The Standard Shattered: What Really Happened to Penn State in 2025

LudicrousSpeedGO! said:
That's the problem. They lifestyle upgrade without investing for the future. Isn't it something crazy like 70% of former NFL players end up in bankruptcy within a few years?

Very often if the money comes easy particularly for a young person, it ends in crash and burn. I had a younger cousin whose mom passed way too early and she was left a very modest $30k as a teenager. She had it spent very quickly, buying clothes, shoes for her friends, etc. She didn't have someone responsible guiding her. $30k at age 18 is over $4 million at normal retirement age if invested in an index ETF that returns the S&P average rate of return. That's with nothing else added to the investment over a lifetime. Instead, she got a short period of living large by her standards and bad spending habits for
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Yes. The stat is crazy. Most are broke within 4-5 years.
My buddy is a wealth manager in an NFL city. He got a punter as a client years ago. Wound up registering with the NFLPA, has participated in the rookie seminars of how to handle your new wealth (think of Carl Nassib's messaging on Hard Knocks). My buddy has wound up working with a number of well-paid players and the stories he has told me are amazing. Tons of cousins and friends with "great ideas" to make money. Players want to help their broke friends and family back home. This, combined with lifestyle and lack of financial knowledge/discipline is disastrous. My buddy has headed off a number of get rich quick schemes, including taking old computers to salvage the gold and silver from the circuit boards.
 
Frank Lee said:
In the retirement planning days, we estimated on the high end every possible fixed cost to consider when doing nothing. That is, all the non-discretionary expenses with no mortgage or rent, but including property taxes and homeowners insurance (both relatively low here in AZ). It also included groceries, fuel, car maintenance, phone, broadband, home maintenance, utilities, all insurances, etc. and we were coming up with $1900-$2200 per month bare bones for two, with a little less for one. It's fairly accurate in reality. No restaurants, travel, PSU tailgates, etc. included. That's about $25k/year just for existence, and without including a mortgage or rent.
I convey this info to our "independent" kids every time they stop by. Tough love.
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For the current crop of "kids" let's say 20 years old, they are going to need much more. Long term the average inflation has been 3.29%. I would use 3% to 4% in calculations. Much of what you listed while all retirement necessities (minus medical which is a big one) are not fixed costs. Many of them are variable costs. And the calculations have to take into account inflation.

Many who don't do the detailed expense analysis that you were doing use 80% wage replacement in retirement as compared to their income pre-retirement. Let's say you are thinking of a modest $100k annual income lifestyle (in today's dollars) for retirement (or 80% of working wages of $125k). If we are talking about a 20 year old, when we apply inflation over their working lifetime until let's just say retirement at 65 years old, then to get to $100k worth of retirement wage replacement in today's dollars, we are talking $362k annually when they reach age 65 using 3.29% inflation.

Another not too precise rule of thumb for retirees is withdrawing at 4% annually to not deplete their funds before death. It's a crude rule of thumb, but let's use it for this example. For $362k annual withdrawal using the 4% rule, kids today would need a little over $9 million socked away at age 65 for the math to work.

$9 million may sound like a lot to most people but a 20 year old kid would need to sock away $9200 per year into an index ETF that returns the historical average return of the S&P (11%) to get there. This is doable even if they are starting out with a $50k per year job. Ideally, they would add to their investments as their income increases through the years. Get a raise, put half of it towards more investments, half of it to a bigger conscious budget for spending.

There is much more detail to the calculations if you want to make the most accurate projections and even still there are tons of assumptions like 3.29% historical inflation continuing, 11% S&P historical return holding, etc. I ignored SS payout even though it could cover maybe 1/3 of these kids' retirement income (if it is there in its current state). But I'm not running a 100 scenario Monte Carlo analysis here. These are rough ballbark numbers. And the best laid plans of mice and men gang aft agley.
 
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LudicrousSpeedGO! said:
It does certainly seem to fit but it is also based on apparently the opinion of 2 people. My guess is that these were 2 people who were marginalized by Franklin right or wrong into roles that were more constrictive to them than they wanted (players or staff). But much of what is written seems to ring true or at least very likely.

Secondly, my guess is that many of those staff and players that follow James were probably the most favored by him. I'm guessing that many of those who didn't follow, weren't favored. Also, if Franklin held meetings with PSU players and staff at his private residence after being hired by Vo Tech and it can be proven, wouldn't that be a massive breach of contract with massive damages assessed? Could he owe PSU millions?
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I would think meeting with players was a No no, meeting with coaches would be expected and not out of bounds.
 
Frank Lee said:
If I'm an OT for "The U" and making $200k, meanwhile Carson Beck is making $6m and is driving around in a Lamboghini, then that final underthrown pass interception would have pi$$ me off big time.
Beck is set for life from just one year of "NIL". After taxes, he can purchase a modest 1million-dollar home and then earn 10%+ from one of those exclusive private wealth firms.
So, even if there is equitable pay based on the market, any big disparities will undermine cohesion.
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Yes but…….., isn’t that the way it is in the Pros? Some positions are worth more and payed accordingly. Maybe college kids are too immature to handle it.
 
Jokerman said:
Not even getting into Franklin, but if y'all believe those are real quotes from college students, I have swamp land in Florida for sale. Also, 2 players? Yeah, who couldn't find 2 people who hate their boss? Come on people, stop holding coaches to standards no one lives by.

That is one of the worst articles I've ever seen written. Taken from other sites and becomes AI jargon.
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Agreed that it is not a great article to take seriously.
 
LudicrousSpeedGO! said:
For the current crop of "kids" let's say 20 years old, they are going to need much more. Long term the average inflation has been 3.29%. I would use 3% to 4% in calculations. Much of what you listed while all retirement necessities (minus medical which is a big one) are not fixed costs. Many of them are variable costs. And the calculations have to take into account inflation.

Many who don't do the detailed expense analysis that you were doing use 80% wage replacement in retirement as compared to their income pre-retirement. Let's say you are thinking of a modest $100k annual income lifestyle (in today's dollars) for retirement (or 80% of working wages of $125k). If we are talking about a 20 year old, when we apply inflation over their working lifetime until let's just say retirement at 65 years old, then to get to $100k worth of retirement wage replacement in today's dollars, we are talking $362k annually when they reach age 65 using 3.29% inflation.

Another not too precise rule of thumb for retirees is withdrawing at 4% annually to not deplete their funds before death. It's a crude rule of thumb, but let's use it for this example. For $362k annual withdrawal using the 4% rule, kids today would need a little over $9 million socked away at age 65 for the math to work.

$9 million may sound like a lot to most people but a 20 year old kid would need to sock away $9200 per year into an index ETF that returns the historical average return of the S&P (11%) to get there. This is doable even if they are starting out with a $50k per year job. Ideally, they would add to their investments as their income increases through the years. Get a raise, put half of it towards more investments, half of it to a bigger conscious budget for spending.

There is much more detail to the calculations if you want to make the most accurate projections and even still there are tons of assumptions like 3.29% historical inflation continuing, 11% S&P historical return holding, etc. I ignored SS payout even though it could cover maybe 1/3 of these kids' retirement income (if it is there in its current state). But I'm not running a 100 scenario Monte Carlo analysis here. These are rough ballbark numbers. And the best laid plans of mice and men gang aft agley.
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Agreed. Fixed cost should have been stated as "fixed cost" (aka not contant in the long term), and investment returns, SS, and inflation increase and all play a part. It was purely an estimate or rule of thumb for those who don't or can't think about such things. 🙂
 
sr108 said:
Yes but…….., isn’t that the way it is in the Pros? Some positions are worth more and payed accordingly. Maybe college kids are too immature to handle it.
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That, it's new, and many colleges don't have the pay scale figured out yet. There are probably lots of opportunities for misinformation, misinterpretation, and feeling slighted. Add in the not yet fully formed prefrontal cortex of a 20-year-old and the mooching agents pushing them and their family members looking to ride the coattails, you're going to get chaos.
 
Frank Lee said:
Agreed. Fixed cost should have been stated as "fixed cost" (aka not contant in the long term), and investment returns, SS, and inflation increase and all play a part. It was purely an estimate or rule of thumb for those who don't or can't think about such things. 🙂
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I think we're basically saying the same stuff. It's just that things like utilities and home maintenance are typically considered variable because they vary by month and year considerably. You can maybe average those costs out over time and use that figure. Heck, even a mortgage payment is slightly variable (as the escrow increases annually due to property tax and insurance costs). No need to focus on semantics. You did an itemized and detailed analysis of your spending needs heading into retirement and I think everyone should do this. Are the numbers going to be perfect? No way, we can't project everything. The big picture is what's important. I don't sweat the small stuff.
 
Bison13 said:
If Dave Jones’s hates it, it’s real. I trust this more than anything else out there. People involved in the program said similar things all along.

I’m sure he cleaned up the quotes to read easier.
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Most of us on this board and elsewhere were looking for explanations to the collapse in big games and for the 2025 season. We've identified micromanagement, favoritism, obvious talent gaps, lack of congruence between schemes and skills, defensiveness, etc. We also speculated that team culture and cohesion as affected by the above and exascerbated by real or perceived disparities in pay, resulting in uninspired play. All this was discussed before this guy published his findings, so no big deal, even if the content was filtered or massaged. We all ended up at the same conclusions. And anyone who's worked in a bureaucracy have witnessed this Franklin persona and M.O. many times. Good luck, Hokies.
 
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