80% of retired NFL players go broke in their first three years out of the league. @gardnerminshew5 won’t be one of them.

How is it possible so many NFL players are going broke with that kind of money?! Let’s break it down. The median NFL salary is about $860,000. Which is a TON of money (over 10X the US median salary of around $70,000). But, the median NFL career length is only 3.3 years.

So if you’re the typical NFL player, you’ll make about $2.5 million over 3 years then you’ll be unemployed. $2.5M is enough to last the rest of your life IF you abide by the “safe withdrawal rate”. That’s commonly considered to be 4% of the starting amount, or $100,000/year.

So in order for the median NFL player NOT to go broke, when they hit it big and are playing on a national stage making almost a million bucks a year, they have to be extremely disciplined and live more middle class on about $100,000/year. Is that what they do? Unfortunately many don’t have great financial literacy education, so they do what most of us do. See money, spend money! $860K that first year? Buy a $100K car, and a $2M home with a big mortgage. You can afford the payments! Next year buy your family cars, go on first class trips, live it up!

But then when they’re unceremoniously cut before their 4th year and their income drops to zero. They have massive payments to keep up with. You can see why 3 years later they can’t cut it any more and 80% go broke.

Even though Gardner is way above average with his $5M deal, that still only leaves a $200K safe withdrawal rate. He can obviously afford a nicer car, but respect to him for not needing one to validate his self worth. He’d probably rather be financially set forever than trying to impress people with his car.

As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.

-Jeremy

Source: Article on espn.com, Photo from Icon Sportswire