On October 30, 2013, NBA Hall-of-Famer Allen Iverson announced his retirement from basketball.
Known as “AI” or “The Answer” formally announced his retirement from the NBA on Wednesday during an occasionally emotional hour-long news conference on the Wells Fargo Center court, hours before the Philadelphia 76ers played their season opener against the two-time defending champion Miami Heat. Iverson last appeared in an NBA game on Feb. 20, 2010. The Sixers will retire his number 3 on March 1 against Washington.
“My mom always told me that I could be anything I wanted to be,” Iverson said at his retirement. “And I truly, actually believed it. And I fought. I went through a whole lot trying to get to this point right here.”
Iverson, now 45, earned 11 consecutive All-Star selections and the 2001 NBA MVP award during his 14-year NBA career. His career peaked when he led Philadelphia to the 2001 NBA Finals, where it lost in five games to the Los Angeles Lakers. He was a seven-time All-NBA selection, a four-time NBA scoring champion, a three-time steals leader, a two-time All-Star Game MVP and the 1997 Rookie of the Year.
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We all know the financial traps that many athletes usually fall victim to, and Iverson, unfortunately, fell into that category too. It became evident that he had financial worries in 2012.
In a December 2012 court filing, Iverson told a judge in Georgia that his monthly income is $62,500 but that his expenses were $360,000! The breakdown was as follows:
– $125,000 goes to paying back various creditors and mortgages.
– $10,000 on clothes
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– $10,000 on restaurants/entertainment
– $10,000 on groceries
So, you do the math: if he’s making roughly $60,000 a month, but his expenses are over $300,000 a month, Iverson was in debt, big time!
As a matter of fact, Allen’s financial situation came to light in 2012 after a judge ordered him to pay $900,000 to a Georgia jeweler but apparently Iverson didn’t have the funds to cut the check.
But instead of being one of the hard-luck stories you hear on ESPN, in 2001, Iverson made a decision that would change his financial outlook for the rest of his life. It was a move that actually saved him from himself. He signed a very unique endorsement deal with Reebok. In addition to paying $800,000 a year for life, Reebok set aside $32 million in a trust fund that Allen will not be able to access until he turns 55 in the year 2030. This deal came to light when Allen’s ex-wife filed for divorce. As a result of the divorce, Allen will inherit half the trust fund in 2030.
So instead of being tempted to blow the money when he had it all, he put it off to a point where he could possibly be wiser, more responsible and have a different perspective on life. That’s smart.
How Does a Trust Fund Work?
Trust funds can hold lots of kinds of property, from cash to investments to real estate to artwork. They can even hold
