Sources inside Manhattan media startup Millennial Memes report that an unpaid intern, Jake Franklin, won’t stop making awkward slavery jokes.

The NYU recent grad, who recently told friends that he joined Millennial Memes to bolster his reputation as a social media dynamo, has taken to responding “Yes Massa!” whenever a superior asks him to complete a task, like distributing the mail or finding Google images of hip DJs.

“I mean, It’s awkward,” admitted Rachel Salmuski, the social media coordinator at Millennial Memes. “He’s just some upper-middle class white kid from Connecticut, you think he’d know better. At first it was just weird, but now it’s getting really uncomfortable.”

When asked about the status of a research project by Jeff Bloomfield, a Managing Editor, Franklin responded that it was “Way easier than building the pyramids!” and proceeded to slump around the office the rest of the day like he was dragging large slabs of stone.

“Honestly, I’m just waiting for someone to take some fucking initiative and make a montage video of this dickwad’s antics,” said CEO Tad Hunter. “It could go viral!”

The post Unpaid Intern Won’t Stop Making Awkward Slavery Jokes appeared first on The Faster Times.

A new Nielsen study reports that the citizens of the United States of America are furiously masturbating to the new Wendy’s girl.

“We think these results came from two factors,” said Jim Wendell, a spokesperson for Nielsen. “First, there’s the pent-up sexual tension: Americans had been trying to masturbate to commercials starring Dave Thomas and his fat ass daughter for over 50 years and failing. It’s like dropping filet mignon into a pack of hyenas.”

“The second factor is that she’s just an exquisite piece of ass,” Wendell continued.

Nielsen reports that Wendy’s has had to remove life-size cutouts of the new Wendy’s girl from dozens Wendy locations after mass bouts of public masturbation broke out. In one instance in Clifton, NJ, the police were summoned but merely proceeded to rub one out upon arrival.

The post Nation Furiously Masturbating to New Wendy’s Girl appeared first on The Faster Times.

What do many of America’s tech giants have in common? They’re really good at exploiting international tax laws and loopholes to enhance overall profitability.

We’ve talked about the shenanigans of Microsoft and HP here:

Forget Fairness, Let’s Talk About Stupidity (TRB)

But let’s not leave out Google, who has become the Michael Jordan of sheltering income from the collectors, around the world…

From Bloomberg:

Google Inc. (GOOG) avoided about $2 billion in worldwide income taxes in 2011 by shifting $9.8 billion in revenues into a Bermuda shell company, almost double the total from three years before, filings show.

By legally funneling profits from overseas subsidiaries into Bermuda, which doesn’t have a corporate income tax, Google cut its overall tax rate almost in half. The amount moved to Bermuda is equivalent to about 80 percent of Google’s total pretax profit in 2011.

Google paid a tax rate of 2.3% on overseas business last year, according to the story, even though most of that revenue was done in European countries with corporate tax rates of around 30%.

Gangsta.

Source:

Google Revenues Sheltered in No-Tax Bermuda Soar to $10 Billion (Bloomberg)

Read Also:

Forget Fairness, Let’s Talk About Stupidity (TRB)

The post Google’s Bermuda Tax Dodge appeared first on The Faster Times.

My friend Darren Herman helped me think about this post. He sent me this deck along with some thoughts. This slide from Darren’s deck is a good place to start this discussion:

It is true that the vast majority of consumer web apps have been and continue to be monetized with advertising. On mobile that is less true, but becoming more true every day.

There are all sorts of ways to generate advertising revenue online. Here are the entries under the advertising category in our revenue model hackpad:

This list is most certainly not exhaustive but it does cover the most common advertising approaches and you can see how many there are on the Internet. There has been a lot of innovation in this sector in the past 18 years since the first banner ads were created and sold.

The famous Luma Partners slide shows just how complex the online ad market has become over time.

And this market map is by no means exhaustive either. Online advertising is a big and complicated business.

I would break up advertising into two big buckets; ads that are sold and ads that are bought. The first is a relationship business, requires a direct salesforce or a salesforce that you can tap into, and will bring a higher revenue per impression in most cases. The latter is a data business, automated by machines and software, is a volume game and will bring a lower revenue per impression in most cases. Much of the online advertising market is moving inexorably toward the latter category, for good and bad.

The reaction to this move away from high value “brand” advertising to commoditized and programmatic advertising is native ad formats and advertising models. I have written about native advertising at AVC before and am a big fan of this approach. Examples of native advertising are promoted tweets on twitter and radar and spotlight on tumblr. In both examples, the ad unit is the same atomic unit of content as the users create in the service. I think we will see more and more of this as the value of the impression is driven lower and lower in the programmatic model.

When you think about an advertising revenue model, you need to think about one of two things; scale or niche. Scale means hundreds of millions of impressions a month or more. Niche means a valuable audience that advertisers will pay a premium for. But even if you are going for the niche approach, you will still need to have a lot of impressions. Here is why:

Advertising is sold many ways, including:

CPM: Cost per thousand impressions

CPE: Cost per engagement

CPA: Cost per acquisition

CPC: Cost per click

Sponsorship: Fixed cost for a fixed program

[thanks to Darren for that list. I took it directly from his email to me]

With the possible exception of Sponsorship, all of these methods will converge to the same number. For example if you sell a click for $1/click, and one out of every hundred page views turns into a click then you are selling a page view for $1/100 (1 cent), and that turns into a $10 CPM (10/1000).

CPMs have been in decline for years on the Internet. That’s because the Internet keeps on creating more and more inventory. There is no scarcity. And as a result the supply/demand clearing price just keeps going lower and lower. Ten years ago, a $10 CPM was acheivable. Today, you will be lucky to get a $1 CPM. A $1 CPM means that 10 million impressions will generate $10,000. That’s enough revenue to sustain a one or possibly two person business but not much more. You will need at least 100 million impressions and ideally more than 1bn impressions per month to have an interesting advertising supported business at scale. 1bn impressions is a lot of users using your service a lot.

Niche will work at slightly less scale. If you have a unique and valuable audience, you might be able to get a $5 to $10 CPM. So you will need 100 million impressions per month instead of 1bn impressions. That’s still a lot of super valuable users engaging a lot.

If you are going with a scale model and you have a service that has that level of inventory to sell, then you have the choice of building a sales force inside your company or using a third party to sell your inventory. You don’t need just one third party. You can use many of them. That’s where the Luma slide (above) comes into effect. There is an entire industry built to take the inventory you give to a third party and put it through endless machines and algorithms before it is shown to an end user. I will not get into this in more detail here but Darren’s slide deck, which I linked to above, has some good information on that. When you use a third party to sell your advertising you can give away anywhere from 50% of ad revenue to 20% of ad revenue. Most commonly it is somewhere in between.

If you are going with the niche or native approach, you will need your own sales force and you will need to hire a leader for that sales force (a VP Sales or Chief Revenue Officer) who can build and lead that team. The sales leader is a critical hire. There are people who do this for a living, who really understand how to put a team together and generate advertising revenue predictably and reliably, and they are highly compensated and are worth every penny. Do not skimp on this if you are building your own sales force. You may choose to build your own sales force if you are going with a scale model, but you don’t need to do that right away.

In the interest of keeping this post a reasonable length, I will end here. I highly recommend diving into the comments where we will discuss and debate this post. I will conclude by saying that an advertising model is a viable revenue model option if you are building a service that has a lot of scale. But if you don’t have millions of users a month, you should think hard before going in this direction. There is a limited amount of ad dollars out there (except CPA budgets which are in theory infinite) and more and more services trying to tap into them every day which is why advertising rates on the Internet seem to be in permanent and systemic decline.

The post Online Advertising Explained appeared first on The Faster Times.

Hi, I’m Josh Brown. You might know me from such shows as The Fast Money Halftime Report on CNBC or Breakout! with Jeff Macke.

I’m not an economist by training (thank god). I’m just a street smart kid who watches (and chronicles) everything, has no political affiliations (I hate them all) and understands human nature way better than the cloistered academicians and theologians we’ve entrusted our entire business cycle to.

So with that caveat as preamble, allow me to walk you through An Alternative History of the US Economic Recovery – the recent past and present we could have gotten rather than the bullshit one we’re still muddling through now.

Keep in mind that the below is merely a simulation.

2009

It starts, as it must, with Barack Obama’s coronation as change agent extraordinaire in January of 2009. Rather than surrounding himself with bankster cronies like Larry Summers and Bob Rubin, Obama pays closer attention to the Volcker cohort within his tent and tackles financial reform first. Rather than blow the most historic mandate that any President in modern times has ever been handed on an ill-fated healthcare fight, Barack Obama focuses on the economy and the financial system from day one – which is why he got elected to begin with.

Meaningful regulation comes to Wall Street rather than the still-being-litigated graveyard grab-bag of armpits and shinbones known as Dodd-Frankenstein. Banks are given 120 days to divest themselves of all proprietary trading activities. Insured deposits are no longer treated as casino lines of credit, bonus-inflating gambles cannot be referred to as hedges. It all ends immediately and no one on The Street in early 2009 has the balls to say a word. They take their medicine and stand down as the mess they created is cleaned up by taxpayers and the grownups spin the chore wheel.

The message that there is law and order again is heard loud and clear, far and wide. We recognize that we are once again in a constructive capitalist atmosphere in which we can build and invest with confidence, not a fucking den of thieves populated with Wall Streeters, Washingtonians and every sycophantic bloodsucker who caters to them.

Prosecutions follow this restoration of the rulebook, thus engendering a renewed trust and faith in the system. Let me explain something to you that nobody seems to to understand: This is a Judeo-Christian society and we crave symmetry as well as a righting of wrongs and a meting out of punishment for wickedness. It is ingrained in us and we cannot move forward until the bad guys get dealt with and faith is restored. Sorry, this is a fact of American life – just look at our folklore and fables and beloved Hollywood film endings and Sunday School syllabi. You will see that I am right. The people need a satisfying ending.

With the return of regulation and the reaffirmation of our values in the form of perp walks, Americans can move on psychologically. They feel as though the chapter has closed which is a prerequisite for a new chapter to be opening. This leads to a resumption of business as usual rather than the next-shoe-to-drop syndrome that currently plagues us. We start fresh and leave the recent past behind us, it fades from view like the atrocities of Bernie Ebbers (WorldCom) and Jeffrey Skilling (Enron) faded from the public consciousness a generation earlier.

2010

This renewed confidence – real confidence, not that Wealth Effect bullshit from pumping stock and oil prices – translates into more spending and investment. Same as it always has for 5000 years. The robust recovery that corporations were crowing about in the summer or 2010 becomes self-reinforcing as small business owners and their employees buy into it. They plan vacations and have more babies, their kids move out of their houses and form households of the own. Multi-year commercial real estate leases are signed and people start investing for their future. The virtuous circle picks up where it left off, minus all the disgusting leverage in the system pre-2007. The allows the Fed to do then what would be unthinkable now – RAISE RATES.

The logic is unassailable – in 2010 we had a golden moment, Escape Velocity from low growth and the new normal was in sight! We had a chance to build on the nascent recovery’s momentum in that moment where US corporations were telling us that it was business as usual and demand was screaming back.

All we had to do at that moment was begin to shut the door on zero percent rates. People would have scrambled to run through that door before it closed. That loan to expand from one store to three, that revolving credit line to begin shipping product to Asia, that ReFi on the house to buy the two-family property next door…all of it!

When people see a wide open door – which is essentially what the Fed’s policy has been – they ignore it. “What’s the rush?” Bernanke’s out telling people no rise in rates until 2015. Guy’s brilliant but knows nothing about how people operate, the robot read books for 30 years instead of living life (please read The Poindexter Theory or why nerd economists can’t be trusted). He’s a self-proclaimed “Student of the Depression”, not a hustler or an entrepreneur. And by throwing money at the capital asset-holding upper class, he is accomplishing nothing in the way of velocity of money. There is no urgency on the part of the people he is making liquid with his bond-buying. The free-money borrowing rate for those who need not borrow does nothing to juice that money and get it going. Money supply and liquidity is meaningless if the cash don’t move.

Because that’s not how human’s operate. But they are highly motivated by desire for the things they fear may become out of reach. It is not until you begin to shut the door that people jump and get moving. This is why the Home Shopping Network displays a dwindling item countdown with a timer next to it. Salespeople in every industry call it “the takeaway” - Look, I only have three left, if you don’t want it I owe it to my other customers to call them now…

A 50 basis point hike and an announcement that “The Period of Emergency Monetary Policy is Ending” would’ve given the business community in this country exactly the jolt it needed at that time. Like a green light blasting them in the face. They’d have interpreted that announcement as “This is it, now or never” and the blueprints and business plans would’ve been unfurled across every conference room and kitchen table in America.

Escape Velocity Achieved. Mission Accomplished.

2011

Following that, an ordinary and orderly creep back up to 1% Fed Funds rate would’ve been possible, slowly so as to maintain low enough mortgage rates to allow the housing stabilization process breathing room. With the accompanying resumption of business activity and confidence, the banks could certainly have borne the hike and their net interest margins would’ve looked better than they do now. Again, the virtuous circle.

Granted, under this scenario the Republicans probably still take back seats and influence within Congress during the 2010 midterms, predominantly because the debt levels are still scary-big and Obama really sucks at communicating his own record. Also, he’s still black and there’s a built-in percentage of voters who will never get over that.

But in the context of a real recovery, the debt ceiling debate likely does not snowball into the events of Summer 2011, even if partisan rancor is still pretty prevalent. This means that S&P doesn’t downgrade the US as issuer and bonds don’t launch into this last leg of their multi-decade rally. Because we are more greedily productive and less shell-shocked in general.

2012

Coming into 2012, Americans are feeling good about their economic recovery and they are responding accordingly – by fueling its continuance. Income inequality begins to level off and hourly wages creep higher. The temporary and part-time workers of 2010 become full-time, in the absence of drastic healthcare cost fears, employers have little reason not to add staff in a burgeoning growth environment.

Europe remains a shit show, but it is their shit show. We giggle as Jay Leno does jokes about it and European investors plow money into US stocks and banks, anything to escape their own little Cirque du So-lame economy. Europe remains a risk for the US markets, but not one that we fret about every day for two and a half years.

Woe-is-me sad sack movies and shows like Larry Crowne and 2 Broke Girls never get greenlit and PIMCO’s ‘New Normal’ spiel becomes a trivia question in some forgotten Economic Edition of Trivial Pursuit. Bond funds do not take in a trillion dollars in net cash inflows over these years but equity funds do. This rising tide reduces the mental and financial strain on insurance companies, pension funds and other large investment pools.

The result of all of this is an unemployment rate closer to 7% with a renewed emphasis on programs like computer literacy and infrastructure refurbishments – rather than just the austerity and tax rate debate we have now. It’s not that the deficit isn’t out of control in this scenario, it’s that with building growth, trend change in the deficit is finally within sight. This eases the pressure so that we can think straight rather than scream about cliffs and slopes.

Obama probably gets reelected again but the Republicans have a more constructive message and voters reward them with large gains in both houses of Congress in November 2012. Geithner hands the reins to Dimon at Treasury, MSNBC never has the need to radicalize to the left and the Tea Party movement dissolves back into the Klan or the Civil War Reenactment Society or whatever the fuck it was before the Koch Brothers started writing checks and chartering coach buses.

And I’m not saying we fixed everything or that headwinds would disappear. But if we’d done it this way you’d probably be out doing more interesting things that reading blogs about the economic crisis. Because it would have already passed into history rather than lingering as it still does to this day.

And for those of you who are all excited to go into my comments section and say that psychology isn’t powerful enough to have changed the debt dynamics of our balance sheet recession, I would submit to you that every major turning point in world history occurred as a function of a psychological shift, economic history being no different. Greed and fear is all there is and all there ever has been. All of the major religions and geopolitical divisions since the beginning of time have come about as a result of people attempting to control or harness these two almighty forces for their own gain.

And lest you think I am Monday-Morning Quarterbacking, may I present to you the following comments I made in real-time as that moment of genuine recovery was passing us by:

Raise Rates, Cowards (10/21/2010)

In the Anti-Stimulus Camp, Jeff Matthews is Head Counselor (11/1/2010)

Einhorn Joins the Raise Rates Camp (12/27/2010)

But we blew it. And the Unrecovery continues. You can call it a “beautiful deleveraging” if you wish. I call it a missed opportunity. Especially when you consider how it could’ve been.

The post Another Way to Think About the Economic Recovery appeared first on The Faster Times.

The folks at Turntable aren’t calling it 2.0, but it sure feels like a massive upgrade to me so that’s what I call it when I talk about the new UI and big rooms concept that Turntable quietly launched yesterday without much fanfare.

Full disclosure, USV is an investor in Turntable and I am on the board.

Turntable.fm, for those that don’t know, is a live social music experience. Anyone can start a room in the service and a room features up to five users who jump up on stage and take turns DJing, and then the rest of the folks in the room listen, rate the songs, and chat. It is the most social music experience I have ever experienced online. I spend most mornings between 5am and 7am eastern hanging out in Turntable. Like most social online services, I have friends there who I have never met in person. I get better music discovery at Turntable from people I have never met than I get from anywhere else.

It makes sense if you think about it. Folks who are so passionate about music that they get up on stage and DJ live in front of everyone else will also likely have spent countless hours finding music that nobody else knows about yet. That’s how music has always worked and how it will always work.

Turntable’s achilles heel has always been that the rooms didn’t scale. In version 1.0, when a room got to 200 people, it closed up to new entrants. So if you showed up looking to get into your favorite room you could often be out of luck. That is not and never was a good user experience.

Worse is that when a musician, artist, or celebrity showed up in one of the rooms, only 200 of their fans could get in to hear what they were up to. So the whole viral nature of an artist with hundreds of thousands or even millions of fans tweeting out that they are in a room in Turntable was mostly wasted in version 1.0.

All of that has been fixed in Turntable 2.0. The rooms scale up as more users show up. The UI changes in real time. A room starts out feeling like a tiny club and could end up feeling like an arena concert. Here’s an example of a “big room” in action:

It’s a real work of UI art and kudos go out to Billy and Byron for their work in building the new Turntable UI.

They’ve also made a bunch of smaller changes, cleaned some things up, moved some things around, speeded it up considerably, and made the service easier to join and get into quickly. I’ve been watching this new version emerge over the past few months and am so excited as a user to be able to experience it myself now.

If you want to see a big room in action, you can log into Turntable today at 3pm eastern to catch the electropop act Passion Pit playing some of their songs in Turntable. I expect that room will fill up nicely. I am going to try to get in and check it out myself in between running around SF between meetings. I hope to see you there.

The post Turntable.fm Gets an Upgrade appeared first on The Faster Times.

Due to the fact that we are homeless in NYC on account of Sandy, the Gotham Gal decided to take her Thanksgiving on the road this year, out to our beach house on the east end of long island. It was a great idea and starting on wednesday afternoon, our entire family and some friends made the pilgrimage out east to celebrate Thanksgiving at the beach.

But when we arrived wednesday evening we found at that Sandy had an impact on our beach house too, specifically the DirecTV satellite dish was out of whack. I guess I should have thought about that but I didn’t. Of course, getting a DirecTV technician out to our beach house on Thanksgiving day was not going to happen. But Thanksgiving without football? That is downright unamerican!

So I went for plan B. Time to hack the NFL. Here’s how I did it with the help of Boxee’s new Boxee TV product.

I have a Boxee TV in my USV office which gets all the broadcast channels in NYC in HD. Via the Boxee TV’s cloud service, I can get all of those channels on my laptop anywhere I am. So I was able to get the three football games yesterday on my laptop.

We also happen to have an AppleTV in our beach house. So with airplay mirroring from my laptop to the AppleTV, I was able to get the games from my laptop to the big screen in our family room at the beach.

Here’s how it looked from the warmth and comfort of the family room couch yesterday afternoon as the Gotham Gal and her sister Susan were cooking up a storm in the kitchen:

This all worked out great until the Jets played the Patriots last night. That was awful to watch. I turned it off at halftime. I am embarassed to be a Jet fan this morning.

The post Why I Love Boxee TV appeared first on The Faster Times.

I’m of the opinion that four years of writing taxpayer-funded fucking welfare checks and spending trillions on unemployment benefits was the dumbest possible thing on earth when you consider the state of the nation’s crumbling infrastructure and the social benefits inherent in putting people to work rather than keeping them in a perpetual state of begging.

I don’t care what the extremist nutjobs on the right or the left think about government-led public works projects or the “guaranteed” social safety net, respectively. I know deep down that people do want to work in general and that America would be doing better had the administration been more forceful and creative and had the GOP opposition stopped being such dicks about everything.

For example, just imagine if Congress and the President had mobilized a natural gas vehicle infrastructure project including transmission, service stations, engine science, cleaner fracking research, etc. America is the Saudi Arabia of natural gas with something like a 100-year supply based on reported reserves. We could have had an explosion in jobs and private investment to go along with something like that. And that’s one example of many things that only the government can set into motion so that companies and entrepreneurs are jumpstarted into motion.

But the President was a pussy who blew his mandate on health care and the obstructionist GOP-ers in Congress are regressive rednecks kowtowing to the economic innumerates in their Tea Party constituencies.

And so here we are, with very little happening in the way of productive projects for the benefit of all Americans.

Which brings me to Hurricane Sandy…

I threw out all of the contents of two refrigerators and freezers yesterday as did two million other homeowners without power this week. We’ll be replacing all of it once the juice comes back on. We’ll also see a massive new market for home generators in this storm’s aftermath along with continued runs on Home Depot and Lowe’s as people seek to put their property back together. And now we’re hearing estimates for public repairs that are astronomical ($20 billion just for NYC’s subways, for example). Much of this spending goes toward overtime for workers, parts and equipment from American manufacturers and all kinds of local construction involvement.

It ain’t ideal, but it’s still paid work and productive spending.

But is the Sandy clean-up really going to beneficial to the economy, net net? I’m not sure I have an answer. Here are some takes on the topic worth reading:

The post Can Hurricane Sandy Save the Economy? appeared first on The Faster Times.

I ended yesterday’s post with this:

Hurricane Sandy looks to be coming through NYC at that time and I don’t know what that may cause me and my family to be doing at that time. We live right on the Hudson, at the border of Zone A. So I’ve got a few things on my mind today that fit right into this Sustainability theme….

Stay safe everyone on the east coast today. Let’s hope the hype is overblown. And let’s prepare as if it isn’t.

On my way back from a business breakfast, I saw folks in Hudson River Park looking at the Hudson River so I walked over and recorded this video of the Hudson breaching its banks around 10am eastern.

That was the moment I knew that our street would turn into a lake. I just felt it in my gut. Around that time my partner Albert posted this on his tumblr. We traded a few comments and he led me to this page on NOAA’s website. This was the chart I was tracking all day yesterday:

At the time I took that video the water height on this chart was around eight feet. You can see that it peaked at about 14.5 feet. That’s 6.5 feet higher than the time of my video.

After our monday team meeting (which we did on Google Hangouts with great success), I went downstairs and explained to the Gotham Gal and Josh that we should evacuate. I got a little pushback from both but mostly from Josh who thought we could ride out the storm in our apartment.

I was adamant that we should leave. I told them that our street was going to become a lake (or worse a river) and that we would lose power and things would be a mess. I finally won them over and we headed out around 4pm. We went uptown to stay at a friend’s house on higher ground. Before we left, the Gotham Gal and I went to the basement storage room and removed all family heirlooms and anything we couldn’t replace easily and took them upstairs to our apartment. But we forgot to empty the ice makers in our apartment (which caused me to wake up in the middle of the night last night with an “oh shit” moment).

We spent the rest of the day following events on Twitter and TV. The Mayor’s regular updates on TV were helpful, but by far the best coverage of Sandy was on Twitter, with links out to blogs and Instagram. That led me to tweet this out yesterday night.

@fredwilson

Twitter owns times like this. Images, important news, quotes, videos, and lots of humor #sandy

Our street in the west village did in fact become a lake with somewhere around 5 feet of water at the height of the storm surge. Our building’s basement was submerged and our ground floor apartment which houses the Gotham Gal’s office took many feet of water. The building lost power and I suspect it won’t have it back for a while. It was a disaster from which we will be impacted for months I suspect.

But as bad as our street and building had it, much of NYC had it worse. Lower Manhattan and parts of Brooklyn were flooded way worse than the west village. The subway system took the most severe flooding of anytime in its history. Many of the subway tunnels between Manhattan and Bronx, Queens, and Brooklyn are flooded. And some of the automobile tunnels are flooded too. There have been power plant explosions, fires, and all sorts of other Sandy related calamaties.

It was a big storm and it wreaked much damage on NYC last night. But the loss of life was relatively low and from what I can tell, city officials and the first responders in the fire and police department did their usual heroic job. We will get through this the same way we have gotten through other disasters.

I may take the week off. I have a lot to tend to on the home front and NYC is not going to be the easiest place to live and work this week. My son’s school is almost certainly closed for the next few days.

But I’ll likely keep blogging. It helps to be able to talk about this stuff, to get it out, and to discuss it. So we can start doing that while my family and I start digging out.

The post Hurricane Sandy: When My Street Turned Into a Lake appeared first on The Faster Times.

“By the time they have been retired for two years, 78 percent of former NFL players have gone bankrupt or are under financial stress; within five years of retirement, an estimated 60 percent of former NBA players are broke.” - Sports Illustrated

Last night it seemed like the whole entire world was watching the ESPN show 30 for 30, which tackled the topic of pro athletes who have gone broke or filed for bankruptcy. I know some financial advisors who deal with NFL players, new and old and former. In many cases, they almost have to take on a parental role, especially as they get drafted out of college and can’t wait to go down to Myrtle Beach to get some dumbass slogan tattooed across their chest or whatever. There are calls at 2 in the morning about transferring money from one account to another, heavy-duty scoldings about jewelry purchases and frank discussions about how many cars a person actually needs to own at the same time.

Anyway, if you catch the ESPN doc, it was pretty amazing, if only for the sheer ubiquity of broke athletes – even star players with long careers who’ve made more than $30 million aren’t immune.

What happens to these guys is pretty obvious, it always seems like the same story, involving one or some of the below components:

1. Athlete overstimates the length of what his playing career will be. Then gets released or has a dire injury.

2. Athlete allows four or five of his boys from the neighborhood become a freeloading entourage. Once the money’s gone, so are his friends.

3. Athlete mistakenly assumes that success on the field guarantees success in the business world, buys car dealerships, car washes, restaurants, night clubs and backs his idiot family and friends in their own half-baked ventures.

4. Athlete signs over power of attorney to a scumbag or an incompetent because he just doesn’t feel like “dealing with this shit” and by “shit” he means his own future. Scumbag abuses trust and steals, swindles or loses the money in ill-conceived investments.

5. Athlete signs away rights and royalties to unscrupulous agents, managers, promoters early in his career when trinkets and a small amount of money dazzle him. Later, he finds out what he’s given up once it’s too late.

6. Lawsuits, divorces, child support, alimony and illness strike – huge expenses that were inconceivable to the 23-year-old who was nailing chicks three at a time in a hot tub ten years earlier.

Anyway, these are the typical pitfalls and 99 times out of 100 the broke athlete has made at least one of these mistakes. I’m not sure that it can ever be prevented given the de-emphasis on education our colleges are guilty of when it comes to their athletes. After all, colleges are businesses that cater to the check-writing alumni and the only thing the alumni care about is winning football and basketball games. The athletes are kept in the dark rather than taught the basics and many of them have grown up in an environment where money management just isn’t a topic of discussion.

So expect more of this.

More about ‘Broke’ on 30 for 30 here: ESPN

The post Why NFL Players Go Broke appeared first on The Faster Times.