Successful Money Management is More About Psychology than Optimization

I don't really follow sports, so I got to this article a little bit late, but it illustrates a huge point about money management that I wanted to mention. Essentially, this basketball player (Michael Carter-Williams) created a trust fund for himself with the massive amount of money that he's earning from his basketball salary.

A trust fund is kind of a strange vehicle for someone to create for himself or herself. Usually they're used to transfer wealth between parties. In this case, it seems like he created a trust to prevent himself from doing something stupid and blowing all his money. By forcing himself into a sort of savings plan, he can avoid the pitfalls that many other pro athletes fall into.

I think that's brilliant.

Managing your money is about playing to your own strengths and doing things to compensate for your weaknesses. If you can't deal with seeing stock prices fluctuate, maybe you should invest in real estate or something else where you don't get constant price quotes. If you can't read a balance sheet and you don't want to think too much about your investments, then index funds are a beautiful thing. There are options for every disposition and temperament, you just have to know yourself well enough to choose the right thing.

Also, my brain exploded when I read this paragraph:

The lack of financial health is a major epidemic in pro sports, Dzamba said, with 60 percent of NBA players declaring bankruptcy within five years of their athletic retirement and some 78 percent in the NFL doing so, according to a Sports Illustrated report.

What!? There are no words for how ridiculous this is.