Antoine Walker had the world by the tail in 1996. He was coming off a NCAA championship season with the Kentucky Wildcats and was chosen by the Boston Celtics as the sixth pick overall in the 1996 draft. Fourteen years later, he declared bankruptcy with assets of $4.28 million and $12.74 million in liabilities. Walker had managed to blow through nearly $110 million.
Walker’s story is not unique. It’s been estimated that around 60% of NBA players end up broke within five years after retirement. Most go broke for the same reason — massive overspending.
Many NBA players feel obligated to take care of family and friends after they strike it rich, but they do so in extravagant and unsustainable ways, as Walker did. Determined to do right by his mother and five siblings, he built multi-million dollar houses for his entire family.
Walker certainly was not shy in spending on himself, either. He bought multiple expensive cars, including a $350,000 Maybach. Throw in expensive trips and gifts for family and friends, as well as some significant gambling losses with his NBA peers (allegedly losing over $600,000 in a two-year time span), and it’s easy to see how Walker established the path for his eventual bankruptcy.
Walker did have a financial advisor work with him to establish a long-term financial plan, but he simply ignored it. As Walker said to Yahoo Finance, “Through my young arrogance … and wanting to do my own thing with my money, I went against a lot of his wishes.”
The one area where Walker chose to invest his money was in real estate. He invested in over 140 properties throughout Chicago’s South Side. The investments ranged from land for future buildings to various commercial properties. Walker surely thought his property wealth would set him and his family up for life after retirement.
Unfortunately, Walker’s timing couldn’t have been much worse. The housing crisis left him horribly overextended and with multiple underwater properties. He ignored the fundamental investing tenet of diversification. Even in that terrible position, he might have been able to avoid bankruptcy if he had simply had time to pay attention to his investment properties, or hire someone to do it for him.
Walker ran into legal problems on his investments, defaulting on loans that he had personally guaranteed. In many cases, he simply missed court dates as he focused on his NBA career, not fully aware of the financial damage he was doing to himself.
Walker has come to accept what happened and has begun to rebuild his life. He downsized his life to match his new circumstances, and now owns a single home in downtown Chicago with five members of his family. He no longer owns any cars, much less expensive ones. Walker was even forced to sell his single NBA Championship ring earned with the Miami Heat in 2006.
His debt was finally discharged in 2012. He now supplements his income as a basketball analyst for the digital sports network 120 Sports with autograph signings and speaking engagements. To help others learn from his mistakes, Walker is planning to release the documentary Gone In An Instant in the winter of 2015.
In what may be the ultimate irony, Walker left school after his sophomore year for NBA riches and never did complete his degree. His major was business management. The moral of the story: if you aren’t going to finish your business management degree, at least listen to the advice of those who do. These days, Walker would agree with that advice.
Photo by Keith Allison (originally posted to Flickr as 022807 209) [CC BY-SA 2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons