We can’t get over the sad fact that so many pro athletes tend to lose their hard-earned money. Sports Illustrated details that “78% of former NFL players have gone bankrupt or are under financial stress” by the time they’re retired for two years. And an estimated 60% of former NBA players go broke within five years of retirement.
Why does it happen? Poor advice, bad luck, or lack of financial know–how? Regardless, many talented athletes flush their money down the toilet. Here are seven of the worst investment decisions made by famous pro athletes.
1. John Elway, NFL quarterback
Broncos fans know John Elway for being the quarterback who led Denver to five Super Bowl trips and two Super Bowl victories. Now he serves as the General Manager for his beloved team, helping create arguably one of the best defenses the NFL has ever seen. But things haven’t always been easy for The Duke of Denver.
In 2000, Elway and his business partner invested $15 million into a Ponzi scheme orchestrated by Sean Mueller, owner of a capital management group. He lured clients with claims of never losing money and having risk–free annual returns of 12% to 25% for his “exclusive” investors.
Ten years later, police arrested Mueller as he threatened to commit suicide by jumping off a parking garage. He confessed to paying off some clients with money that others had invested, pleaded guilty to the racketeering charge, fraud and one count of theft, and is serving 40 years in prison. Elway may receive about $1.44 million in restitution.
Also sad: In 1998, Elway had the chance to buy 10% of the Broncos for $15 million, and he could buy another 10% later under special circumstances. Fast forward to a Forbes 2015 estimate of the team’s worth being about $1.94 billion. Elway’s 20% would be worth $388 million, which is a 646% return.