What the 1% majored in

[Quackers]

Yes you want an academic source for whether rich people with inherited wealth/lottory winners ever overspend and end up back in the workhouse.
I'm just demonstrating it's possible to happen, and annoying you a bit

 

[Traitorfish]

Nobody debates that it's possible, I'm just wondering if it occurs to a sociologically significant degree. It might be; I have no basis on which to argue it doesn't. I'm just interested to know if BasketCase has any basis either. So a source- and I was thinking an article, rather than an academic paper- would be nice.

 

[Archbob]

"Source", not "anecdote".

There's enough moronic sports stars that do this that they can't really be counted anymore as just "anecdote".

 

[Traitorfish]

You ever heard that saying about the plural of "anecdote" not being "data"?

 

[Archbob]

You ever heard that saying about the plural of "anecdote" not being "data"?

Your forgetting each anecdote is a data point and all those guys put together make quite a lot of data. Multi-millionaires who don't have education in the United States are fairly rare, so you get a few hundred cases and its a significant amount of data.

 

[Mise]

So show us the data then - actual studies on which your assertion is based - instead of telling me a handful of names and expecting me to believe you. Just because your prejudices allow you to believe things without any evidence doesn't mean that everyone else will too.

Oh and I'm pretty sure you didn't read this in some academic study on the phenomenon, and then form your opinion based on that study. My guess is that you have this prejudice, based on absolutely nothing, and now you'll go on google and find some data, however unreliable, to back it up.

 

[Archbob]

Easiest search is "Rich athletes that went broke" because among rich people Athletes are probably the most likely to not have a good education.

There's lists everywhere of athletes that had hundreds of millions and ended up broke:

http://www.businesspundit.com/25-rich-athletes-who-went-broke/


Obviously that is not all of them. But 25 isn't a insignificant number among rich athletes without an education because there not that many of them in the first place considering you have to be among the world's best in a sport to be on this list and you have to not have an education. This list if 25 is pretty reliable data, because people knew how much they made(usually in the tens or hundreds of millions) and then proceeded to lose all of it in the following years.

This list didn't even mentioned some obvious ones like Charles Barkley or Antoine Walker which means despite have 25, they left out really obvious choices because they already had 25.

Also, for a more comprehensive study, the NBA player association gathered stats from retired players and found that 60% of the went Bankrupt after 5 years of retirement. Yes, that is more than half of them.

http://mediatakeout.com/21738/study-60-of-nba-players-are-broke-after-5-years-of-retirement.html (scroll down to read the article).

Also for Lottery winners there's this academic study:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1324845##

This paper examines whether giving large cash transfers to financially distressed people causes them to avoid bankruptcy. A comparison of Florida Lottery winners who randomly received $50,000 to $150,000 to small winners indicates that such transfers only postpone bankruptcy rather than prevent it, a result inconsistent with the negative shock model of bankruptcy. Furthermore, the large winners who subsequently filed for bankruptcy had similar net assets and unsecured debt as small winners. Thus, our findings suggest that skepticism regarding the long-term impact of cash transfers may be warranted.

I remember reading somewhere else that at least 30%(remember it was 30-70% because lotto companies don't release all data of winners after the win) of big lotto winners($150,000+ prizes) went broke within 5 years.

Yes, you may not like to believe it but a large % of the population is really that stupid.

 

[Mise]

Again, that's specifically not what we're asking for. Your inability to differentiate between hard, statistical evidence, and a link you found on google, seems to be a recurring problem for you.

 

[Archbob]

Again, that's specifically not what we're asking for. Your inability to differentiate between hard, statistical evidence, and a link you found on google, seems to be a recurring problem for you.

I quote a scientific study and a report by the NBA player association. They both say, statistically , that a large % of rich athletes and lotto winner go broke.

See, 1 in 3 is a statistic as is 60% of NBA players going broke within 5 years is also a statistic. I doubt NFL players and MLB players are that much smarter with their money.

It seems that you just don't want to believe that a large % of people are really that stupid.

Also a link with 25 rich athletes that went broke represents a significant amount of data because there aren't so many rich athletes. Those are 25 data points.

 

[Mise]

You ninja-edited those harder sources into your previous post after I replied to it. At the time I replied, you had only posted that "businesspundit" link.

Anyway, congrats on having a prejudice then going on google to find data that backs up your prejudice. The problem is amply demonstrated with your academic study: it only studies lottery winners who were already financially distressed to begin with. It tells us nothing about people who won the lottery but were careful with their winnings and maintained their wealth. Crucially, it doesn't tell us what fraction belong to the former group, vs what fraction belong to the latter group.

As for basketballers who stopped playing basketball and subsequently went bankrupt, it hardly surprises me that people who are used to earning millions of dollars a year struggle to maintain their lifestyle when they stop earning millions of dollars a year and have to start living on less.

 

[Archbob]

You ninja-edited those harder sources into your previous post after I replied to it. At the time I replied, you had only posted that "businesspundit" link. Anyway, congrats on having a prejudice then going on google to find data that backs up your prejudice.

I doubt the NBA player's association is prejudice against their players. Either way, you can't refute now that a large % of these people really do go broke after earning millions.

Whether I'm prejudice or not doesn't change the fact that 60% go broke within 5 years. Consider than the Minimum NBA salary is something like 300-500k a year I believe, they do lose quite a lot of money.

 

[Mise]

Yes, when they stop playing, and therefore stop earning millions of dollars a year, they tend to run down their savings instead, until it runs out. Obviously, people who become unemployed or retire start to lose their wealth. So again, like the lottery study, the sample is systematically biased.

Back to google for you! Go, find more data that reinforces your existing opinion, instead of forming an opinion based on existing data.

 

[GoodGame]

LOL at people majoring in pre-med. It's not even a major at any respectable university. It's properly just a pre-med program designed to get kids ready for med school, the underlying major should usually be biology or chemistry.

You're wrong about pre-med not being a respectable major, at least for the USA. I'd agree that it is a bit of a biology degree. It's a career path as much as it is a degree, but it is degree nonetheless.

http://www.globalscholar.com/collegefinder/1979-harvard-university/programs-majors-degrees.aspx