In this segment, we’re not necessarily talking about financial things. We’re going to have some fun. This is where I get to be king for a day.
Each week when I’m king for a day, I make one financial rule just for fun. This week, I’m going to do one financial rule and one fun rule. They’re both going to be related to sports since it’s the beginning of the season for my favorite sport: football.
Let’s talk about something that doesn’t annoy me as much as it makes me sad. We can all think of athletes in any major sport who end up dead broke after their career is over. They make millions and millions of dollars during their career, but when they retire, they have nothing. I hear stories like this all the time and it’s sad. Many of these athletes have come from a background of poverty. They weren’t taught the same financial lessons we might have learned from our parents, and as a result, they don’t always have a good financial understanding.
If you’re a pro-athlete and you’re getting north of a million dollars in annual income, my rule would require you to set aside a percentage of that. This percentage would go into an account that builds a pension for your later years. It would be an income you can’t outlive. For example, if you’re a basketball player, and you sign a $30 million contract, you would have to set aside maybe 20% of it. About 5 million of your income would go into a pension plan that would provide you with a lifetime income once you retire. We could make it so that you can deduct it like a 401K payment, so you won’t be hammered in taxes.
As king, I would want to help protect people from themselves. I don’t ever want to read about athletes making millions of dollars during their lifetime and then losing it all because of financial mismanagement. Since I’m on the topic, I should extend this rule to anybody who has a high enough income, regardless of whether it’s related to sports.
If you make over $250,000, 20% of everything you make above that number should go into a private pension plan where you get a tax deduction on that money. It will be paid out as a pension after you retire and can be flexible. It wouldn’t be like Social Security where you pay, and you don’t know if you’re going to get it out again. It’s your money. If you die and you haven’t spent it, it goes to your beneficiaries, so your family doesn’t lose the money. You could start when you’re 30 or when you’re 60. It would be up to you. What’s nice about that law is that it hits on our secret to happiness in retirement. That secret is having a stable and predictable income.
The next rule has to do with football. My daughter goes to High Park and the High Park High School football team last year was horrendous. They would get blitzed like 56-0 every single week. Then they got a new coach and this year, it’s the complete opposite; they’re winning every game like 56-0. There’s a rule in high school football called the mercy rule. I’m not 100% certain how it works, in all honesty. I do know that I can’t remember a time last year or this year where a Hyde Park football game made it to the fourth quarter.
By the time the third quarter is over, the score is so lopsided, and one team is so far ahead of the other, they don’t play the fourth quarter. They don’t want to injure the kids and it’s already clear which team is the winner. In college football sometimes you see these blowout games, and the coaches take the opportunity to play guys that don’t normally get in the game. I understand that, but I’ve seen athletes get seriously injured, break bones, or blow out their knees in a meaningless part of the game. The outcome of the game is already decided but we still have people getting hurt because they play through all four quarters.
We should have a mercy rule for college just like in high school. Once you pass the third quarter, if one team is a certain number of points ahead of the other, the game ends and we declare the obvious winner. I think the specific score I’d pick is 35. If you’re up 35 points in the third quarter, you’ve won.
Sometimes there have been crazy comebacks in the fourth quarter but those are by far the exception, not the rule. The idea is if you’ve played three full quarters, once you get to the fourth quarter, if you’re more than 35 points ahead, it’s done. The only people who might not like this rule are the TV networks because of their advertising. I care more about the fans and the players than the TV networks. The players are not professionals in the NFL. They’re amateur students and there’s no reason to threaten the physical well-being of these young men just because the TV stations want the game to keep going. I’m going to go with this; if a team is 35+ points ahead in the fourth quarter, they are automatically the winner of the game.
We’ve had a little fun here with our king for a day segment. We had two rules:
- If you make a certain amount of money, you should put it in a pension plan.
- We will implement a mercy rule for college football teams.
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