[Hakeem]

Originally Posted by Pioneer10

Really: Juwan was caught shoplifting?

Not really. It was a false accusation.

[IceMan23and3]

Dude. I can live off of $10 million for the rest of my life! If I invested that 10 million in a CD at 5.5% or a municipal bond at 8.3% apr, that would be more than 250k a year including all taxes for the rest of my life! Granted I wouldn't be living like a super star, but I could afford to live in a multimillion dollar home and have a nice benz to drive!

[EHL]

Originally Posted by Pioneer10

401k are maxed out 15k, set up Keough or something else that and that's maxed out around 30k a year. Those shelters aren't going to do squat when you take in millions in salary .

How is that not going to "do squat"? You can live an upper middle class lifestyle stashing that much money away tax-free annually. I'm not really sure what you're arguing other than that the players wouldn't be able to spend their hundreds of thousands/millions completely tax free. Again, you can take taxes into account and they're still millionaires by their 30's (excluding particularly severe recessions) based on just a year or two worth of mean league minimum salary. If they're going bankrupt it's because they're just plain immature/uneducated/stupid. That may be mean to say, but it's true.

Unfortunately these guys aren't like hedge fund managers, executives who get paid with different compensations such as certain stock options and proceeds off gains: that type of income is taken out at capital gains rates which are much lower then straight federal income tax.

True, it's about a 20% differential, 15% versus about 34-39%.

Unfortuantely or fortunately based on your perspective, these NBA players make there money on payroll.

"Tax shelters" for NBA players would be ways to keep capital gains low on money invested. But that money which is placed in investments is coming from net after taxes

Net after taxes is still $400K annually. So they'd simply need to stay healthy and maintain the same skillset just another year out of their lives, and the numbers I posted would still be accurate.

What does an ensured CD pay these days, 5%-5.5% compounded annually? Invest 200K of your $400K (net after taxes from one season of work), and that 200K compounded at 5% annually over 30 years becomes $864,388 (5% for a CD is absolute worst case interest rate). I'd rather invest in equity myself though, so I'd take that 200K and put them in stocks; reinvest the dividends and diversify (very easy to do with money market mutual funds) and that 200K becomes $1,522,451 just 30 years from now (U.S. equity has returned 7% annually over ANY 30 year period since 1806, including the Great Depression). That, of course, leaves said NBA player with $200K, part of which he can use to put a down payment on a house and wait for it to appreciate 10, 20 or 30 years from now depending on where you live, at which point they can refinance and have even more cash on hand for retirement.

Bottom line; the average NBA scrub can live an upper middle class lifestyle with just basic knowledge of investment opportunities, assuming they start in their early 20's. If they invest better than the average American they're guaranteed, on average to be multi-millionaires by their 30's or 40's. As you said, no one should shed a tear if they're going bankrupt.