Billionaire Marc Lasry, who co-owns the Milwaukee Bucks, wants all newly minted NBA millionaires to ruthlessly save their money by telling everyone who hits them up for funds that they simply don’t have any.
The Moroccan-born Lasry, who made his fortune by focusing on distressed assets, is the CEO and co-founder of Avenue Capital Group and has a networth of $1.87 billion. In 2014, the successful hedge funder purchased partial ownership of the Milwaukee Bucks.
Lasry, although focused on the success of the Bucks, wants all NBA players to start thinking with their pockets as if they can’t access the money they are earning.
According to an episode of “Wall Street Week,” it all starts once a rookie player gets signed and their friends and family members become a little more friendly. He said:
“You’ve got to sort of understand, for them, they’re the only person out of their neighborhood or out of that whole family structure that has made money. So what ends up happening is the minute they make money everybody is always asking for money.”
The main thing Lasry wants young athletes to understand is that a new sizable income, while it may seem endless, will disappear faster than they think. He said:
“What we try to explain to our players is look, you know, save your money. Everyone is going to tell you: ‘Here is a great investment.’ Just save it … you should be saving your money.”
Lasry knows far too well the excitement of being presented new investment options, but the truth is that most of the time it is better to save than to invest.
While saying “no” can prove to be one of the most difficult things to do as a professional athlete, it tends to be the most successful financial strategy. Lasry advises athletes to “just tell everyone you have no money. Say: ‘Look I get paid, but money goes automatically to here and I don’t have access to that money.’ “
The problem with athletes who come into new money is that oftentimes they think of their money as indispensable. Lasry said:
“You’re going to spend that money. And that’s what a lot of the mistakes are. People sort of look and they focus on the dollar number and forget they’ve got to pay taxes and they’ve got to pay their agent and they’ve got to do all these things.”
Many people are well aware that humans weren’t meant to live forever, but far too often athletes, celebrities, public icons and those who come into substantial wealth tend to forget that old age applies to them too. Lasry said:
“Imagine if when you went [to college] somebody said to you: ‘Here is $4 million. And by the way, I’m going to pay you $4 million or $3 million for the next four years.’ That is what rookie contracts are today. And you’re 19 years old. I mean, you know, the world is your oyster. You think you’re going to live forever.”
While Lasry did not say all NBA players are irresponsible with their finances, because some have proven otherwise, he still says they should be careful:
“I think as they learn — they do learn it towards the end of their career. By that time, that money has gone away. I know players who’ve made $200 million over the course of their career and they probably have $5 million in the bank.”