Like many former NCAA college basketball players, Joe McLean had dreams of playing in the NBA.
The 6′6″ forward played four years for celebrated coach Lute Olsen on the University of Arizona Wildcats. He made it to the Final Four in 1994 and averaged nearly 10 points per game in his last season. McLean played professional basketball in Europe for three years, followed by a training camp with the Sacramento Kings before he gave up on his NBA dream.
“I was good, but others were really good,” he said
McLean eventually found his calling as a financial coach and advisor to professional athletes, who have a notoriously tough time managing their good fortune. According to an oft-cited Sports Illustrated survey in 2009, 60% of NBA players were going bankrupt within five years of leaving the game at that time.
McLean, who is now managing partner for San Ramon, California-based Intersect Capital — ranked 94th on the CNBC Top 100 Financial Advisors list in 2021 — thinks those numbers are exaggerated.
But he also believes that the survey results brought a much-needed awareness to the very real challenges that pro athletes face coping with sudden wealth.
CNBC spoke with McLean about those many challenges.
CNBC: Why do so many professional athletes who earn so much money end up in financial difficulties?
Joe McLean: With anyone who comes into sudden wealth, there is a risk of crash and burn. Age plays into it. The younger you are, the greater the likelihood that you’re a knucklehead. We’re working with young people who typically don’t look past next Friday and we’re talking about a 20-year-old making money that if proper planning is in place will last for generations.
The biggest problem is that the traits that make someone a great athlete or a successful entrepreneur are not the same traits you need to be a successful investor. The drive to win and the willingness to take risks and bet on yourself doesn’t transfer well to managing money.