Tuesday, February 24, 2009

Dumb Athlete Alert: MLB Edition

Dumb Athlete Alert: MLB Edition - by the Muskogee Politico
or, Don't Put All Your Eggs In One Basket

Major League athletes make a lot of money, no matter how good they are, or how famous they are. After all, the minimum salary in Major League Baseball is $390,000, $457,588 in the NBA, and $310,000 in the NFL. How's that for a minimum wage?

And that's just the base salary. Oakland Raiders' cornerback Nnambi Asomugha will make $28,500,000 next year - the highest in the NFL (so far). Boston Celtic's forward Kevin Garnett makes the most in the NBA, at a mere $24,751,934. The New York Yankees third-baseman Alex Rodriguez rounds out the major sports with a MLB-leading salary of $28,000,000.

So when an athlete makes money by the boatload like that, why is it that some of them put all their eggs in one basket?

Case in point: MLB players Scott Eyre, Johnny Damon, Xavier Nady, and Mike Pelfrey. These players all had accounts with Stanford Financial. The federal government has frozen Stanford's assets, and the SEC has charged Stanford with running an 8 billion-dollar scam, or Ponzi scheme.

Enter the 'eggs in one basket' problem.

Xavier Nady, salary of $6.5M, can't buy a new apartment because his credit card accounts are frozen due to the Stanford Financial situation.

Johnny Damon, salary $13M this season, doesn't have the cash to pay his bills or mortgage.

Mike Pelfrey, who made $1,987,500 in 2008, says that 99% of his money is tied up with Stanford Financial. He's having to use a small account with Bank of America to pay his bills.

And now, for the best of all - Scott Eyre. He made $3.8M in 2008. He has $13 in his wallet (that's right, thirteen dollars). His checks are bouncing, and if if takes a week or two to get his money from Stanford, he'll have to borrow from his teammates.

Just one more reason why you shouldn't put all your eggs in one basket, especially when you have a lot of them.

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