Back in October 2012 ESPN released its first episode of 30 for 30′s second season with a documentary titled “Broke”, detailing how so many athletes end up broke and bankrupt shortly after retiring from their given sport.

[VIDEO] – ESPN “Broke” Documentary

The Reason Most People Are Broke, No Financial Education

This echoes what many reports have stated regarding lottery winners ending up in bankruptcy within three years of submitting their winning ticket.

Why is this? It can’t just be a coincidence, can it?

The answer in short is no, its not a coincidence. The biggest misunderstanding about money is that in actuality, building wealth is not an event, but rather a process.

Building Wealth Is Not An Event, But Rather A Process

What does this mean?

Well, here’s an example. If you give a large pile of money to someone are they wealthy? Many athletes and lottery winners have shown that the money doesn’t last if you don’t know what to do with it.

However, if you take all the money away from a self made millionaire/billionaire it would just be a matter of time before they start to build wealth again. This is the process of building wealth, and it has little to do with money. It has everything to do with knowing about money.

Could Financial Education Help Prevent Student Loan Debt?

One small snippet I caught during this film was a financial advisor mentioning how student athletes graduate college without any financial education. This is so true about our society and one of the main reasons I try to take this message to the masses.

We have so many mandatory classes and credits we need to attain in order to earn degrees, yet if you want to learn about building wealth you have to seek out and search for credible sources and materials on your own.

We are all taught from the beginning to go to college so we can get a good job so we can make a lot of money but wealthy people don’t think that way.”

In addition, when one person is given a large pile of money all of a sudden, and all they know about money is how to spend it, then spend it they will. When the money starts to run out, they look for the next big “score” because this is what they have learned about money. There has to be another big pile down the road…. right?

This is when they get taken advantage of and invest in silly things that are “guaranteed to double your money”, and then their money runs out even faster.

You work really hard at something and then one day you have your pile of money and bam you are rich and ready to retire. But what happens to that pile if it isn’t being replenished?

Imagine a bucket filled to the top with water. But poke a small hole in the bottom for expenses. As you add expenses like cars, credit cards, jewelry, iPads, clothes etc., the bucket begins to drain faster and faster.

Your job is to add more faucets to this bucket. Even if one faucet is just a little bit of water it helps. Even if that faucet only replenishes the bucket enough to cover one expense, it helps.

The problem is that as the bucket drains, these once “millionaires” start looking for a new bucket to start draining and miss out on all the opportunities the first bucket provided.

People are impacted by their experiences. When athletes know nothing about money, but are given a large amount of money all at once they are going to expect that to happen again… the problem is that rarely does it happen once to anyone, let alone twice.

Bart Scott, an NFL linebacker mentions that when he received his first check in the NFL, he took it to a check cashing place because he didn’t know anything about banks and checking accounts.

Financial Education Would Help Athletes With Building Wealth And Managing Their Money Better

Many of the athletes also assumed that when they signed for a million dollars, they were going to get a million dollars. They didn’t know about taxes.

What is really astonishing is the fact that not only do many of these fortunate athletes and lottery winners end up broke, they often end up worse off than they were before the money. Huge debts and broken relationships are the norm in many of these situations.

So whats the answer? If you have not figured it out by now the answer is…

Financial Education

If you take financial education, and you add time, the result will be wealth. Want more wealth? Then spend more time on your financial education. Its that simple. It may not be “quick”, but it is self sustaining.

Remember Financial Education Is Key To Building Wealth

I hope this article made you think about the importance of financial education and why you need to take steps to learn how to manage your money.

To Your Success

Please comment below and tell me what you think?

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