Cam Newton says this is the #1 reason rich athletes go broke — explains he no longer makes $20M/year in 2025, but still pays for lavish lifestyle, child support, lawn care, HOA dues

He points to his own situation as “the No. 1 reason” why so many wealthy players end up broke — their failure to scale back spending when their income takes a hit.

Here’s how untamed expenses can gobble up even eight-figure salaries.

Lifestyle creep

Unlike the stereotypical professional athlete, Newton insists he did a better job managing his money while his career was still active.

“I never really had a financial advisor, but I never really was a splurger either — still to this day,” the 36-year-old says.

Although federal and state income taxes reduced his take-home pay to roughly $12 million a year, Newton estimates his annual expenses were between $5 and $6 million — leaving some room for savings and investments.

However, he says many athletes fail to acknowledge the fact that their income is temporary, while their lifestyle is permanent.

Although he’s no longer making eight figures a year, he says his expenses have stayed more or less the same, with private schools, home maintenance, alimony and luxury purchases draining his savings.

“Those things never leave,” he says. “Your overhead never really changes. Your income changes, but your expenses have to change with it.”

Unfortunately, most Americans expect their expenses to change more than their income. According to the latest Survey of Consumer Expectations from the Federal Reserve Bank of New York, consumers expect their household income to rise just 2.7% in the year ahead, while expenses are expected to rise 5%.

This rapid lifestyle inflation is one of the key reasons why even high-income families are struggling financially. Roughly 36% of consumers who earned $200,000 or more a year were living paycheck to paycheck, according to a PYMNTS survey. Meanwhile, a Bankrate survey found that 13% of American consumers had no emergency savings and 1 in 3 had more credit card debt than emergency savings.

Simply put, most people are vulnerable to a sudden income shock. They’re just a couple missed paychecks away from being broke. The only way to avoid this trap is to keep a tight lid on expenses, according to Newton.

Limiting expenses

Avoiding lifestyle inflation and keeping expenses as low as possible is the key to financial security, according to Newton.

“You can live a couple years like a king or, with the right money decisions, you can live the rest of your life like a prince,” he says.