The former NBA scoring champ, and league MVP, Allen Iverson dependably had a style for the emotional. LeBron James considers him the best pound for pound player to ever play, however, he had his off-court issues.
A man who earned well over $150 million in his life was diminished to remaining in a court amid 2012 divorce procedures and pulling out his pockets, shouting that he didn’t have enough cash for a cheeseburger.
Iverson’s descent came just about every way imaginable, with a 50-man company, an extreme betting habit, lawful charges, liquor inconveniences and a thirst for excitement depleted his $150 million fortune.
In January 2013, Iverson received an offer to play for the Texas Legends of the NBA D-League, but he declined. On October 30, 2013, Iverson announced his retirement from basketball, citing he’d lost his desire to play. At the 76ers 2013–14 season home opener that night, he received a standing ovation at the beginning of the second quarter.
The retirement ceremony was attended by former Georgetown coach John Thompson and Sixers great Julius Erving. Iverson said he would always be a Sixer “until I die,” and that while he always thought the day he retired would be a “tough” day, he instead stated it was rather a “happy” day.
Talking about $150 million fortune, that number excludes millions more in non-salary income, including a $50 million lifetime endorsement contract from Reebok. And the player is best known as “the Answer”, has no easy answer for the bills, including around $859,000 he owes to a Georgia jewellery store.
Most sports fans saw this day coming. Some will point to Iverson’s role in a controversial bowling alley brawl in Hampton, Virginia back when Iverson was in high school.
Though Iverson ended up serving four months in prison for the crime, Georgetown coach John Thompson — in his defining Lawrence Phillips moment — overlooked the incident in recruiting Iverson, and Virginia governor Doug Wilder eventually granted Iverson clemency.
Fairly or unfairly, the affair tainted Iverson’s reputation and telegraphed his later troubles, which reportedly included missed practices, refusal to train, and frequent disputes with coaches. And that’s just basketball-related behaviour. Iverson’s troubles also included a 1997 arrest for carrying a concealed weapon (for which he pleaded No Contest and was sentenced to community service) and a later 2002 arrest (though never convicted) for trespassing, criminal conspiracy, false imprisonment, and making terroristic threats. There were at least two cases of assault by Iverson bodyguards, including a vicious one in 2006 by Jason Kane (as Iverson idly watched), for which Iverson had to pay victim Marlin Godfrey $260,000 in damages for injuries he suffered, including a torn rotator cuff, a concussion, a ruptured eardrum, and a burst blood vessel in his eye. The judgment was upheld on appeal in 2009. Finally, there was Iverson’s banishment from casinos in Detroit and Atlantic City.
What’s sad is that the remedy was so simple and easy. For instance, I calculate that even if Iverson had passively invested (say, in a broad-based index fund like SPY) only half of the more than $200 million he reportedly made over the past sixteen years, and wantonly squandered the rest, the amount he invested would have at least kept pace with inflation. I am not talking hedge funds or sexy IPOs. I am talking large-cap staples of the American economy, with no “vig” at all to the money management sharks, Ponzi schemes, and private equity shysters that circle pro athletes and their posses. A high-rated, tax-free, long-term municipal bond ETF like MLN might even be safer, if not always more profitable.
Most material things don’t carry much resale value. Yet celebrities in general, and pro athletes, in particular, think they do. Blinged-out, overly customized, and hard-to-resell mansions, diamond-studded watches, Gulfstream jets, fur coats, cheesy overpriced jewellery, and the requisite Bentley’s all lose their value over time. Cars, no matter what the brand, lose value as soon as they are driven off the lot. Same goes for planes. In only rare cases does a watch grow in value. Ditto for jewellery, especially garish jewellery. The best and safest way to grow money over the long-term is through investing in dividend-paying stocks.