By Michelle Singletary
Looking at former NFL star Warren Sapp’s bankruptcy filing, it’s hard not to focus on the Florida mansion he owns (18,000 square feet, according to property records) or the number of pricey athletic shoes he’s purchased (240 pairs, many still in the box unworn).
Sapp lists assets of nearly $6.5 million and liabilities of $6.7 million. That makes him broke.
As I combed through Sapp’s 59-page Chapter 7 filing, there was no question that he’s not a good money manager. He’s become yet another example of highly paid athletes and entertainers who go bust after earning more money than most people will ever see in their lifetimes. Sapp, who now earns money as a sports broadcaster for the NFL Network, listed an average salary of nearly $116,000 — a month.
I don’t have to tell you the lesson of this case. You already know it. Yet, I’ll say it anyway. You can go broke making millions if you live above your means.
But there’s another cautionary tale: You can also go broke trying to become rich — or richer — by investing in risky ventures you know little or nothing about. I call it the entrepreneur syndrome. It’s a disease in which Americans believe they aren’t truly successful unless they own a business of some kind.
I used to cover the bankruptcy courts in Maryland, and I saw case after case of people failing financially because of bad business deals. In 1991, I broke the story that former Baltimore Colts quarterback Johnny Unitas had filed for bankruptcy protection. The Hall of Fame player’s bankruptcy was largely due to a bad business investment. Unitas and partners had nearly $4 million in defaulted loans stemming from the purchase of a circuit board manufacturing company. Unitas had personally guaranteed the loans.
Sapp’s financial downfall was real estate. He told The Tampa Bay Times that he wanted to build low-income housing in Florida. What’s interesting about Sapp’s filing is he wouldn’t be broke if not for his business debt. He has considerable retirement money that can’t be touched by creditors.
Reportedly, Sapp grossed at least $60 million playing football. Even allowing for taxes, agent commissions and various expenses, he wouldn’t have had to invest a penny or earn any more money to be financially set for life.
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