To learn Biblical answers to your financial questions, you can #AskChuck @AskCrown your questions by clicking here. Questions used may be lightly edited for length or clarity.
This week the always vocal Kanye West has been tweeting that he is $53 million in "personal debt," and asking billionaires involved in charities to support him because he is "the greatest artist of all time," meanwhile I've been intrigued by the example of Seattle Seahawks running back Marshawn Lynch who has reportedly not spent any of his $50 million salary, living quietly instead on his endorsement income. Do you see some financial advice for the rest of us in the headlines?
Intrigued by Celebrity Headlines
The mistake that many of us make with money — rich or poor, famous or unknown — is spending more than we make while failing to save for the future. This is true whether we are living on $50,000 a year or $50 million. The number coming in needs to be more than the number going out and debt needs to be settled as quickly as possible.
I grew up with a simple saying: If your Outgo exceeds your Income, Your Upkeep will be your Downfall.
Solomon said it this way in Proverbs 13:7: "One person pretends to be rich, yet has nothing; another pretends to be poor, yet has great wealth."
The contrast between Kayne West and Marshawn Lynch highlights this simple truth.
Marshawn Lynch should be commended for his financial decisions, not only for saving the bulk of his income, but for avoiding the traps that have ensnared so many other great athletes who prospered — short term — in football.
According to Forbes, Lynch made about $5 million from endorsement deals with Nike, Pepsi, Skittles, Progressive, and Activision, choosing to live on that income while saving his salary. As the 12th pick in the 2007 draft, his starting salary was modest for professional football — a $19 million rookie contract with the Buffalo Bills. But he was smart about keeping his spending in check, looking for ways to hold on to his money rather than get caught up in the trappings of wealth, and now has a reported nest egg of about $50 million.
I also find it interesting as well that the famous football player did all of this while keeping a low profile, unlike Kanye West.
Forbes reports: "Lynch is hardly your prototypical corporate spokesperson. He hardly ever speaks to the media and has an adversarial relationship with the Fourth Estate (media) ... But he has carved out a niche with sponsors that churn out some of football's funniest commercials …."
Perhaps he's familiar with Proverbs 27:2, "Let another praise you, and not your own mouth; a stranger, and not your own lips."
His accomplishment — keeping his spending in check — stands in stark contrast to the alarming poverty among his peers, other professional football players whose financial lives rise and tragically fall quickly and often.
A study by the National Bureau of Economic Research (NBER) found that "nearly 16% of the players included in the study — everyone drafted from 1996 to 2003 — filed for bankruptcy within 12 years of retirement."
Bankruptcy is a legal filing; the statistics are much worse for players who are merely struggling but not in court. A study reported by Sports Illustrated in 2009 found that 78 percent of former NFL players were suffering extreme financial difficulty, either bankrupt or under great strain, after only two years of leaving the sport.
My heart breaks for these athletes, who could have used sound financial advice to save in the good years to be ready for the lean years, especially when you consider how short a career can be in sports. But they are not alone. None of us really knows how long we have to work at our full capacity.
All of us should be very careful to budget and save for the future, and especially for those who have an uncertain income flow — whether those in the music industry or professional sports or commissioned sales people — having savings in reserve will help you get through the lean years.
For West, dealing with debt will surely involve some real lifestyle changes, but perhaps we all can learn something from Lynch's example. Being debt free and keeping savings in reserve wasn't just something he believed in his heart — he made it happen.
But what about you? Is building up your savings a real priority? If you're not sure what your top financial goals are, consider taking a free Money Life Indicator survey, which helps you learn more about your financial values, and shows you where you can begin the work of aligning your values with your finances.
Most of us will never have $50 million in the bank like Lynch, but I am sure that you can free yourself from debt and put your family on a strong financial foundation regardless of your income. Like Lynch, we all need to spend less than we earn and be disciplined to save for the future.
To #Ask Chuck @AskCrown your own question, click here.