The Edmond Sun

Opinion

October 4, 2012

Smartest risk-takers know when to walk away

WIRE — I know a wealthy, self-made man who made most of his money before age 45. I looked at his financial information and told him, “You are not going to stop working until you drop dead. If you wanted to retire, you could have done that a long time ago. You like what you do and will never stop.”

My statement shook his inner psyche, and then he realized I was right. He never truly plans to quit.

He realized I operate in the same fashion. Sitting in a rocking chair and playing shuffle board are not in my plans.

Someone once asked when I would retire. I responded, “Death. My work brings me great joy. I can’t imagine giving it up.”

The great Kentuckian Al Smith wrote his first book at age 84. At age 85, he just finished his second book, “Kentucky Cured,” to be released in November.

Al always has something to do and some place to go. He is an interesting role model in that he had a full-time job for 20 years. Years ago, he sold his chain of newspapers and devoted the rest of his life to helping others.

I’m not privy to Al’s financial information, but I suspect he and his wife set up their finances with a long-term view. Which is what some former professional athletes should have done.

Sports Illustrated did a fascinating study in 2009 titled “How (and Why) Athletes Go Broke.” The statistics were stunning. By the time they have been retired for two years, 78 percent of former NFL football players were bankrupt or under financial stress because of joblessness or divorce. Within five years, 60 percent of former NBA basketball players were broke.

These people made millions. What happened?

Many blow money on large entourages and wild spending — the same way many lottery winners do. A lot more get burned by getting involved in businesses far away from their area of expertise.

According to USA Today, my childhood hero Oscar Robertson has a plethora of tax and financial problems related to a chemical company he owns. Robertson is not only a basketball legend, he has been a devoted community advocate who has lived his life in an exemplary fashion.

But, at age 73, it’s going to be tough for the Big O to make big money again.

People often ask me, “Why don’t some of these professional athletes put their money in the bank or a lifetime annuity? They don’t need to do anything risky or stupid.”

A good question.

I suspect the same confidence and courage that allow someone to become a professional athlete work against them in business. They never know when to go to the sidelines.

It’s not that hard to be financially secure. Spend less than you make, save the rest, and don’t do anything stupid. Assume you are going to live to an extremely old age, and make sure you have money that lasts as long as you do.

It’s not hard, but it is tedious. And it’s not the least bit glamorous.

I knew of a woman who was always trying to meet a guy driving a new Mercedes. She should have been looking for someone who drives a 10-year-old Toyota. The Toyota driver is more likely to have real wealth in the long run.

The focus on long-term savings is the primary difference between my friend who has real wealth and big stars who have spent real wealth.

My friend accumulated his wealth quietly and protects his money carefully. He is intensely frugal, with no inner need to show off his wealth. His money is a byproduct of his focus on putting out a quality product.

He also knows his business, inside and out. He knows as much about his industry as Oscar Robertson knows about basketball. He goes to work every day because he enjoys operating at his peak potential — just like Oscar Robertson did when he played basketball.

Oscar got out of basketball near the top of his game. After the Cincinnati Royals made the silly mistake of trading him in 1970, he led the Milwaukee Bucks to an NBA championship before he stepped down in 1974.

I hope he works out his financial problems and leaves the business world on top as well. He is a classy guy who needs to ask himself an important question:

At what point do you stop taking financial risks?

DON MCNAY is a columnist for the Richmond (Ky.) Register. Contact him at don@mcnay.com.

1
Text Only
Opinion
  • Medicaid reform a necessity

    Historically, education spending by the state of Oklahoma has been the largest budget item. This is no longer the case. In recent years, the state of Oklahoma spends more on Medicaid (operated by the Oklahoma Health Care Authority) than common education and higher education combined, according to the state’s Comprehensive Annual Financial Report.

    July 25, 2014

  • Remembering lessons from 1974

    This week marks the 40th anniversary of an important milestone in America’s constitutional history. On July 24, 1974, the Supreme Court voted 8-0 to order the Nixon White House to turn over audiotapes that would prove the president and his close aides were guilty of criminal violations. This ruling established with crystal clarity that the executive branch could not hide behind the shield of executive privilege to protect itself from the consequences of illegal behavior. It was a triumph for the continued vitality of our constitutional form of government.

    July 25, 2014

  • RedBlueAmerica: Is parenting being criminalized in America?

    Debra Harrell was arrested recently after the McDonald’s employee let her daughter spend the day playing in a nearby park while she worked her shift. The South Carolina woman says her daughter had a cell phone in case of danger, and critics say that children once were given the independence to spend a few unsupervised hours in a park.
    Is it a crime to parent “free-range” kids? Does Harrell deserve her problems? Joel Mathis and Ben Boychuk, the RedBlueAmerica columnists, debate the issue.

    July 24, 2014

  • Technology that will stimulate journalism’s future is now here

    To say technology has changed the newspaper media industry is understating the obvious. While much discussion focuses on how we read the news, technology is changing the way we report the news. The image of a reporter showing up to a scene with a pen and a pad is iconic but lost to the vestiges of time.
    I am asked frequently about the future of newspapers and, in particular, what does a successful future look like. For journalists, to be successful is to command multiple technologies and share news with readers in new and exciting ways.

    July 23, 2014

  • New Orleans features its own “Running of the Bulls”

    On July12, the streets of the Warehouse District of New Orleans were filled with thousands of young men who were seeking to avoid being hit with plastic bats wielded by women on roller skates as part of the annual “Running of the Bulls” that takes place in New Orleans.
    The event is based on the “Running of the Bulls” that occurs in Pamplona, Spain, that is  part of an annual occurrence in which a group of bulls rampage through the streets of Pamplona while men run from them to avoid being gored by their sharp horns. That event was introduced to the English-speaking world by Ernest Hemingway, who included scenes from it in his critically acclaimed 1926 novel “The Sun also Rises.”

    July 22, 2014

  • OTHER VIEW: Newsday: Lapses on deadly diseases demand explanation

    When we heard that the federal Centers for Disease Control and Prevention had created a potentially lethal safety risk by improperly sending deadly pathogens — like anthrax — to other laboratories around the country, our first reaction was disbelief.

    July 22, 2014

  • Holding government accountable for open meeting violations

    A few weeks ago I wrote about the recent success of three important government transparency proposals which will go into law this year.

    July 21, 2014

  • GUEST OPINION — Oklahoma GOP voters want educational choices

    A Braun Research survey released in January showed that Oklahoma voters — Republicans, Democrats, and Independents alike — favor parental choice in education.

    July 21, 2014

  • HEY HINK: IRS interferes with citizens’ rights of free speech

    The patient is gravely ill. We have detected traces of a deadly venom in the bloodstream. We don’t know how widespread the poison is, but we know, if not counteracted, toxins of this kind can rot the patient’s vital organs and could ultimately prove fatal.

    July 19, 2014

  • 130408_NT_BEA_good kids We're raising a generation of timid kids

    A week ago, a woman was charged with leaving her child in the car while she went into a store. Her 11-year-old child. This week, a woman was arrested for allowing her 9-year-old daughter to go to the park alone. Which raises just one question: America, what the heck is wrong with you?

    July 17, 2014 1 Photo

Poll

If the Republican runoff for the 5th District congressional seat were today, which candidate would you vote for?

Patrice Douglas
Steve Russell
Undecided
     View Results