Allan Iverson was once regarded as one of the best and highest paid athletes in the world, earning more than $150 million dollars in salary alone in his 15 years in the NBA. In 2012, both CBS and Forbes reported that he was in serious financial trouble and was unable to pay off his debts.

Unfortunately, stories of the hapless professional athlete soon parting with his money are quite common. Sports Illustrated Reports:

  • Within five years of retirement, 60% of all former NBA players are bankrupt.
  • 78% of NFL players have gone bankrupt or are under financial stress due to lack of work or divorce.

Professional athletes are often pitied as financially ignorant and incapable of managing their money. But in reality, those of us without athletic talent also struggle with our finances. The average savings for a 50-year-old in 2013 is $43,797*. Not exactly a home run. So how can we be successful with our finances? By following these five tips and staying out of the traps so many people fall into.

Money is finite, spend less than you earn.

This seems overly simplistic, but people struggle with overspending. Start by creating a budget. Come on, a budget won’t kill you. Buy a budgeting system like Quicken, go to free online sites like mint.com, or just write down all your monthly expenses and other bills you pay on and off. Then look at your income and spend less than you earn.

Save your money.

Be sure to allocate money regularly to build an emergency fund equal to three to six months’ worth of expenses. Then, invest the balance in longer-term investments. You can’t create wealth if you don’t save.

Boring investments are fine.

Athletes are notorious for making bad investments. Private investments have a place, but public investments are much less likely to be involved in a fraudulent transaction or lose all value. Exxon will probably be around in 10 years; Your uncle’s new sports bar, maybe not. Start by investing in diversified mutual funds or exchange-traded funds that buy stocks, bonds, and real estate investment trusts. Once your public portfolio grows to be a substantial part of your net worth, you can venture into riskier and less liquid investments, such as private equity, energy, or real estate. Always understand your downside risk. Could you lose all your money and be responsible for other debts beyond your initial investment?

Choose your financial advisor carefully.

Good financial advisors can be a blessing and inept or unscrupulous ones a curse. Where will your adviser keep your assets? A known custodian such as Fidelity or Schwab is essential. Never write a check directly to your adviser! Is your adviser accredited? Certified Financial Planner, Certified Private Wealth Advisor, and Chartered Financial Analyst are some of the more prominent designations. They have experience? Have you consulted them on the SEC website www.sec.gov or on the FINRA website www.finra.org to seek criminal charges or disciplinary action? Have you talked to references who have worked with the adviser for many years?

Choose your spouse even more carefully.

The best way to cut your balance sheet in half is to get divorced. Choose your spouse or partner carefully. Not Married: You may still have to divide assets if you have ever stayed as a married couple or lived together for a certain period of time.

Many of us struggle with the same bad financial habits as professional athletes. His plummet is just more dramatic. Following these five basic tips will help you accumulate more money and have less stress in your life, creating a win-win situation in any game.

Stanley Bae, Michael Shockley and Mark McClanahan are managing directors of wealth management firm RGT. www.rgtnet.com

*statistical brain