Jeff Foster, the Richest Man in the NBA

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 11-12-2011, 10:02 PM         #1
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Jeff Foster, the Richest Man in the NBA
 

 

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Ballllllliiiiiinnnn'

Early in his National Basketball a.ssn. 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 a.ssn. 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.

When Foster graduated from high school, his relatives gave him $1,000, which he invested in two mutual funds. “I didn’t really need the money for a while,” he said over lunch on Oct. 5 near his home in Carmel, Ind. “I always had an interest in finance, but actually having my own money in the markets took it to another level.”
He enrolled in the first school that offered him an athletic scholarship, Southwest Texas State University (now Texas State University-San Marcos). “My goal was to get a free education,” he says. “I never thought I’d play in the NBA.” Yet he had a strong college career, and the Golden State Warriors selected him with the 21st pick of the 1999 draft, before trading him to the Pacers. His rookie deal of $4.34 million over four years was much less lucrative than those of NBA superstars, but compared with the average American, Foster was rich.

“As I learned in my finance classes in college, when you’re in your twenties you invest heavily in the market, and as you get older, you become a lot less aggressive,” says Foster. His initial forays into investing coincided with the peak of the Internet bubble. “I was extremely aggressive investing early on. I put a lot of money into an Internet fund. I watched it go up about 20 percent in the first couple of months, but then it just vanished.”


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Foster is richer than both these guys

Foster now considers himself fortunate for having learned an early lesson. By the time he signed his second deal with the Pacers in 2002—six years for $30 million—he had become a much more conservative investor. Today, while he still actively buys and sells stocks, only 13 percent of his portfolio is invested in the stock market. Although Foster and his advisers declined to provide the exact amount of his savings, they did provide a breakdown, by percentage, of his portfolio. The biggest portion—33 percent—is in fixed income, largely municipal bonds. Eleven percent is invested in managed real estate—apartment buildings and student housing that provide Foster with monthly income and tax breaks without the headache of personally overseeing properties and tenants. Eight percent is allotted to private equity; 7 percent is in private investments that aren’t supervised by True Capital Management.

Foster keeps 28 percent of his savings in cash. He says he normally has 5 percent to 10 percent of his portfolio in cash, “but I’m scared of the market now, though I think at some point there’s going to be an opportunity to invest and get a great return.” Foster and many other players turned down the NBA’s offer to spread out players’ salaries over the course of the lockout. “It’s better to have that money earn interest for you,” Raetz says, adding that the NBA’s offer makes more sense for younger players who haven’t saved much.

Unlike many NBA players, who may have various children, parents, cousins, and friends to support, Foster has only his immediate family to worry about. “Most of our clients are the only real earning source for their extended families,” Raetz says. It isn’t just family expenses that can get athletes in trouble. Former Chicago Bulls All-Star Scottie Pippen’s purchase of a private jet resulted in years of financial hardship and legal battles. Las Vegas casinos accused Antoine Walker of amassing more than $800,000 in gambling debts, while the sports blog Deadspin reported that during Metta World Peace’s (né Ron Artest’s) stint as a member of the Indiana Pacers, he would pay for his house to be recarpeted each month rather than clean up the dog crap that accumulated. (He now plays for the Los Angeles Lakers.) “The stereotype about the spending habits of athletes is largely true,” Raetz says.

After Foster signed his first contract in 1999, he bought a “modest $175,000 cookie-cutter house,” as he puts it, in downtown Indianapolis. Unless you’re a top-five pick, “it’s really not feasible to spend [$100,000] on a car,” Foster says, explaining why his taste isn’t more lavish. He paid for his wedding to his wife, Jamie, whom he met in college. In 2004, two years after he signed his biggest contract, he upgraded to a four-bedroom, seven-bathroom lake house in Noblesville, Ind. (He’s now trying to sell it for $2.6 million.) Foster sends his five-year-old twin daughters to a private school that emphasizes multilingual education. Annual tuition is about $13,500 per student.

“My biggest luxury expense is that I like to travel,” Foster says. “Given my size, when first class is affordable, I buy it. But we just flew coach back and forth to Texas with the kids, and I just put up the armrests and lay across the seats.”

The lockout has created new issues for NBA players, particularly rookies who have yet to see their first paycheck and aren’t playing overseas. “When they walk into a bank to try and get a loan, they’re unemployed,” Raetz of True Capital says. “They haven’t signed their NBA contract yet.” In several cases, Raetz and his business partner, Heather Goodman, have found private sources to secure loans for such clients. They’ve also signed up their NBA players for COBRA extensions on their health insurance, which the league no longer provides to any players.

Foster counts himself among the lucky ones. With the regular season on hold, he is happy to spend time with his family. As a free agent, he would like to sign again with the Pacers and continue to work for the organization when he retires, but his financial well-being doesn’t depend on another contract, he says. When he signed his $30 million, six-year deal in 2002, he told himself: “No matter what else happens, this is enough money to set myself and my family up for life.”

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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 Jeff Foster, the Buffett of Basketball - Businessweek

82 comments for "Jeff Foster, the Richest Man in the NBA"

 6 years ago '08        #2
Andre3stacks 20 heat pts20
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people can learn from dude. If I made it to the NBA or NFL id start a financial awareness a.ssocation for athletes to show players how to save and not waste.
 6 years ago '07        #3
theFREAK 3680 heat pts3680
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 6 years ago '10        #4
Agentzer0oo0 209 heat pts209
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Too many words..


















































But I did read
 11-12-2011, 10:13 PM         #5
billieskeet  OP
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Baaaaaaaaaaaaaaaaallllllllllllllllllllllllllllliii iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiinnnnnnnnnnnnnnn nnnnnnnnnnnnnnnnnnn
 6 years ago '11        #6
spittapilottalk 44 heat pts44
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a white person? i'm shocked

black people lost
 6 years ago '08        #7
Dee Grande 1269 heat pts1269
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did i miss something, or does this article not mention how much money he actually has?
 11-12-2011, 10:31 PM         #8
Got Cheeve?  OP
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 Dee Grande said:
did i miss something, or does this article not mention how much money he actually has?
they state in the article that they wouldn't reveal all his a.ssets but on savings alone he's at least holding 36 million (article says he saved 3/4s of 47 mill.) that does not include his financial portfolio, and other investments.

the quick reaction would be to say, "but so and so signed a 100 some million dollar contract" the difference is... they already spent most of it on ridiculously huge houses, cars, etc. and wasted it and the rest got sucked up by taxes. the ones who did try to invest, fell for scavenger investors who got their cut then left as the business venture crashed and burned.
 11-12-2011, 10:32 PM         #9
DrX  OP
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 Dee Grande said:
did i miss something, or does this article not mention how much money he actually has?
\this....^^^^

magic is almost a billionare

anyway "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"



that sums it up...white kids got so many advantages that hood kids dont have, they throw it down the drain to....a good strong foundation is everything
 6 years ago '11        #10
DCballer40 
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Title said he is the richest man in the NBA....I read over it, I then skimmed over it and I dont know how he is the richest man in the NBA. I have a hard time believing he has more money than someone like Kobe Bryant. If the title is misleading which I think it is...Im angry that I read this bullsh*t

edit: This article is presuming other superstar NBA players havent saved their money either. Just because Jeff has $35-$37 million on hand...doesnt mean a guy like Kobe or LeBron doesnt have that same amount. This article should just talk about how Foster made great low risk investments and saved his money. I dont like the article a.ssuming he is the smartest/shrewdest NBA player when it comes to his finances.


Last edited by DCballer40; 11-12-2011 at 10:40 PM..
 6 years ago '11        #11
spittapilottalk 44 heat pts44
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 DrX said:
\this....^^^^

magic is almost a billionare

anyway "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"



that sums it up...white kids got so many advantages that hood kids dont have, they throw it down the drain to....a good strong foundation is everything
didn't you admit to being a white kid who pretends to be black as a gimmick?...
 6 years ago '08        #12
Dee Grande 1269 heat pts1269
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 Got Cheeve? said:
they state in the article that they wouldn't reveal all his a.ssets but on savings alone he's at least holding 36 million (article says he saved 3/4s of 47 mill.) that does not include his financial portfolio, and other investments.

the quick reaction would be to say, "but so and so signed a 100 some million dollar contract" the difference is... they already spent most of it on ridiculously huge houses, cars, etc. and wasted it and the rest got sucked up by taxes. the ones who did try to invest, fell for scavenger investors who got their cut then left as the business venture crashed and burned.
where are you getting this information from?
 11-12-2011, 10:55 PM         #13
Got Cheeve?  OP
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uhh... All the fu*king examples in the article. Scottie Pippen, Mark Brunell, Antoine Walker, Lenny Dykstra. Are we really gonna act like athletes don't blow all their earnings on mansions (which value plummeted in the housing crash i.e. Brunell), expensive cars/jets (which lose most their value as soon as they're bought, i.e. Scottie Pippen) jewelry, strip clubs, strippers themselves (they was recently a article on here about Redskins and Raven's players f!ghting over strippers.)

Let's be real, these are all facts.

Also we know damn sure LeBron James with his Miami mansion posted on here, his numerous cars, jewelry, etc. etc. and his entourage alone and how much he likely blew on them going to all his games in Cleveland. The guy is going the same path as every other bound to be broke baller.

Also to the one guy talking about Magic Johnson... Magic Johnson isn't in the NBA... re-read the thread title. Neither is Michael Jordan who surely is worth more than Foster too.


Last edited by Got Cheeve?; 11-12-2011 at 10:57 PM..
 6 years ago '08        #14
Dee Grande 1269 heat pts1269
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 Got Cheeve? said:
uhh... All the fu*king examples in the article. Scottie Pippen, Mark Brunell, Antoine Walker, Lenny Dykstra. Are we really gonna act like athletes don't blow all their earnings on mansions (which value plummeted in the housing crash i.e. Brunell), expensive cars/jets (which lose most their value as soon as they're bought, i.e. Scottie Pippen) jewelry, strip clubs, strippers themselves (they was recently a article on here about Redskins and Raven's players f!ghting over strippers.)

Let's be real, these are all facts.

Also we know damn sure LeBron James with his Miami mansion posted on here, his numerous cars, jewelry, etc. etc. and his entourage alone and how much he likely blew on them going to all his games in Cleveland. The guy is going the same path as every other bound to be broke baller.

Also to the one guy talking about Magic Johnson... Magic Johnson isn't in the NBA... re-read the thread title. Neither is Michael Jordan who surely is worth more than Foster too.

so basically, you're pulling sweeping generalizations out of your a.ss. oh, okay.
 6 years ago '07        #15
joshdogg26 193 heat pts193
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lol when i was in indy i saw this bum practicing free throws at the monon center wearing pacers gear still . it always amazed me that he was still in the NBA. he's lucky he found the pacers and stuck with them because i don't think anybody else would have held on to him this long .
 6 years ago '05        #16
trb_5 
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stop taking the article so literally....its just saying that foster is a smart man who saved his money made smart low risk investments and didnt spend lavishly

thats it...thats the point....so enough with the comparing of players acting like groupies...n*gga lebrons money aint your money
 6 years ago '05        #17
trb_5 
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 joshdogg26 said:
lol when i was in indy i saw this bum practicing free throws at the monon center wearing pacers gear still . it always amazed me that he was still in the NBA. he's lucky he found the pacers and stuck with them because i don't think anybody else would have held on to him this long .
when you have that size you should have a job for a long time...not to many ppl are 6'11'' or 7 feet tall....even in the nba
 6 years ago '05        #18
awall 
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wtf.... says nothing about him being the richest....lebron makes in 1 year what this dude is worth.
 11-13-2011, 12:54 AM         #19
Got Cheeve?  OP
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Anyone mad refuses to believe some nerdy a.ss peckerwood is the richest player in the league. The whole point is all the other athletes have their money tied up in expensive lavish sh*t like mansions and cars, jewelry and women (NBA players are known johns.) all sh*t that fu*ks you up in the long run.

You calling that generalities? Do you remember LeBron's Miami mansion posted on here? how's that a generality. That's a fact, that sh*t was ridiculously huge. Dude doesn't need that much space and it costs a huge chunk of his pay. And it's nothing worth what it used to be. And the value keeps going down (like most Florida property, I should know, I live in Florida.)

Ya'll too butt hurt or caught up wanting to be just as wasteful as these idiots that you can't give this man props.

Another dude that flew under the radar in the NFL and did it the smart way. Ex-Jacksonville Jaguars DE Tony Brackens who retired in the early 2000s. He used to get laughed at by his teammates for driving around in a 91 Toyota and sh*t. Meanwhile new rookie draft pick R.J. Soward (remember him? exactly) was pulling up in the brand new Escalade. Just like Foster here, Brackens saved his millions and when he retired he bought up a sh*t load of land in his home state of Texas where he runs farms and cattle etc. and makes money off the land. He was fiscally responsible and his family is set for life because of it.

"Put a beggar on horseback & he’ll ride in to hell"
 6 years ago '07        #20
KnicksLost 17 heat pts17
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 Got Cheeve? said:
they state in the article that they wouldn't reveal all his a.ssets but on savings alone he's at least holding 36 million (article says he saved 3/4s of 47 mill.) that does not include his financial portfolio, and other investments.

the quick reaction would be to say, "but so and so signed a 100 some million dollar contract" the difference is... they already spent most of it on ridiculously huge houses, cars, etc. and wasted it and the rest got sucked up by taxes. the ones who did try to invest, fell for scavenger investors who got their cut then left as the business venture crashed and burned.
not to mention the taxes on it, lawyer, account fees, etc...
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