Lakers legend advises young athletes on how to not go broke

The former Los Angeles Lakers great has five championships and a legendary stint as co-captain of “The Dream Team” (the 1992 U.S. men’s Olympic basketball team) under his belt. Speaking to BBC’s Katty Kay, the now retired businessman gives young Olympians some advice about how to prepare themselves for financial success and stability. 

“If you’re earning money, please get you a business manager,” Johnson said in an interview released in late June. He told Kay through laughter that many young athletes forget about the taxes due on their newfound money, and that “the IRS will be calling.”

Speaking to athletes as young as 16, Johnson first implored them to have fun and live in the moment. But he also encouraged them to plan for the future, or at least look for others who can help them do as much. “You’re going to make money so make sure somebody is there who has the knowledge to help you understand,” he added. 

And Johnson did as much when he began his famed basketball career. “I didn’t know money when I grew up, my parents didn’t know money. So when I got to the NBA I had to find people who knew money. That’s why I’m sitting here,” he said, explaining that his choice to get a business manager was different from most other athletes at the time.

It’s not about hiring the people you like the most either. “They hire these people not because of expertise but because they’re friends. Well,they’ll fail,” Johnson said of players that rely on friends or family for financial advice instead of a manager in a 2009 Sports Illustrated interview.

Playing a sport can take an undue physical and mental toll, and pro-athletes often have a short window before they retire to make a name for themselves and generate enough income to live on for years to come. Finances can be deceptive, as some athletes come into a large sum of money at a young age and find themselves blowing through it while navigating a tricky system. 

Historically, professional athletes have struggled to budget all the way towards retirement. A working paper published in 2015 from the National Bureau of Economic Research, found that 15.7% of NFL players have filed for bankruptcy within 12 years post retirement. About 6% of all NBA players will go…