Most of self=made millionaires are frugal and abhor the idea of wasting their hard earned fortune.”
Another mistake is the company they keep.
“The new millionaire would be wise to stay unpretentious and continue to seek answers far beyond their small circle of friends who may or may not be helping the situation,” said Finley. “Entourages are not good for one’s financial situation.”
--Written by Juliette Fairley for MainStreet