Associated Press reported in "Ex-Detroit Lions lineman Luther Elliss files for bankruptcy, citing 'bad choices'" on January 19, 2010 that retired Detroit Lions defensive lineman abandoned his million-dollar suburban Detroit home after being forced to file bankruptcy from failed investments and debt. At age 36, the former defensive lineman, who earned almost $11.6 million from 2000-04, relied on churches and friends to pay bills. His savings were depleted, and he and his wife filed Chapter 7 bankruptcy. He had 11 children. After retirement, he invested in several business ventures, including a manufacturing company which closed, Internet businesses, and expensive homes. At the time he filed bankruptcy, the former lineman, with no college degree, worked for an insurance company, netting $1,799 a month. Professional athletes are inundated with investment pitches. Overspending, greed, and high salaries can make money disappear for anyone. To stay away from bankruptcy and leave money for family or the future, a person should research all investments and not overspend when times are good. A person can be easily persuaded wrongly to change an investment choice by someone telling the investor s/he will earn 1% more if s/he's too set on greed. A person who has always been employed will not realize that being unemployed is a possibility after reaching a certain age or when the economy limps along with no jobs. The brain tends to organize information in a way that leads to judgment errors in finances. Often times, people make bad investments when they are too quick to decide and their brain chemistry requires immediate satisfaction. People want immediate gratification so they can avoid pain or celebrate joy. People who lose money tend to be overconfident on their knowledge. Traders who frequently trade are overconfident and end up with underperforming results. They hold on to poor performing stock because they do not want to give up on the chance it will go up. When people overestimate skill, they make financial errors that put them into bankruptcy. Once someone loses, s/he psychologically weighs losses more heavily than gains. Even though many good things happen to people in life, like the former lineman being a first draft pick, they end up focusing on the bad. When a person makes a bad investment decision, s/he should accept a temporary loss to redeploy capital. Sophisticated people end up in bankruptcy because they take on more risk to avoid a loss. The loss becomes more significant than the risk. To stay away from bad investment choices that lead to bankruptcy in California, do not let behavior take over. The human mind seeks patterns even when the return on investments is random. Rinne Legal, with staff able to translate in Spanish, Korean, Russian, German, helps individuals and small businesses with bankruptcies and living trusts in Contra Costa, Sacramento, San Francisco, and Solano Counties. Rinne Legal has offices in Walnut Creek, Fairfield, and Sacramento. Contact Rinne Legal for a free consultation. These blog posts are for informational purposes and not intended nor should be construed as legal advice. These blog posts may be considered attorney advertising in some states. Prior results described on blog posts do not guarantee similar outcomes in future cases. There is no intent to create an attorney-client privilege or relationship with anyone accessing information on this blog. Authors posting on this blog are not obligated to reply to any emails seeking legal advice. The information contained on this blog is not intended to be a solicitation.
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