Scott Eyre is "broke".

[JohnBriggs12]

Yahoo Sports is reporting that Scott Eyre is among several major leaguers with huge sums of money frozen with the assets of Stanford Financial, the company being investigated for fraud. According to the article, Eyre is down to $13 cash on hand as all his money is tied up there. Mike Pelfrey, Xavier Nady, and Johnny Damon are the other baseball players mentioned. The situation "is the talk of clubhouses across Arizona and Florida".

 

I started a thread in off topics list last week but as this is directly affecting major leaguers, it probably should be here.

[JoeHova]

I'm sure their teams would advance those guys some salary until their assets are unfrozen. The Knicks advanced Eddy Curry a couple million earlier this year so he could pay off some of his bills. Or failing an advance, they know a lot of rich guys who could maybe loan them some money for awhile.

[monty57]

It's a shame, and I hope all of the principals in these fraudulent "financial firms" spend a lot of years behind bars.

 

That said, as a bit of unsolicited brotherly advice, everyone (whether you're a millionaire or someone working minimum wage) should keep 3-6 months worth of bills in a "safe" account (savings, CD, etc). That can be a big help if you lose your job, have a health concern, or in cases like this, get caught up in a scam.

[fondybrewfan]

If you are a millionaire their is really no reason to have all your eggs in one basket. Eyre and all players should have accounts at multiple banks. It is just a logical risk strategy.

[endaround]

I'm sure their teams would advance those guys some salary until their assets are unfrozen. The Knicks advanced Eddy Curry a couple million earlier this year so he could pay off some of his bills. Or failing an advance, they know a lot of rich guys who could maybe loan them some money for awhile.

 

There are unlikely any assets there to be unfrozen.

[bklynbrewcrew]

I feel bad for these baseball players but it is utter stupidity to have all your money with one investment firm.

[JohnBriggs12]

If you are a millionaire their is really no reason to have all your eggs in one basket. Eyre and all players should have accounts at multiple banks. It is just a logical risk strategy.

That's good advice for all of us FDF, not just millionaires. Athletes are particularly susceptible. Outwardly this Stanford Financial had all the trappings of success. They were heavily involved in sports sponsorships and charities. This probably made them attractive in the sports world. The key was they were selling unrealistic returns not unlike what sports agents do. It is hard to believe that guys would not have a secondary account somewhere though.

[PKBadger]

"I'm down to the last 13 bucks in my wallet!"

 

Yeah, that and the credit cards with $50,000 limits. Those aren't frozen (or shouldn't be, at least). Should be enough to buy groceries and even make a mortgage payment, assuming that your house is not made of solid gold like Chester J. Lampwick.

[JJHardy7]

Yeah, that and the credit cards with $50,000 limits. Those aren't frozen (or shouldn't be, at least). Should be enough to buy groceries and even make a mortgage payment, assuming that your house is not made of solid gold like Chester J. Lampwick.

 

I'm pretty sure you can't use credit cards to pay a mortgage. This player wasn't smart. I guess I don't get how these guys don't have a financial guy that pretty much takes care of all this for them.

[MJLiverock]

It isn't a big deal to have all your investments with one firm, it is a big deal to have all of your investments in one fund or one asset class. Or as many people find, a million funds that all invest in the exact same thing which is something banks and brokers love to do with unsuspecting people. I have a friend who showed me his Roth IRA with about $40,000 in it and his Wachovia broker had 30 different mutual funds in it. Needless to say the objectives and holdings of many of these funds were so similar he would have been better off owning about 4 and paying a whole lot less in transaction fees and managment costs.

 

Stanford invested clients money in illiuquid assets like real estate or complicated deriviatives which have been unsurprisingly hard to sell. I still remember how many people told me in 2002 they wanted out of the market so they could buy real state because..."you never lose money in real estate." Never mind the illiquidity and difficult to value aspect of real estate. Just wait until all the pension funds start taking the write downs of their hard to value timber, real estate, private equity, and hedge funds that held illiquid assets. Most of these illiquid assets have been overvalued significantly and nobody wants to mark them down to the true value. I have already met with pension trustees talking about year end statements and saying how some of these asset classes held their value relative to the stock market, but what they are missing is that valuation is just a made up number not the true valuation of the underlying asset if it was sold today.

[Point Beer Is Best]

Yeah, that and the credit cards with $50,000 limits. Those aren't frozen (or shouldn't be, at least).

I thought I had read somewhere that one of the Yankees (Nady, maybe?) was looking for an apartment and they wouldn't accept his card knowing his assets were frozen, so he'll essentially be homeless - at least in NY - once camp breaks.

[JoeHova]

There are unlikely any assets there to be unfrozen.

 

Possibly not, but once their checks start coming in, they'll be fine in terms of paying the rent/mortgage. It's only during spring training where they have to worry. Even on the minimum salary, you're talking $25,000 every two weeks after taxes.

[PKBadger]

Yeah, that and the credit cards with $50,000 limits. Those aren't frozen (or shouldn't be, at least). Should be enough to buy groceries and even make a mortgage payment, assuming that your house is not made of solid gold like Chester J. Lampwick.

 

I'm pretty sure you can't use credit cards to pay a mortgage. This player wasn't smart. I guess I don't get how these guys don't have a financial guy that pretty much takes care of all this for them.

 

It depends, I suppose. I'm a renter (never been a home-owner) and I'm able to pay rent to my building's management company online using a credit card. Then again, I've also rented from companies that only accepted checks. No clue how mortgage companies handle that stuff.

 

But there's always the ability to get cash advances from your credit card company....I get junk mail from AmEx constantly, imploring me to do so....and it's a pretty sizable amount that they're willing to extend me for some godforsaken reason.

 

I was just trying to point out how the media is sensationalizing this whole ordeal.

[PeaveyFury]

I'm puzzled by one question- How does he not have at least SOMETHING at a bank? He doesn't have a debit card or write checks?

[ILuvDaBush]

Who was the Cub who drove his Winnebago to spring training last year?

[tnweill]

I'm pretty sure it was Eyre who drove his camper to spring training last year. I just thinking about that too.

 

As for paying mortgages w/credit cards, I have the option of paying mine w/any of my credit cards that I have w/the same financial institution. Which kind of makes sense from their standpoint if you think about it.

[Roderick]

I'm pretty sure you can't use credit cards to pay a mortgage.

Well then just use the checks that the credit card companies give you to use. You just end up paying the advance fee.

 

Obviously the player wasn't smart for putting all his eggs in one basket.

[JJHardy7]

It depends, I suppose. I'm a renter (never been a home-owner) and I'm able to pay rent to my building's management company online using a credit card. Then again, I've also rented from companies that only accepted checks. No clue how mortgage companies handle that stuff.

 

But there's always the ability to get cash advances from your credit card company....I get junk mail from AmEx constantly, imploring me to do so....and it's a pretty sizable amount that they're willing to extend me for some godforsaken reason.

 

I was just trying to point out how the media is sensationalizing this whole ordeal.

 

There are ways to to it I suppose with the checks that credit card companies give and as another poster pointed out at certain places you can. I wish it was more common...that would be a lot of bonus points! I know it's rare that places accept a credit card (and avoid paying any advance fee).

[joepepsi]

I should be so lucky to have his problems. This is just another example of the rich being completely out of touch with how real people live their lives. When he says he only has $13 in his pocket he doesn't mean he's broke. When I say I only have $13 in my pocket it often means that's all I got until payday.

 

Eyre is signed to a $2 million major league contract. Even if he's cut before opening day, the Phillies will still owe him a few hundred thousands bucks for Spring Training. He could go into any federally insured bank in the country and get line of credit loan or some sort term deal for a few hundred grand to "tide him over", though his "difficult time".

 

You'll be fine, Scott. Sheesh!

[Thurston Fluff]

I'm pretty sure you can't use credit cards to pay a mortgage.

 

We used to use a credit card every month for our mortgage payment. We put everything on a card and pay it off at the end of the month. It gave us interest free money to the end of the month and the perk miles build up enough to fly free every year or so.

[monty57]

I should be so lucky to have his problems. This is just another example of the rich being completely out of touch with how real people live their lives. When he says he only has $13 in his pocket he doesn't mean he's broke. When I say I only have $13 in my pocket it often means that's all I got until payday.

 

Eyre is signed to a $2 million major league contract. Even if he's cut before opening day, the Phillies will still owe him a few hundred thousands bucks for Spring Training. He could go into any federally insured bank in the country and get line of credit loan or some sort term deal for a few hundred grand to "tide him over", though his "difficult time".

 

You'll be fine, Scott. Sheesh!

That really depends upon his liabilities. Many athletes have much of their money spent before they get it, through mortgage payments, credit cards, etc. It's likely that he's now is a situation with a lot of liabilities and no assets. Even with a high expected income stream, he may not be able to get a loan. Regardless, he tried to be prudent with his money, hiring what he thought was a reputable firm to handle his finances, and through no fault of his own, is now in a tough situation. Whether he makes a lot of money or not, it's hard to rip on someone who's lost everything he worked hard for. Also, athletes are in a unique situation, in that they receive most of their money early in life, and then have relatively no marketable abilities after their physical talents fade, so they cannot earn much after their career is over. Eyre tried to do right and then lose everything to fraud. His liabilities could well be more than he'll make over the remainder of his career, so he could well have to go to work at a "normal job" when his playing days are done. Normally, I wouldn't care if someone lost everything due to their own bad habits, but I feel for Eyre because he didn't do anything wrong, and will suffer nonetheless.

 

I'm puzzled by one question- How does he not have at least SOMETHING at a bank? He doesn't have a debit card or write checks?

I don't know if this is the case or not, but many wealthy people use trust services to handle their finances. In other words, they don't pay any of their own bills, they have an account, and a trustee who pays all of their bills from this account. As I posted earlier, he should have set some money aside, but most likely felt he was doing the right thing.

[JJHardy7]

We used to use a credit card every month for our mortgage payment. We put everything on a card and pay it off at the end of the month. It gave us interest free money to the end of the month and the perk miles build up enough to fly free every year or so.

 

Was your mortgage through the same company as the card? It's rare for this to happen and it's a good thing if it's an option. I'd love to be able to gain credit card points/rewards through this.

[Thurston Fluff]

To be perfectly honest I don't remember if it was or not. It's been a few years since our mortgage was paid off. IIRC we had the card deposit money automatically in our account then had it auto paid out to the mortgage company so it might not have been a direct payment from card to company. If it was direct then it was from a statement that allowed you to give them the number for future autopays from that source.

[Loopee]

I'm sure Eyre will be able to survive with the income stream he has, even with extensive liabilities, cash flow (income) is king in today's lending environment.

 

I don't think we should be overly harsh on him for not diversifying his assets; we as a society provide absolutely no financial education to non-business majors. This guy's focus has been sports...it makes sense that he'd trust his assets to a "professional" money manager. We really need to do more to teach everyone about basic tenets of finacial stability (diversification).