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The only fitting theme for the 162nd Carnival of Personal Finance is baseball. After all, each team plays 162 games in a season. And while we understand that equating professional athletes with sound personal finance habits can be a bit like equating politicians with unassailable honesty, we press on, nonetheless. We’re very excited to be hosting, and we hope you enjoy this collection from 74 of the very best personal finance blogs. Batter up!
Baseball teams have to watch their money, just like you do (well, sort of). After all, if the team spends too much, the league slaps them with a luxury tax. Of course, the owners who are willing to break the luxury tax threshold probably can afford to pay the extra tax anyway, but that’s a different story.
Free From Broke wrote a blog describing “Five Ways Fantasy Baseball Is Like Personal Finance.” One of the ways: “There’s no one approach to winning.
Baseball teams are constantly in search of quality investments. They’re looking for the next great young player that they can sign to a long-term deal. They’re looking for that washed-up player who can give them one more great year at a cut-rate price. And, of course, they’re looking for you to invest yourself — emotionally and financially — in your favorite team.
Countless baseball executives have asked themselves, “How much can I afford to spend on Player A to keep him from becoming a free agent?” or “Now that I’ve spent all this money on this slugging outfielder, do I have the money to pay for this ace relief pitcher?” Some teams — I’m looking at you, Yankees and Red Sox — can bust their budgets regularly. Others are bound to them the same way you are.
Saving doesn’t have too much of a place in pro sports. When it happens, it’s usually because a financially strapped team is trying to save enough money to offer a huge contract to a marquee free-agent player. Problem with that is that often the player doesn’t come, and then the team has suffered through a few seasons of low-cost, losing baseball for nothing.
The New York Yankees don’t have to be frugal, but teams in smaller cities don’t make nearly as much money from TV and ticket sales and have to watch their pennies. Small payrolls make it much tougher to win consistently — after all, the best players go where they can make the most money. However, frugal and astute management has helped some teams, like the Oakland A’s and Minnesota Twins, stay near the top of the standings each year with smaller payrolls.
Some big earners forget the fact that they are not exempt from taxes. Case in point: Brewers star Prince Fielder, who reportedly owes more than $400,000 in back taxes. No matter how much money you make, it’s never fun to have the IRS on your trail.
While baseball players are paid a fortune these days, the riches don’t always last. Just look at Denny McLain. Or even better, Dave Carley, who played professional baseball with the Milwaukee Brewers. He had to quit due to a shoulder injury, and after that job loss and an unexpected divorce, Carley racked up heavy credit card debt. He eventually got back on his feet, and in January 2007 started a non-profit organization that helps people with financial problems set up budgets. That guy should definitely get some credit!
How would you feel if millions of people could review your job performance every single day? A baseball player’s a hero after he hits the game-winning home run, but he can be depicted as the worst guy ever when he has committed the error that lost his team the big game. Next time you screw up your finances, just think how much worse you would’ve felt if every newspaper and blog site in the nation wrote about it.
Baseball teams spend a fortune on their real estate, the ballpark. Granted, it’s usually taxpayer money that they use to build their shiny new homes, but it’s a lot of money either way.
Did you know that the IRS can charge you a truckload of taxes if you catch a home run ball at a game? They certainly can if the ball was hit to break the game’s all-time home run record.
There was a time when baseball was a side job, not a life-changing jackpot. For example, in the early 20th century, players often worked extra jobs — even during the season — because their salary just wasn’t enough to help them get by, much less retire early. It’s hard to fathom now, in the time of the $275 million contract.
Like any business, baseball is buoyed by a strong economy and deflated somewhat by a weak one. After all, if you’re nervous about your job or shell-shocked by oil prices, you’re a whole lot less likely to dish out $200 for tickets, parking, hot dogs, Cokes and a program.
That’s it for this week’s Carnival of Personal Finance. If your article was included, please remember to link back. Thanks for reading — we hope you’ll come back and visit us at Taking Charge!