There’s an old saying and it reins true: “A fool and his money are soon parted.” Lottery winners, entertainers, professional athletes have all proven this. Most professional athletes go broke in just a few years after retirement. It doesn’t matter that you’ve made millions of dollars; if you are buying liabilities, spending it frivolously, and being careless (or downright stupid) with your money. This is exactly what I thought of when I recently heard that pro boxer, Floyd “Money” Mayweather had placed a $10.4 million bet on the Denver Broncos to win the Super Bowl.
Mayweather, who has an estimated net worth of around $170 million, is known for placing rather large bets on sporting events, but $10.4 million is ridiculous! Reportedly he made $85 million in 2012 and, based on those numbers, that would mean he was gambling more than twelve percent of his income on one game.
I’m not against gambling or spending money on luxury items. There should be a place for that in your budget. But there is no way anyone should gamble more than ten percent of their income on one roll of the dice!
You don’t have to be a complete idiot to be a financial fool. Being a fool isn’t just about gambling and spending money on frivolous stuff. Many people who would ridicule Floyd Mayweather for his gambling are doing the same thing when they think they are investing. The average investor can’t tell you anything about their holdings or why a stock or the market should go up or down. They are gambling and hoping that it works out. And as I always say, “Hope is not an investment strategy!”
Have you ever wondered how Mike Tyson made $400 million and ended up bankrupt? Yes, he spent a lot on extravagant things and blew a lot of it, but he tried to do some things right too. Tyson’s problem was he trusted the wrong people to handle his money and he didn’t have much financial intelligence. This happens all the time to entertainers and athletes, because they think they can just let someone else handle that. Whether you are Floyd Mayweather or the average joe, you need to know what your money is doing and be on top of it.
Everyone should have a budget, no matter how much money they make. Having a budget means you tell your money where to go, and if you don’t you will have to ask where it went. A portion of your income can be used for fun (that includes gambling) and spending on whatever you want, even if it looks ridiculous. Another portion should be set aside for saving and investing. And during the “good times” you should save twice as much, to prepare for the bumps in the road. Those who are careless with their money and just spend what they make, don’t budget, and don’t plan for the future are destined for disaster.
Before you jump to the collusion that Floyd Mayweather is a total idiot, he didn’t actually place that $10.4 million bet. I’m not sure where the rumor started, but it spread like wildfire. Mayweather responded through social media stating, “Somebody lied to you all. If I was going to bet, I would have bet on the Seattle Seahawks. I’m the best defensive fighter, it’s only right to go with the best defensive team.” He also posted a picture with a caption congratulating the Seahawks on their victory, ending it with, “The only thing I would bet $10 million on is MYSELF. From the looks of things, I’m a guaranteed WIN!!!”
I actually really like the last part of that: “The only thing I would bet $10 million on is MYSELF.” If you’re going to bet that much on anything it needs to be on something you know a lot about and something you have some control over. Floyd Mayweather is one of the best fighters (if not the best pound for pound fighter) in the world, and he puts in the work to stay there. I’d bet on him too, but only a small amount budgeted for fun and play because I can’t control it and it would be a gamble for me…even as good as he is. I don’t know Mr. Mayweather personally and don’t know enough about his personal finances to say whether he is a financial fool or not, but I was glad to hear that this rumor was not true.
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