No Flex Zone: 76ers’ Carter-Williams Puts $4.5M Rookie Salary In Trust Fund
BY: John “Hennry” Harris
It is common for young NBA players to blow through hundreds of thousands of dollars (even millions) adjusting to their newly found wealth. A sobering truth about this “wealth” is that around 60% of NBA players end up filing for bankruptcy in the first five years after retirement. This statistic is surprising considering many of these players earn tens of millions, even hundreds of millions of dollars over their careers.
Philadelphia 76ers star Michael Carter-Williams is determined not to assure that he does not go on the same list as notable players like Allen Iverson or Antoine Walker as players who lost it all, or nearly all of their money.
Carter-Williams, 22, placed his entire $4.5 million rookie salary in a trust fund that he can not touch for the next three years.
Now that’s a nest egg.
His NBA salary is only one income stream and he will live off his Nike and Panini trading card endorsements, which still amounts to a good living, but also prevents him from overextending himself and creates positive economic conditioning for Carter-Williams.
Mandy Carter-Zegarowski, Carter-Williams’ mother and her friend are his managers – which is an unprecedented move as most athletes opt for sports agents or lawyers.
“Our goal is to work with Michael to manage his money in a way that will secure his long-term financial future,” the player’s mother, Mandy Carter-Zegarowski, said in a statement obtained by NBC News. “Right now, the focus is not only to save as much as possible, but also to use his unique position to serve as a role model and give back to the communities that continue to support him and his career.”
The average NBA career is only a surprisingly short 4.8 years! Therefore, while these young men make a considerable amount of money at a young age, when they retire they are still relatively young and must still be able to finance their lives (and their families) for the next 30+ years. Throw in taxes and it is easy to see that the lucrative money is not as big spread out over time.
Stories of players like Antoine Walker, a former Boston Celtics and NBA All-Star, losing his entire career earnings (a whopping $110 million) are becoming the norm. When you take a kid, some as young as 19, and give them millions of dollars, becomes clear there must be a period of adjustment to become accustomed to their change in tax bracket.
Entourages of friends and hanger-ons with their hands out, multiple cars, excessive living and falling victim to bad business investments deplete those NBA paychecks at break-neck speeds.
Antoine Walker wishes to help other young athletes not make the same mistakes as him by writing a book and offering lectures talking about his financial collapse called, “Gone In An Instant.”
“If I can help bring down the number of athletes and entertainers who go broke,” Walker said to TMZ, “then I feel I’m doing something to help the cause.”
He said he caused his own problems by not adhering to advice from financial experts in his rookie season. “Through my young arrogance, being ignorant to a degree and being stubborn and wanting to do my own thing with my money, I went against a lot of his wishes,” Walker told Yahoo Finance.
To be fair, it is not just Black athletes and celebrities that are making boatloads of money just to find themselves broke.
Carter-Williams is giving himself a head start in financial security by simply saving. Saving is a sacrifice, but his sacrifice will divert him from frivolous spending and his money is gaining interest.
That is how one makes money work for them.