Scottie Pippen's Financial Pitfalls: Lessons from a Basketball Icon's Lost Fortune
Scottie Pippen's Financial Pitfalls: Lessons from a B...
By Jocelyn Alano August 20, 2024 00:25
Basketball legend Scottie Pippen is known for how he dominated on the court, but also now for his roller-coaster road to financial disaster after leaving professional basketball. Yes, he made more than $110m in his playing career, but Pippen's money mistakes are now cult stories for jocks and other rich people.
Scottie Pippen's Basketball Journey and Way to Riches
A Stellar NBA Career
Scottie Pippen has had a notable basketball career. The Chicago Bulls selected Pippen as the 5th overall pick in the first round of the 1987 draft, where he quickly established himself as Jordan's right-hand man. Jordan played a key role in transforming the Bulls into the first hyperconnected franchise of modern sports and helped them to six NBA championships during his career. Still, it was as small forward that he earned his stripes for being possibly one of the greatest ever. Seven-time NBA All-Star Pippen was enshrined into the Naismith Memorial Basketball Hall of Fame in 2010.
Earnings and Endorsements
Pippen made a considerable amount of money during his 17-year NBA career. Some sources claim that he earned approximately $110 million in salary, but there are probably no official numbers available. On top of this millions and billions dollar fortune, we must consider the endorsement deals with such huge companies as McDonald's, Coca-Cola, or Frito Lay. One indication of his marketability and on-court skill set is that he invested $18 million per campaign in the final year of his Portland Trail Blazers contract. Pippen became one the wealthiest players in NBA history, owning multiple luxury homes and a private jet that is consistent with what you would expect from other superstar athletes.
The Financial Downfall for Scottie Pippen
As much as Scottie made in his playing career, he still found himself up against the ropes financially upon retirement. Most egregious, over $20 million was invested with Robert Lunn and the financial advisor recommended by teammates. However, Lunn was later embroiled in a fraudulent scheme, and Pippen was out of that amount of money but never got much. During a two-year-long legal battle, Pippen discovered that Lunn was forging his signature and committing bank fraud. Ultimately, Pippen only saw a portion of his stolen money returned to him. Lunn was sentenced to three years and given an order to cough up $400,000 back to the six-time NBA champion: "chump change" compared with what Pippen invested.
Poor Investment Decisions
This man was not the only time Scottie Pippen experienced financial trouble. He also invested in some failed investments, which dwindled his net worth even further. And in 2002, he bought a jet for $4.3 million without taking time to properly check the aircraft. The bird required more than a million pounds of work, which was not cheap. The feckless lawsuit turned into a modest settlement of only $2M, leaving Pippen on the hook for repayments.
The larger issue, though, and the one that screwed Pippen longer term, financially, in addition to investing in this turd, is how he handled his real estate. But in 2007, he rendered his New Jersey home a "distressed property,'' selling it way below cost and abandoning many personal items. There was a yard sale at the house when the new owners took over, and there were no takers, an even clearer sign Pippen's cash flow is dry. Reportedly, Pippen is worth a mere $20 million now, which is quite the departure from his status as an ever-present NBA legend.
Lifestyle Factors
Like many professional athletes, Pippen began to feel the consequences of reckless spending. But the businesses he bought into, including a family restaurant that later went bust and a car wash, were not just risky but also mismanaged. These failed exploits and his lavish lifestyle contributed strongly to his squandering it all.
Lessons and Takeaways
Why Financial Literacy is so Important
The life and money story of Scottie Pippen symbolizes the importance of financial literacy for professional athletes and high-net-worth individuals. The truth is that many athletes, like Pippen, who go into the league have no idea how to handle their own money, either with investing or wealth management. Athletes must find ways to educate themselves about money matters or turn to financial planners who have the athletes' best interests at heart.
Conducting Due Diligence
Older brother Scottie Pippen said Robert Lunn ripped the Hall of Famer off for $20 million, among the most critical lessons he can impart to people exploring handing over their fiscal power. The most that athletes may likely hope and seek could never help fraud-proof them. Frequent monitoring of your financial statements and keeping the lines open with advisors can help spot potential irregularities.
Pippen is an example of what happens to fortunes that do not go so well due to their concentrated investing. Spreading investments throughout different asset classes is a way to reduce risk and act as some form of protection in case another party fails. In the world of safer investments, athletes would be wise to take half a step back and look at options such as mutual funds or even real estate rather than going into high-risk investment ventures that may deliver quick returns but also hold the potential to lose big.
Building a Support Network
One of the biggest keys to an athlete's transition into retirement is their support network. Accountants should be a part of this network, as should mentors who you look up to and who can advise and coach you on how to live the ultra-wealthy lifestyle. That experience can be leveraged by working with professionals who understand the unique challenges faced by athletes when it comes to post-career finance.
Focusing on Long-Term Financial Planning
Athletes must also make a financial plan considering their post-career lifestyle, possible earning sources, and future outgoings. Athletes can safeguard their wealth and secure futures for themselves and their families should they pursue long-term stability over short-term gains.
The financial journey of Scottie Pippen is a cautionary tale for athletes and wealthy persons in general. For all Pippen accomplished on the hardwood, his economic pitfalls show that managing your wealth is easier said than done in a high-pressure environment. Current and future athletes can learn from his experiences by implementing ideas to protect and maintain their money long-term. We can learn so much from Pippen's story: financial awareness, believability, variance, and long-term planning in business terms to set a foundation for these ideas that we all need for the next face of sports.
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