Should You Pay Off Student Loans Before Investing?

Millennials who have been out of college for a few years are starting to wonder if they should start investing before they’ve paid off their student loans. There is no one-size-fits-all answer to this question, but each person should be able find the best path forward.

Investment and debt-repayment are two sides of the same coin. Most people with student loan debt pay interest and annual fees totalling 4-6% of the balance of their loans. This is in addition to the premium payments made every month. This percentage is a loan’s APR, and it is an immovable object. Unless you look into student loan refinancing, this APR represents the annual cost of the money you borrowed for your graduation. This rate will stay the same for the entire term of your loan.

Investment portfolios bring in returns that vary year by year. If the economy is active and healthy, you could see returns of 7-9% or even more. Some years see investors receiving enormous returns that far exceed 10%. The thing is, these returns are unpredictable. Unlike your student loan APR which never changes, investment returns go all over the place. Some years, your portfolio may even lose money.

In years where your investment return percentage exceeds your loan APR, you will make more money than you lose, making investment a worthy pursuit, even if you haven’t paid off your student loans yet. But on years where your portfolio brings in less money than you lose in student loan interest payments, your investments won’t be “worth it” in a way that is easy to appreciate.

However, investing has one advantage that makes this decision a little more complicated than subtracting interest payments from investment returns. When people start investing at an early age, compound interest kicks in earlier, greatly amplifying the overall growth potential of your investments over your lifetime.

Most readers will already be familiar with this concept, but it’s worth a review. If you make regular payments into an investment account for your whole life without withdrawing funds, the dividends that your portfolio earns will also be added to the pot. In this way, a successful investment pays into itself. This creates a snowball effect. As time goes on, you’ve got more money, so it grows faster, so it gives off higher returns, which makes your money, which can then grow faster, etc.

With compound interest, the sooner you begin the better. Therefore, a lot of advisors consider it prudent to start investing as soon as possible, even if the return you expect from your investment is nearly equal to your student loan APR.

However, you shouldn’t begin investing if you don’t have certain financial details worked out. If you have no savings to cover you if you lost your job or experienced a personal emergency, you shouldn’t put aside money to invest. Instead, create an emergency fund. You may also have personal preferences that motivate you to pay off your student loans as soon as possible. Some people find a lot of personal comfort in being debt free, and may invest with more fervor once the debt is cancelled. Finally, explore investment acceleration options, like employer matched 401(k)s.

Hopefully this has given you a clear way of figuring out how to prioritize your investments and student loan repayment. Simply giving these concepts clever consideration indicates that you are careful about your money, a trait which will serve you well for life, long after your student loans are paid off.

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source: modestmoney.com

Google stock hits new high as mobile bets pay off

Google Inc shares jumped to an all-time high above $1000 after the search engine giant reported a surge in mobile and video advertising that helped drive quarterly revenue up 23 percent.

At least 16 brokerages raised their price targets on the stock to between $880 and $1,220, with Deutsche Bank bumping up its target price by 26 percent.

The shares rose 13 percent to $1007.40 after the opening bell on the Nasdaq, before easing back a few dollars.

Google said paid clicks increased by a quarter in the three months ended September 30, from a year earlier, the highest rate of growth in the past year.

This offset an 8 percent fall in average cost-per-click, the price advertisers pay Google when consumers click on their ads.

“We view solid paid clicks growth to be a good indicator of demand, driven by the continued shift to mobile,” J.P. Morgan analysts said. They had expected 21.5 percent growth.

In contrast, analysts say Yahoo, which this week reported a tepid quarter, has lost market share in display and search advertising in the face of strong competition from Facebook Inc and Google.

Google shares have climbed 38 percent this year, rewarding investors such as Fidelity Investments’ $101 billion Contrafund.

Contrafund added to its stake in Google in the third quarter and got a big lift from the surging performance of Facebook and Tesla Motors Inc as well. The fund, managed by star stock picker Will Danoff, returned 8.94 percent in the third quarter, easily beating the 5.24 percent advance of the S&P 500 Index.

Facebook is expected to report its third-quarter results on October 30.

To counter declines in cost-per-click rates, Google rolled out in February a service to help advertisers market through a mix of smartphones, tablets and desktops.

The J.P. Morgan analysts said this drive was a major opportunity for Google in the upcoming holiday season.

Analysts also highlighted Google’s ability to generate revenue from its video-streaming website, YouTube.

YouTube branded video-ads grew more than 75 percent in the quarter, from a year earlier, with 40 percent of traffic now coming from mobile devices.

“We estimate that Google’s key YouTube asset generated approximately $4 billion in revenue in 2012, positioning Google extremely well for the strong growth in video advertising,” RBC Capital Markets analysts wrote in a note.

Analysts at Jefferies said Google is best positioned to benefit in mobile with one billion Android activations. The company sells applications and content through its Google Play Store.

The Mountain View, California-based company – known for its Google Maps service, Chrome browser and Nexus line of smartphones and tablets – reported a 32 percent jump in revenue from the rest of world (excluding UK) during the quarter with growth coming from Japan, South Korea and Australia.

” is an encouraging bright spot. Google should be a good play off any European and Emerging Markets recovery,” analysts at RBC Capital markets said.

“We think the worst is behind Google from a sentiment perspective,” Deutsche Bank analysts said.

source: interaksyon.com

Bourse sets sights on Japanese investors

MANILA - The Philippine Stock Exchange (PSE) is eyeing more Japanese investors in the local stock market.

In a statement, the local bourse said it forged a partnership with Takara Printing Co Ltd to drum up interest in the PSE among companies, investors and other market participants in Japan.

"This agreement will strengthen collaboration between companies to allow the sharing of information about listing in the PSE and to enhance investor relations activities and marketing initiatives in both the Philippines and Japan," the PSE said.

Last February, Takara Printing translated the PSE’s listing kit and new listing rules to Japanese. The bourse saw the need for a Japanese-translated listing manual as more Japanese firms set up shop in the Philippines given the country’s sound economic performance.

The Philippine economy grew 7.6 percent in the first half, bucking the slowdown of its regional peers.

Efforts to boost investments from Japan also came after ratings agencies Fitch Ratings and Standard & Poor's rewarded the Philippines with investment grade early this year.

The country's investment score will enable Japanese investors, who invest mostly in investment-grade assets, to buy Philippine equities, Hans B. Sicat, PSE president and chief executive officer, said in a previous interview.

source: interaksyon.com

Asian stocks hit three-month highs, oil slides

SYDNEY - Fresh signs of global economic stability drove Asian stocks to a three-month high on Tuesday as investors turned their attention to more data out of China, while oil nursed heavy losses as fears of an imminent U.S. military strike against Syria receded even further.



Russia on Monday proposed to work with Damascus to put its chemical weapons under international control, a move that President Barack Obama said could be "potentially positive".



Benchmark Brent oil prices fell 0.8 percent to $112.85 in early Asian trade, extending Monday's 2.1 percent slide. Lower oil prices are usually a positive development for Asia, a region that relies heavily on imports for its energy needs.



MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.4 percent, extending Monday's 1.3 percent gain to reach highs not seen since early June.



Tokyo's Nikkei climbed 0.8 percent, adding to Monday's 2.5 percent rally on euphoria that Tokyo has won the rights to host the 2020 Olympic Games.



China's trade and inflation data this week have pleased investors and the market is hopeful that industrial output and retail sales will provide more evidence the world's second biggest economy has averted a sharp slowdown.



A recent run of upbeat factory activity data from China, Europe and the United States further underlined that the global economy was on a firmer footing.



In a slight twist to this narrative, however, market sentiment, particularly for emerging markets, found further support after disappointing U.S. jobs data on Friday raised doubts about whether the Federal Reserve can scale back stimulus in any significant way next week.



A Reuters poll on Monday showed economists generally expect the Fed to announce a reduction in its massive $85 billion monthly bond-buying program by a very modest $10 billion.



Such an outcome should be good news for emerging markets, which have suffered from an outflow of funds as investors positioned for a world with less easy money from major central banks.



On Monday, Thai stocks boasted gains of 3.6 percent, while Indonesia rose 2.9 percent. That spread to Latin American markets overnight.



The MSCI emerging equities index advanced 1.9 percent to a three-month high on Monday and has rallied more than 4 percent in the last four trading sessions.



"There is no denying that the market backdrop for now is more supportive, especially if you also consider the strong data coming from China. But I am afraid what we are currently observing is a just a short-term bounce," said Benoit Anne, strategist at Societe Generale.



"I don't buy the argument that the global emerging market correction is over. Outflows have been robust over the past few weeks and are showing no signs of reversal. But at the same time, positioning in local debt markets remains rather elevated. This to me suggests that there is more pain to come."



The disappointing U.S. jobs data has cast a long shadow on the dollar, which fell further on Monday as investors continued to cut bullish positions.



Adding to the uncertainty, San Francisco Federal Reserve Bank President John Williams said on Monday he hasn't made up his mind yet over whether to support a reduction in the Fed bond purchases.



The dollar wallowed at a 1-1/2 week low against a basket of major currencies, having fallen 1 percent since Friday.



That helped the euro recover from last week's selloff sparked by dovish comments from the European Central Bank. The common currency last traded at $1.3254, having hit a 1-1/2 week high of $1.3281 on Monday.



The greenback fared better against the yen, which sagged on Monday as the Nikkei rallied. The Japanese currency has tended to move inversely to the Nikkei this year.



The dollar fetched 99.68 yen, down from a pre-jobs data high of 100.24 on Friday.



Analysts at BNP Paribas said it was too early to turn bearish on the dollar. "This is more of a temporary setback than a game changer for USD bulls," they wrote in a note.



They cited Fed tapering risk, the chance of U.S. data surprising to the upside and the possibility of Larry Summers being nominated for the Fed Chairman position as dollar positive factors.



Copper, benefiting from growing optimism over China, was steady at $7,205 a ton, having climbed from last week's trough of $7,082.

source: interaksyon.com

Job-creating foreign investments up more than a tenth in 1H

Foreigners pulled out more money than they invested in job-generating businesses at the close of the first half of the year, data released today by the Bangko Sentral ng Pilipinas (BSP) showed.

In a report, the BSP said the country suffered from $61 million in net outflows of foreign direct investments (FDI) last June, a reversal of the $307 million net inflows in the same month last year.

Despite the net pullout of investments last June, the country still enjoyed net inflows of $2.2 billion in the first six months of the year. This was 10.9 percent more than the nearly $2 billion in net inflows in the same six-month period last year.

In June alone, all categories of FDI registered weaker growth, if not contracted altogether. Equity capital reversed to net outflows of $193 million from last year's net inflows of $78 million.


Reinvested earnings fell sharply from $123 million in June last year to $59 million in the same month this year. Likewise, loans that foreign companies granted their local subsidiaries or affiliates fell from $106 million in 2012 to $72 million this year.

The government has been counting on the country's credit rating upgrade to fuel inflows of brick-and-mortar investments. Two of the world's three major rating firms lifted the Philippines to investment grade.

Fitch was the first to upgrade the Philippines, followed by Standard and Poor's, leaving Moody's as the only rating firm that has yet to deliver an increase in the country's debt score. Investment grade confers lower borrowing costs for a country, thus leaving it more resources to finance economic growth.

source: interaksyon.com

Unease over US Fed leaves global markets at one-month low

LONDON - World shares sank to their lowest level in more than a month on Tuesday as unease about an expected cut in U.S. stimulus and a related rise in bond yields left markets on edge.

Europe's main stock markets opened down 1 percent following a fourth straight day of falls on both Wall Street and in Asia to leave MSCI's global index, which tracks shares in 45 countries, at its lowest level since July 12.

Wednesday's minutes from the most recent Fed meeting could offer fresh hints on when the U.S. central bank will start winding down its $85 billion-a-month support program, a tricky process markets have been nervous about for months.

The uncertainty has broadly driven up bond market borrowing costs in recent weeks. The upward pressure on U.S. government bonds eased overnight, leaving the benchmark 10-year Treasury just off a 2-year high at 2.83 percent.

As has been the recent pattern, German government bonds, Europe's equivalent benchmark, moved in lockstep with yields edging down to 1.879 percent having topped 1.9 percent on Monday.

On European share markets, a 10.8 percent jump to 19.38 points in the Euro STOXX 50 Volatility Index .V2TX indicated uncertainty over the near-term outlook, though the measure remained below its 2013 peak of 26.80 points.

Ramin Nakisa, a global macro strategist for UBS in London, said market turbulence was bound to pick up as the Fed starts to switch the direction of its policy.

"We expect volatility... People will start to wonder whether there is anything in the fixed-income world that really is safe," he said adding that there was also likely to be another short selloff in share markets.

Emerging woes

The jitters about the U.S. moves continued to batter emerging markets where there are fears an end to cheap money and improvement outlooks in advanced economies could see a stampede of investment leaving already-strained markets.

Indonesia and India had another torrid session with their stock markets down 4 and 1 percent respectively as their currencies also continued to tumble.

Japan's Nikkei slumped too, falling 2.7 percent, reflecting the exposure of many Japanese companies to India and Indonesia.

"India's problems are nowhere near resolution because New Delhi has not done anything - there is no focus on improving productivity, infrastructure or getting FDI (foreign direct investment) back," said Nomura credit analyst Pradeep Mohinani in Hong Kong.

"It's all about stemming the flow of currency and that is not the cause of the problem."

Despite the focus on the Fed, the dollar was steady against a basket of major currencies. There was also little movement in the euro and sterling.

Emerging market volatility did spur the yen however. "The yen tends to attract buying when tensions in the market increase," said Satoshi Okagawa, senior global markets analyst for Sumitomo Mitsui Banking Corporation in Singapore.

In commodities, copper prices dropped to $7,264.75 per tonne, while gold eased to $1,361.66 per ounce after snapping a three-day winning streak on Monday and moving away from a two-month high hit that session.

Brent crude prices fell 0.5 percent to $109.36 a barrel, pressured by the Fed speculation but supported by the loss of Libya's oil exports as well as concerns that continuing unrest in Egypt could spread and interfere with supply.

source: interaksyon.com

Swedish investors keen on setting up Philippine manufacturing businesses

MANILA - Swedish investors are eyeing manufacturing projects in the Philippines, the Board of Investments (BOI) said on Monday.

The BOI recently hosted a Swedish business delegation, which included representatives from Atlas Copco, Celemi, Clean Motion, Comex International, Electrolux, Ericsson, Handelsbanken, Ikano, SEK, Tetra Pak, Volvo and the Swedish Foreign Trade Association.

“What is encouraging for us is the heightened interest of foreign investors in the Philippines. There is a solid stream of business missions coming in and we believe this is a vote of confidence in our government’s capacity to effect significant long-term structural and policy reforms,” Trade Undersecretary and BOI Managing Head Adrian S. Cristobal Jr. said in a statement.

During a trade and investments briefing, Swedish investors were encouraged to explore opportunities in agri-business, information technology-business process outsourcing (IT-BPO), public-private partnership (PPP) projects, renewable energy and tourism. “Strategic investments in these high-potential growth sectors, especially in manufacturing, generate employment opportunities and stimulate more development in the rural areas,” Cristobal said.

Swedish investments in the country from 2006 to September last year totaled P168.4 million.

“I believe that there is great potential for an increased bilateral dialogue between the Philippines and Sweden, and strengthened business and industrial relationships,” Eva Walder, head of the Swedish delegation and director general for trade of Sweden’s Ministry of Foreign Affairs, was quoted by the BOI as saying.

Swedish businessmen were also enjoined to source coffee, consumer jewelry, fresh fruits, giftware, home furnishings, organic foods, and processed fruits and marine products from the Philippines.

Last year, Sweden was the Philippines’ 34th-biggest trading partner, 32nd-largest export market and 35th source of imports with $161.48-million worth of trade.

Among the Swedish-led companies operating here are ABB Philippines, AstraZeneca, Ericsson Philippines, Lux Manufacturing, Magnitron Technology Philippines, SCA Hygiene Products and Swedish Match Philippines.

source: interaksyon.com

Former AIG chief exec, Philam Life in talks for non-life partnership

MANILA - The former CEO of American International Group (AIG) and the Philippine American Life and General Insurance Co (Philam Life) are eyeing a possible tie-up in the area of non-life insurance in the country.

Rex A. Mendoza, Philam Life president and chief executive, said former AIG chief executive Maurice Raymond “Hank” Greenberg was recently in the country for exploratory talks.

Greenberg is the president, chairman and chief executive of C.V. Starr & Co. Inc. (C.V. Starr), which has been scouting for possible investments in Manila, possibly a non-life insurance firm.

Mendoza said Philam Life cannot give up its non-life unit to the Starr Group.

"It is a composite license so we will have to partner. Because the capitalization is with us so we have to comply with the capitalization requirements," Mendoza told reporters today.

"It should be a partnership between his Starr Group of Companies and us but that is a decision that is made in Hong Kong, not here," Mendoza said, adding that the tie-up makes sense because they do not have not much of a non-life operation.

He said a partnership with the Starr Group may not pose any conflict since Philam Life has already cut off ties with AIG when the Philippine insurer was absorbed by AIA Group Ltd.

AIG spun off AIA when the former was selling assets to get itself out of debt at the height of the subprime crisis of 2008-2009. Mendoza said this makes AIA "completely" out of the control of AIG, the local non-life unit of which is Chartis.

"So we're not related in any way anymore. We can partner," he aid.

On top of this, the possible partnership with the Starr Group would be seamless as Greenberg is no stranegr to Philam Life, Mendoza said.

"The Philippines is very close to his heart. He knows the people here. In fact he was telling me he was in a hotel, a lot of people took pictures with him. He knows that the Philippines is a place he is known and well respected," Mendoza said.

Given a choice between China and the Philippines, Greenberg would opt for the latter since it is the relationship, rather than finances, that matter, Mendoza said.

Eyeing National Life

Mendoza couldn't say if Philam Life is moving to acquire beleaguered National Life Insurance Co.

He, however, said Philam "is in very good position" and that it is "capable" of strategic acquisitions.

Last November, National Life faced liquidation unless it infused P100 million into the company.  It needed to inject P404 million in the next four years, with the first tranche made in October 2011, but missed making the second capital infusion. To meet the government's minimum paid-up capital for insurance firms, National Life must put in P200 million in the next two years.

It has about P800-million worth of debts with BDO Unibank Inc, Philippine Business Bank, and three non-bank firms.

source: interaksyon.com

Baby J. Now Has a Net Worth!

Awww yeahhhhhh! Go Baby $ Go Baby $ Go! Or is he Baby J. now? I dunno… Either way, he’s a baby with over $3,000 to his name now! ;) He just opened up his first two financial accounts and I can tell by the way he’s looking at me now that he’s feeling pretty good about it, haha…

1st Account: Savings – $605.01

We had been collecting a few checks that people have sent over when he was born, and it only recently occurred to me that we couldn’t cash them! We have no accounts with the baby’s name on it, haha… Oops. It never crossed my mind until I sat down to deposit them (which is kinda weird, really). But we cleared that up real fast with a quick call to USAA, naturally, and 3 minutes later he had his first official account – Woohoo!

$350 of it came from my winnings of Ramit’s $1,000 Giveaway the other month (I was going to put it into Baby J’s college account, but decided to *match* it instead. Something I’m thinking of doing in the future when he’s old enough to start being taught about money :)), and the rest from friends and family. Not too bad for a 4-month old! That’s more than a lot of people keep in savings unfortunately :(

2nd Account: A College Savings 529 Plan – $2,500.00

I finally decided to make a decision one way or the other with saving for his college, and we went with our state’s 529 plan because they allow you to deduct up to $2,500 a year of what you put in! Which is FREE money right off the bat – making our decision much easier in the end :)

I had originally thought we’d just open one up with USAA so I could have everything in one spot which I thoroughly enjoy, but it turns out you have to do it with whatever financial institution the State has set it up with. Which unfortunately is not USAA… But that’s fine, the money saved with taxes totally makes up for it. At least for as long as we live here (once/if we move, I’ll then see what *that* state offers and if it’s equally good I’ll just roll it all over into a new one with them. And if it sucks, I’ll then go with USAA until/if w move again… No point in throwing away free and EASY money, right?)

And then once we decided on opening the account, it was hard of course to *only* put in the $350 I  had initially set aside for it (that same one from Ramit’s Giveaway I won), so we just said “F it” and poured the full $2,500 into it so that we can max out those tax benefits for the 2012 year. It’s just SO HARD to pass up deals like that! Especially since we have the money sitting there in our Savings just doing nothing… It would be a different story if we didn’t have those reserves and another great reminder of how cash gives you OPTIONS later! It may sit there waiting for opportunities for a little time, but then when you’re ready to move you can just jump right in and work it :)


So Baby Money starts his life out with a few grand to his name! We’ll probably end up doing automatic deposits of $200/mo starting in 2013 to hit our $2,500 goal going forward as well. It’s not the $400/mo or so that “professionals” recommend (ya know, cuz college will be like $3 Billion dollars for everyone then), but it’s a good enough start for now… Maybe we’ll get lucky and our investments will return 15%+ a year to make up for it ;)

Oh, and speaking of which, I just chose one of those Target Date funds for now where all the money will be going… I thought of picking one of the more aggressive stocks-only plans, but I know the wife would worry about it too much so we’re going the more safer route instead ;) Only time will tell if it worked! (And we can change it once a year if we decide to too, which is nice)

Now a question for you: Should we include this in *our* Net Worth updates going forward? Or no?

I know this post is all about the baby having his own net worth and all that, haha, but I’m wondering if it makes sense to still keep it in ours instead? Since really it’s our money that’s allocated to him for later use? (Except for gifts that were directly for him, of course)

I guess it wouldn’t be the end of the world to start tacking two net worths going forward, but I just can’t tell which side makes the most sense anymore… I mean, if  he never uses the college money for whatever reason, wouldn’t it still be OURS? To either give to someone else or cash in and take the penalty hits? My brain hurts from thinking about it… Curious to see what YOU would do.

source: budgetsaresexy.com

BOI approves tax perks for P890-M broadband project

MANILA - Converge Information and Communications Technology Solutions Inc. will put up an P890-milion data communication network using fiber optic and wireless technologies, with broadband speed reaching up to 100 megabits per second, the Board of Investments said on Thursday.

In a statement, the BOI said it approved last week tax and other perks for CICTSI’s project, which will use Gigabit-capable Passive Optic Network or GPON, which the incentives-giving agency described as “a pioneer technology for installing, operating and maintaining nationwide wired and wireless broadband networks.”

At present, the Philippines’ telecommunications network can handle data volume transmitted at 250 gigabits per second, the BOI said.

“The rapid Internet growth and enormous bandwidth consumption it entails pose a challenge to telecommunications infrastructure. [CICTSI’s] project will help address telecommunication gap by ensuring faster Internet speed and ability to meet the growing volume of data traffic,” BOI said.

The project will undergo three phases, with the initial phase culminating in December for the coverage of the National Capital Region, Bataan, Bulacan, Nueva Ecija, Pampanga, Tarlac, Clark Freeport Zone and Olongapo City.

The next two phases will be rolled out elsewhere in the country in three to five years, with the areas to be covered serving as switching nodes with a 10-Gbps capacity, the BOI said.

CICTSI will hire 278 workers for this project.

The company aims to attract 40,000 subscribers in the first five years of operations.

This project has qualified for fiscal incentives under the 2012 Investment Priorities Plan, in line with government moves to address the growing number of Internet subscribers in the country—estimated to reach more than 30 million by yearend and projected to grow by 23 percent yearly, data from the National Telecommunications Commission and global research company International Data Corporation show.

source: interaksyon.com

Five Money-Losing Investments by NFL Players

Financial boo-boos of NFL players

NFL players make the same kinds of financial mistakes regular people make. They live beyond their means, become victims of Ponzi schemes and make risky investments.





Click ahead to read about the money mistakes of five current and former NFL players and what you can learn from them.

John Elway tackled by Ponzi scheme

Hall of Fame quarterback John Elway often escaped trouble on the field. But in 2010, Elway and a business partner invested $15 million with a hedge-fund manager who was arrested on charges that he ran a Ponzi scheme, The Denver Post reported. Elway lost $3 million.

Athletes can fall victim to Ponzi schemes if they do a poor job vetting the people who are handling their investments, says Michael Chasnoff, chief executive of Truepoint Inc., a wealth management company in Cincinnati.

Athletes often think they can trust the person investing their money if he or she was recommended by someone the athlete respects.

Investors have to perform their own due diligence no matter how much they trust the person who recommends an investment adviser, Chasnoff says.

The National Association of Personal Financial Advisors offers a questionnaire to help investors interview potential advisers. Before signing on, an investor should also contact the adviser's other clients as a reference.

Look for advisers who are known in the community and give back to the community through charities or nonprofit groups. "They are usually very professional, high-integrity people," Chasnoff says.

Car dealership trips up Deuce McAllister

Former New Orleans Saints running back Dulymus Jenod "Deuce" McAllister had more success on the field than he did selling cars. In 2009, Nissan sued McAllister's car dealership in federal district court for the return of vehicles valued at almost $5.7 million. Soon after, the dealership filed for bankruptcy.

"It's basically the tough economic times that we're in," McAllister told The Associated Press.

Benjamin F. Renzo, author of "Hall of Fame: How to Manage Financial Success as a Professional Athlete," is a big proponent of athletes trying to build successful businesses.

Even so, a lot of players don't hire advisers who understand the risks of starting a business, Renzo says. Some athletes have their agents advise them on these issues. But they're not qualified to give financial advice.

Athletes should invest only what they can afford to lose. Private investments should only make up about 10% to 15% of an athlete's investing net worth, Chasnoff says.

"You don't want to be swinging for the fences," Chasnoff says. "It's not a prudent way to go about accumulating wealth."

Mark Brunell invests heavily in real estate

New York Jets backup quarterback Mark Brunell filed for bankruptcy protection in 2010. He owes $7.4 million.

Brunell was forced to file for bankruptcy because of two failed business partnerships. These included a real estate development company called Champion LLC and a partnership that invested in 12 Whataburger restaurant franchises in the Jacksonville area, according to The Florida Times-Union.

When investing in real estate or a real estate development company, an athlete needs to be able to finance it for five to 10 years to give the business time to get off the ground, Chasnoff says.

A good rule of thumb on any investment is to spend as much time thinking about what will happen if it fails as you do thinking about what will happen if it succeeds, he says.

Drew Bledsoe loses on technology investment

In 2008, former NFL quarterback Drew Bledsoe and some other current and former players sued UBS Securities LLC and UBS Financial Services Inc. Bledsoe invested in a startup company called Pay by Touch through UBS, according to lawsuit filed by the players in Superior Court in San Francisco.

Bledsoe and the other plaintiffs allege that UBS concealed the past legal troubles of the founder of Pay By Touch. Pay By Touch was developing technology to allow people to use a fingerprint to pay for things with a credit card rather than having to actually swipe the card.

"(John P.) Rogers had such a detailed history of criminal and civil misconduct and tax evasion prior to his involvement with Pay By Touch that any knowledge of this would have warned investors," the lawsuit states.

source: foxbusiness.com