Allan Iverson was once regarded as one of the highest and highest paid athletes in the world, earning more than $ 150 million in salary in his 15 years in the NBA alone. In 2012, both CBS and Forbes reported that he was in serious financial trouble and could not pay his debts.

Unfortunately, the stories of the unfortunate professional athlete soon to part with his money are quite common. Sports Illustrated Reports:

  • Within five years of retirement, 60% of all former NBA players are bankrupt.
  • 78% of NFL players have gone broke or are under financial stress due to unemployment or divorce.

Professional athletes are often pitied and seen as financially ignorant and unable to manage their money. But in reality, we without athletic talent also struggle with our finances. The average savings for a 50-year-old in 2013 is $ 43,797 *. It’s not exactly a home run. So how can we be successful with our finances? By following these five tips and staying out of the traps that so many people fall into.

Money is finite: spend less than you earn.

This seems too simplistic, but people struggle with overspending. Start by creating a budget. Come on, a budget won’t kill you. Buy a budgeting system like Quicken, go to free sites like mint.com, or just write down all of your monthly expenses and other bills that you pay on and off. Then look at your income and spend less than you earn.

Save your money.

Be sure to allocate money on a regular basis to create an emergency fund equal to three to six months’ expenses. Then invest the balance in longer-term investments. You can’t create wealth if you don’t save.

Boring investments are okay.

Athletes are known for making bad investments. Private investments have a place, but public investments are certainly much less likely to engage in a fraudulent transaction or lose all of their value. Exxon is likely to be around in 10 years; Your uncle’s new sports bar, maybe not. Start by investing in diversified mutual funds or exchange-traded funds that buy stocks, bonds, and real estate investment trusts. Once your public portfolio grows to a substantial portion of your net worth, you can venture into riskier and less liquid investments such as private equity, energy, or real estate. Always understand your downside risk. Could you lose all your money and be liable for other debts in addition to your initial investment?

Choose your financial advisor carefully.

Good financial advisers can be a blessing and inept or unscrupulous advisers a curse. Where will your advisor keep his assets? A well-known custodian like Fidelity or Schwab is critical. Never write a check directly to your advisor! Does your advisor have credentials? Certified Financial Planner, Certified Private Wealth Advisor, and Chartered Financial Analyst are some of the more prominent designations. They have experience? Have you checked them on the SEC website www.sec.gov or FINRA website www.finra.org to look for criminal charges or disciplinary actions? Have you talked to references who have worked with the advisor for many years?

Choose your spouse more carefully.

The best way to cut your balance in half is to get a divorce. Choose your spouse or partner carefully. Not Married – You may still have to divide assets if you have ever remained as a married couple or lived together for a certain period of time.

Many of us struggle with the same bad financial habits as professional athletes. Its plummet is more dramatic. Following these five basic tips will help you accumulate more money and have less stress in your life, creating a win-win situation in any game.

Stanley Bae, Michael Shockley and Mark McClanahan are CEOs of wealth management firm RGT. www.rgtnet.com

* statistical brain