Amar'e Stoudemire spent 15 seasons in the NBA, playing for the Phoenix Suns, New York Knicks, Dallas Maverick and Miami Heat. In 2015, he was the seventh highest-paid player in the league, raking in $26.4 million in that year alone.
Now retired from basketball, Stoudemire has a simple piece of advice for younger players: Save your money.
"Live off your interest, if you can," he tells Wealthsimple in a recent profile.
Stoudemire emphasizes the importance of putting your own future first and not getting caught up in letting friends and family take advantage of handouts. "You have to prioritize," he says. "Meet with your financial advisors quarterly. Finalize a list of family and friends you want to take care of. But when that list is finalized, that's when it stops."
Although it can be tempting for athletes who came from nothing to want to shower loved ones in gifts and hospitality, that habit is simply not sustainable.
"It's not too hard for me to say no," Stoudemire says. "Because you know you have a good heart and you want to take care of other people, but there are times and places for things."
Stoudemire understands the pressure of wanting to use his money to help those close to him. Growing up, his family was stable, but they didn't have much. As early as third grade, Stoudemire spent his winters shoveling snow for his neighbors and his summers rising with the sun to help out at his father's lawn service company.
A star athlete throughout high school, Stoudemire chose to opt out of college and enter the NBA right away so that he could start to earn money and be able to help take care of his family financially.
"Going to college would have been fun, a great experience, but there are no guarantees in college," he tells Wealthsimple. "You can get hurt in college and then your NBA career is over. You don't have any money."
Stoudemire's advice to save as much as you can is smart, especially for young athletes who are at risk of not handling their money well. Unfortunately, losing everything is a frightening reality within the world of professional sports.
A viral Sports Illustrated feature from 2009 cites a humbling statistic: "Within five years of retirement, an estimated 60 percent of former NBA players are broke."
Football players fare even worse: "By the time they have been retired for two years, 78 percent of former NFL players have gone bankrupt or are under financial stress because of joblessness or divorce."
Former Oakland Raiders cornerback Nnamdi Asomugha understands how hard it can be to manage money wisely.
"For athletes, it's extremely tough to trust people with your finances. It's so easy to be victimized," he tells Wealthsimple. "When I hear about a player losing his money, I'll rarely, if ever, point a finger at the player because I know how difficult it is. It's not always, 'Look at this idiot who got paid all these millions of dollars and lost it all.' It may be more like, 'This naive kid with a million things going on in his life put his faith in the wrong people.' I know because I was that person."
It was during his second year in the league that Asomugha realized he needed to be prepared for life after football. "It was a clear message that, as a player, you're not really in control of your destiny and the way you make a living," he says.
For Stoudemire, being prepared meant hiring a financial advisor and choosing to live off the interest his paychecks generate. Although it's not feasible for everyone, he says it keeps him on the right track.
"It keeps you out of your pockets — you spend the money from the interest before you're spending your actual money." That separation makes all the difference.
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