My sports of choice are surfing, skating and snowboarding. If I had the opportunity to be a professional surfer, getting paid to travel and play in the ocean every day, I would drop everything and switch careers right now. Life is better in boardshorts than a suit and tie, and who doesn’t want to spend their days on warm beaches, surrounded by girls in bikinis, while drinking beer between surf sessions! Lately, I have been re-evaluating this daydream of mine. I am starting to realize I may be more blessed in my current course of life than if I lived out my fantasy.
The reality of the professional surfer is not all that it’s cracked up to be. Advertising agencies depict the surf industry as one of the ultimate lifestyles, but there is a dirty parasite running amuck in the industry that no one ever talks about, an over-abundance of excessive spending and a large supply of shysters looking to exploit the ineptitude of those with money.
Bad financial practices start at the top.
Lately, the surf industry is filled with many financially irresponsible companies who attempt to outdo each other’s marketing budgets and sponsorship salaries year after year. It was no surprise that Quiksilver and Billabong, two of the biggest brands in the industry, filed for bankruptcy in recent years. A few weeks ago the Titans of Mavericks group that runs the annual Mavericks big wave competition also filed for bankruptcy.
It should not be a surprise to learn that these poor financial habits are passed on to many of the employees and sponsored athletes of these companies. Despite high salaries that can easily reach into the six-figure range, many professional surfers are living paycheck to paycheck or are one financial blunder away from bankruptcy.
Professional surfers are often picked up by sponsors at a young age, sometimes as young as 12 years old. Kolohe Andino, for example, was easily making over a $100k a year at the age of 14, but he is on the higher end of the spectrum. Most of the athletes make somewhere in the range of $40k to $80k a year, but their sponsors give them free clothes, free food, and free travel which accounts for the majority of living expenses, so a $40k salary is probably more equivalent to a $75k salary for a normal employee and an $80k salary is more equivalent to a $110k salary. Receiving all of these perks at such a young age can make it difficult for some athletes to adapt to a life after their surfing career because they don’t know anything different.
On the upper end of the talent pool surfers at the top of the ranks, are pulling down premium dollar bills from multiple sponsors and competition earnings. The top 44 surfers who compete on the world tour are guaranteed $8,000 per competition for each of the 12 events, so at the minimum, they are pulling around $96,000 a year just for showing up to compete at all events. The prize money for 1st place at each event is $100,000. Last year the world champion John John Florence pulled down $406,000 in prize money plus several million dollars from his sponsors. You might as well blast these guys with a firehose of money. You can’t expect someone to understand how to respect money in their bank account when their job consists of weekly phone calls like:
“Hey, dude there’s a swell hitting Fiji in two days, get on the computer book a ticket and get here asap! No need to find the cheapest ticket, just find a flight, book a ticket and swipe swipe swipe that expense on the corporate travel card we gave you! Don’t worry about keeping track of what you spend, we’ll hire someone to do that for you in the background.”
Such reckless spending is not limited to professional surfers, you can look around at highly compensated professional athletes from a myriad of sports industries are you will observe the same thing. Sports Illustrated reported that 78% of professional football players go bankrupt or are under financial stress within two years of retiring, and 60% of professional basketball players are in money trouble within five years of retiring.
Beware of vultures.
I do not believe that spending habits alone are to blame for most professional athletes losing their fortunes. Once you begin to make more money that the average person, your friends, family and a ton of financial professionals begin circling around you.
When I was a kid growing up in the Caribbean, we would go to the beach. Every now and then we would see vultures lurking in the trees nearby looking for small wounded prey. My mom would always try to scare me and tell me to stay close by because the vultures like to swoop down, take little kids that wander too far away from their parents and eat them. (Thanks for scaring the hell out of your 3-year-old, mom!)
In the same way, once you begin to wander too far away from the average income range you become more susceptible to being approached by financial vultures in the form of “financial experts” looking to help you manage your money.
Last week a bookkeeper named Felicidad Rivera pleaded guilty to 13 counts of wire fraud. Rivera was the bookkeeper for a professional surfer named Clay Marzo. His mother, Jill also employed Rivera to look after the finances of her vacation rental business. Rivera stole about $334,500 from Clay and his mom over the course of seven years. She wrote 193 checks to herself from Clays checking account and she siphoned off an additional $75,488 through electronic bank transfers.
It is well known that Clay suffers from Asperger’s syndrome, and his mother has dyslexia. They both speak out regularly to raise awareness about these disabilities. Unfortunately, by raising awareness for a good cause, they made themselves into larger targets for financial vultures.
I imagine they received several pitches from “financial experts” that went something like this:
“Hey, you’re making tons of money and have a disability? It’s amazing you have survived your entire life living on your own managing your own finances. Listen up, money is a very complicated game, and it’s boring as hell with all sorts of taxes and laws. Most people don’t want to bother themselves with all of this difficult money stuff, and you are at a disadvantage with your medical disabilities! I am more than happy to manage your money for you!”
Rivera was one of these predatory vultures, she earned their trust and took advantage of Clay and his mom, and I wouldn’t be surprised if there were others out there who were able to pull off similar cons on the Marzo family.
My heart goes out to Clay and his family because my grandparents were taken in a Ponzi scheme back in the mid 90’s, and I had to watch my grandfather come out of a 20-year retirement to work at Wal-Mart as a people greeter at the age of 75. He was the best damn people greeter ever, and all of the customers love him! Thank you, Wal-Mart, you will always hold a special place in my heart!
Although Clay and his mom both have disabilities, they survived on their own without the help of money managers for most of their life. In addition, Clay’s disability, Asperger’s Syndrom, is a high-functioning form of autism that affects a person’s social skills that do not limit him from living a full and prosperous life. It is also well known that people with Asperger’s often pay close attention to details because their brain will focus in on topics they are interested in and they will learn everything about the topic. This is part of the reason why Clay is a successful surfer, as he is able to identify small details while wave riding that most people would not pick up on. I have no doubt in my mind that if Clay was educated on how to manage his finances he would be able to tell you where every last penny was spent by memory.
Probably the most dangerous social quirk of Asperger’s syndrome is the inability to identify the context of a situation and discern non-literal phrases. Sarcasm often flies over the head of someone with Asperger’s, so they take everything they are told quite literally. If you called someone with Asperger’s on the phone and told them “It’s raining cats and dogs over here!” they would literally believe that cats and dogs are falling from the sky where you are at.
By telling someone with Asperger’s that their disability limits them from being able to manage their own money and that a professional should manage their money for them, the individual will believe it to be true and are more likely to hand over access to all of their money without questioning the person.
Every news article you read about this story uses the exact same quote about when Clay’s mom told him that Rivera had stolen his money and he was now bankrupt, he said, “Well, she must have really needed it.” Everyone who uses this quote and frames it in a context that makes the reader say awwww, what a good attitude, Clay is such a great guy who is not attached to material things. Good on ya, Clay, you’ll bounce back!
I see it differently. I see someone with Asperger’s that does not know how to fully comprehend the scope of what has happened to him. In his mind, his mom just told him another fact of about some numbers associated with a bank account that he is unfamiliar with.
Too many folks have planted poisonous seeds into the head of the Marzo family by praying on their disabilities and telling them they are not good enough to manage life on their own terms. This is bull shit. Don’t let others tell you what you can and can’t do. There are amazing people out there with all sorts of disabilities that find ways to adapt and take full control of their lives.
I do not think Clay Marzo’s story is as unique as everyone makes it out to be. There are many athletes, celebrities, and other talented people out there who are coerced and tricked out of their wealth.
Wisdom is the ability to learn from other’s mistakes, so let’s take some time to reflect on what we can learn from the mishaps of professional athletes and Clay’s story.
Learn the value of money and how to protect your money.
Spend less than you earn, save and invest the rest.
Be aware of the bad habits of those around you and do not become influenced to spend your money with reckless abandon because everyone else is doing it. Other people do not care about your money.
Identify what makes you most happy and choose to spend your money on those things that will provide you maximum happiness. Reduce spending on things that will only bring about small short bursts of happiness. i.e. happy hours, acupuncture, $1.99 toys at the grocery store, whatever it is that you feel is of little value.
Don’t be lazy with your education. It is very easy to learn the basics of wealth management within a week or two, and you can become a money expert by reading a handful of personal finance blogs and five to ten books on the subject. You’re most likely going to live to be at least 80 years old why not waste 2 months or 0.2% of your time to learn how to manage your money for the rest of your life.
Find someone you know who is further along their financial success journey than your and ask them for advice. Ask them what tips and tricks have worked for them, and ask them what hasn’t worked for them. Often the biggest lessons come from learning from the failures of others. It is preferred that this person be debt free or is utilizing debt to build wealth through real estate or other investments.
Use free accounts like Mint and Personal Capital to monitor your spending on a weekly basis. Don’t be lazy it takes less than a minute to review all of your spending activity via the phone app, and the habit will also protect you against identity theft.
Once you start making money, defend it from others.
Financial gurus, money managers, personal advisors, gold diggers, friends, and family members will come out of the woodwork seeking opportunities to take your money. Some actually mean well and others do not. Maintain awareness and always ask yourself why does this person want to help me?
Defend your money from yourself.
Identify bad spending habits within yourself and develop strategies to protect your money from yourself. For example, I am an impulsive buyer. When something pops in my mind and I immediately whip out my phone and order it online. I am working on changing this habit by placing the item in mind in my shopping cart but waiting several days before I complete the checkout process. By delaying the order, I have time to get past my excitement, question whether I really need the item and if I don’t I remove it from the shopping cart and move on with my life.
If you are interested in learning more about Asperger’s syndrome, please check out this article on Autismspeaks.org, you can also buy Clay Marzo’s book Just Add Water: A Surfing Savant’s Journey with Asperger’s.