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Thread: Jeff Foster, the Buffett of Basketball

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    Default Jeff Foster, the Buffett of Basketball

    Jeff Foster, the Buffett of Basketball
    Amid the profligate culture of the NBA, the Indiana Pacers veteran did something radical with his money: He saved it
    Early in his National Basketball Assn. career, Jeff Foster, a center for the Indiana Pacers, became acquainted with a man he came to think of as a friend. The man followed the team on road trips and called Foster’s hotel room to invite him for meals. Then one day the man presented Foster with a business opportunity: For just $2 million, the basketball player could be part of a surefire venture to open a bed and breakfast in the verdant Pennsylvania hills. When Foster explained, truthfully, that he didn’t have that kind of money—the Pacers paid him just over $4 million for the first four years of his career, about half of which was gobbled up by taxes, escrow payments, and his agent’s fee—his “friend” was undaunted. He asked Foster to introduce him to an older teammate who had just signed a much more lucrative contract. Foster declined. “And of course,” Foster says, “I never spoke to him again.”

    Professional athletes are not generally known for shrewd financial judgment. What was former Notre Dame star player “Rocket” Ismail thinking when he bankrolled a calligraphy business, for example? Did it make sense for ex-NBA guard Latrell Sprewell to turn down a $21 million contract offer late in his career and then buy a yacht? Sports Illustrated estimates that 60 percent of NBA players go broke within five years of retirement and 78 percent of National Football League players “have gone bankrupt or are under financial stress” within two years after they stop playing. (According to NBA Players Assn. spokesman Dan Wasserman, between 6 percent and 8 percent of players end up broke.)

    It takes about five seconds to compile a list of once-rich, now-broke sports luminaries: former Boston Celtics All-Star Antoine Walker (gambling habits, huge entourage, multiple luxury cars); New York Jets backup quarterback Mark Brunell (real estate investments in a tanking Florida market); and, perhaps most notoriously, ex-Philadelphia Phillies center fielder Lenny Dykstra (who bought and unsuccessfully tried to flip Wayne Gretzky’s $17 million home, was indicted for bankruptcy fraud, and faces charges of grand theft auto and indecent exposure; Dykstra denies the charges).

    Such recklessness typically earns athletes more ridicule than sympathy. And yet for the moment, the ranks of America’s unemployed include pro basketball players: Because of an owner-led lockout, most NBA players, even those under contract, will stop receiving paychecks by the end of October, when the regular season was scheduled to start. Some players are scrambling for backup jobs, with about 15 percent, including standouts such as Deron Williams, signing up to play in overseas leagues in the interim.

    For hard-nosed, low-scoring NBA veterans such as Foster, however, hooking up with a foreign team isn’t a viable option. Foster is a free agent, which means he doesn’t know where he’ll be playing next, if at all. At 34, he hasn’t achieved the fame of the league’s stars. Look him up on YouTube (GOOG) and you find this: “Amare Stoudemire dunks Jeff Foster to the ground!” and “Shaquille O’Neal alley-oop dunk over Jeff Foster.” Nonetheless, Foster has played in the NBA for 12 years and earned more than $47 million, and he’s done something extraordinary: He’s saved about three-quarters of his take-home pay. “Jeff’s an example of a pro athlete who’s done it right,” says Doug Raetz, co-founder of True Capital Management, a San Francisco-based wealth management firm that represents Foster and about 150 professional basketball, football, and baseball players.

    Foster, who is six-feet-eleven, entered the league with advantages that many of his fellow professional athletes lack. He grew up in an upper-middle-class home—his mother worked as a high school principal in San Antonio, while his father ran a property management company. When he was in 11th grade—the same age as LeBron James when he had his first Sports Illustrated cover—Foster was playing on the junior varsity squad and thinking about becoming a journalist. That focus on another career may ultimately have helped him financially. “In our culture, a top athlete often stops being a student in the seventh grade and the focus is on sports,” says Peter Dunn, a financial adviser who has worked with several Indianapolis Colts players.
    http://www.businessweek.com/magazine...-10202011.html

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    Default Re: Jeff Foster, the Buffett of Basketball

    Just thought everybody would enjoy a look into the mind of this thug.

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    Default Re: Jeff Foster, the Buffett of Basketball

    Everyone needs to read the 4th sentence in the first paragraph of that article.

    Btw, good for Foster. He may never have to work again.

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    Default Re: Jeff Foster, the Buffett of Basketball

    "May?"
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    Default Re: Jeff Foster, the Buffett of Basketball

    I like the part about Metta world **** Paying to have his floors re carpeted once a month rather than to clean up the dog mess.

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    Default Re: Jeff Foster, the Buffett of Basketball

    Jeff has done things right that's for sure. thanks for posting this article. Nice insight.
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    Default Re: Jeff Foster, the Buffett of Basketball

    Quote Originally Posted by kielbeze View Post
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    I like the part about Metta world **** Paying to have his floors re carpeted once a month rather than to clean up the dog mess.
    Ha, thanks, I didn't think there was more to the article. I liked this part:

    "Still, he’s looking to cut costs. After Foster signed his latest contract extension in 2008—two years for $12.73 million—he did indulge in one extravagance, buying himself a $100,000 Porsche. “I wanted to treat myself, because I knew it could be my last big contract,” he says. But then, with the lockout on his mind, he sold it at a $3,000 loss. Now he drives an Infiniti SUV."

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    Default Re: Jeff Foster, the Buffett of Basketball

    I don't get it. Assuming half is gone to taxes et al, that's 3mm each of two years, plus what he made before that contract (at least another 6mm altogether, right?). Why the need to sell a single $100k item?

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    Default Re: Jeff Foster, the Buffett of Basketball

    How the heck did he only take a 3k loss? I'd have expected 30k.
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    Default Re: Jeff Foster, the Buffett of Basketball

    Quote Originally Posted by Hicks View Post
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    I don't get it. Assuming half is gone to taxes et al, that's 3mm each of two years, plus what he made before that contract (at least another 6mm altogether, right?). Why the need to sell a single $100k item?
    He may have a certain amount allocated to his savings so his spendable cash is drying up. Now that's discipline.

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    Default Re: Jeff Foster, the Buffett of Basketball

    Quote Originally Posted by Anthem View Post
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    How the heck did he only take a 3k loss? I'd have expected 30k.
    Given the way he handles his money, that Porsche might have been used, and most of the depreciation already taken by others.

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    Default Re: Jeff Foster, the Buffett of Basketball

    Quote Originally Posted by Anthem View Post
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    How the heck did he only take a 3k loss? I'd have expected 30k.
    don't forget, he was selling jeff foster's old porsche. bet that raised the selling price some. gotta be someone who will pay extra for a player's car maybe.

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    Default Re: Jeff Foster, the Buffett of Basketball

    The real question is: how the hell did he ever fit into a Porsche?

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    Default Re: Jeff Foster, the Buffett of Basketball

    Jeff Foster will go down as my second favorite Pacer of all time. I love that guy.

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    Default Re: Jeff Foster, the Buffett of Basketball

    Quote Originally Posted by Eindar View Post
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    Given the way he handles his money, that Porsche might have been used, and most of the depreciation already taken by others.
    That would make sense. Another option: maybe the reporter meant he sold it for 3k under blue book, just to get it sold.
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    Default Re: Jeff Foster, the Buffett of Basketball

    Quote Originally Posted by Hicks View Post
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    I don't get it. Assuming half is gone to taxes et al, that's 3mm each of two years, plus what he made before that contract (at least another 6mm altogether, right?). Why the need to sell a single $100k item?
    Because he apparently has the mentality of someone who keeps his millions.
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    Default Re: Jeff Foster, the Buffett of Basketball

    I believe he sold it for an SUV because he has little kids at the moment.
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    Default Re: Jeff Foster, the Buffett of Basketball

    Quote Originally Posted by MrSparko View Post
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    I believe he sold it for an SUV because he has little kids at the moment.
    That's correct. I'd heard this before. What I'm not sure about is why he would be selling his house. It's on the market now. Why sell now if you are not exactly sure where you will be, but wanted to stay here? Unless he is going to buy another house here and stay settled regardless of what happens after the lockout...

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    Default Re: Jeff Foster, the Buffett of Basketball

    I have a friend who dated Mark Pope for a while during his time with the Pacers. He made quite a bit less than Jeff Foster. His plan was to live of his per diem.

    When NBA teams go on the road, they get a per diem of a few hundred dollars per day. This money is intended to cover food and travel expenses. What Pope would do is eat at Subway or something similar. He wouldn't go out and party because he is Mormon and doesn't drink.

    So he would spend 10-20 bucks a day out of the hundreds he was given. Where did that money go? He saved it up and spent in on a cheap apartment close to Conseco. He was essentially living expense free. He just banked his paycheck.

    I told this story to another minimum salary guy (not a Pacer), and he laughed and said he did the same thing (minus the not drinking thing - he just drank modestly and stuck to beer). He also said he knew a few other players who also do it.

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    Default Re: Jeff Foster, the Buffett of Basketball

    Quote Originally Posted by MrSparko View Post
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    I believe he sold it for an SUV because he has little kids at the moment.

    Claiming to be frugal sounds a lot better than "My wife made me."
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    Default Re: Jeff Foster, the Buffett of Basketball

    Quote Originally Posted by shags View Post
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    Everyone needs to read the 4th sentence in the first paragraph of that article.
    This sentence?
    When Foster explained, truthfully, that he didn’t have that kind of money—the Pacers paid him just over $4 million for the first four years of his career, about half of which was gobbled up by taxes, escrow payments, and his agent’s fee—his “friend” was undaunted.
    Yeah, he made $4mil total, and the guy was asking for a $2mil investment.

    Why is it so important of a sentence? It seems like common sense, that someone wouldn't have 50% of his total life long pay sitting right beside him ready to be spent.

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    Default Re: Jeff Foster, the Buffett of Basketball

    Quote Originally Posted by FlavaDave View Post
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    I have a friend who dated Mark Pope for a while during his time with the Pacers. He made quite a bit less than Jeff Foster. His plan was to live of his per diem.

    When NBA teams go on the road, they get a per diem of a few hundred dollars per day. This money is intended to cover food and travel expenses. What Pope would do is eat at Subway or something similar. He wouldn't go out and party because he is Mormon and doesn't drink.

    So he would spend 10-20 bucks a day out of the hundreds he was given. Where did that money go? He saved it up and spent in on a cheap apartment close to Conseco. He was essentially living expense free. He just banked his paycheck.

    I told this story to another minimum salary guy (not a Pacer), and he laughed and said he did the same thing (minus the not drinking thing - he just drank modestly and stuck to beer). He also said he knew a few other players who also do it.
    I wonder how much money that per diem adds up to when you sum it for all of the players in the league? And is that money coming from the owners' piece of the pie, or the players'?

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    Default Re: Jeff Foster, the Buffett of Basketball

    Quote Originally Posted by Hicks View Post
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    I wonder how much money that per diem adds up to when you sum it for all of the players in the league? And is that money coming from the owners' piece of the pie, or the players'?
    It's directly out of the players' share. It's actually listed on their paystubs as a deduction the same as insurance, taxes, 401k, etc.

    In the grand scheme of things, it's not very much.

    I believe last season the per diem was $113. At 80 road days per year and 15 players per team (I realize not everyone had this many players and not everyone had 80 days on the road but they're round numbers) it would total $4,068,000 for the season. Easily less than $10,000 per player.
    Last edited by BRushWithDeath; 10-24-2011 at 02:48 PM.
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    Default Re: Jeff Foster, the Buffett of Basketball

    Quote Originally Posted by BRushWithDeath View Post
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    It's directly out of the players' share. It's actually listed on their paystubs as a deduction the same as insurance, taxes, 401k, etc.
    That was not my understanding - the per diem is above and beyond the salary, not deducted from the salary. It would be listed on the pay stub as additional income.
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    Default Re: Jeff Foster, the Buffett of Basketball

    Quote Originally Posted by BillS View Post
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    That was not my understanding - the per diem is above and beyond the salary, not deducted from the salary. It would be listed on the pay stub as additional income.
    I was nearly positive that it's the players who contribute that amount but it's been a few years since I've seen an NBA paystub.

    Regardless, the amount is entirely insignificant as far as the labor battle is concerned.
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