Adrian Peterson shows why pro athletes need to be careful with their money

From the moment he arrived in Minnesota 12 years ago, former Vikings star Adrian Peterson was special. At times he made whichever National Football League team lined up to stop him look like the junior varsity.

Peterson was paid like he was special, too, reaching the neighborhood of $100 million. No NFL running back has made more for his play.

That's what makes his apparent inability to make his loan payments, as alleged in a recent lawsuit, such a curious story. Sadly, though, stories of handsomely paid professional athletes outrunning their money are not rare.

Reckless spending was a big part of "Broke," a 2012 ESPN film on the financial problems of retired pros. Peterson famously entered his 30th birthday party riding on the back of a camel. Not sure what one of those costs, but walking in would have been free.

But when stories of financial trouble surface, it's fascinating how often the big issue is that one investment after another has fizzled.

I've been puzzling over this for years, since meeting a couple of financial advisers to athletes who once dropped by the small investment bank in Minneapolis where I then worked.

They weren't conventional investment advisers who happened to have money from a few athletes to manage. The athletes' money was their business. Lots of businesses run on personal relationships, often by a referral, and that was certainly the case in this little niche.

They didn't talk mainstream, institutional notions of capital preservation. Yet they sure liked talking deals.

Some corporate execs and wealthy entrepreneurs seem to think a little like this, too, piling into costly hedge funds and investing in startups in industries they don't know.

Like the athletes, they enjoy being taken through a private door, not the one used by the public. Stock mutual funds, municipal bonds and real estate investment trusts aren't meant for them.

You can see a little of this in the story of retired basketball star Kevin Garnett. He is the only Timberwolves player to ever be named the National Basketball Association's most valuable player, and his career earnings swamped those of Adrian Peterson.

The Garnett financial story has one wrinkle, and that is how he had once been a supporter of financial adviser Charles Augustus Banks IV in a high-profile criminal case.

It was only after Banks was sentenced to four years in federal prison for defrauding former NBA star Tim Duncan that Garnett realized he might have a problem.

A San Antonio Express-News reporter saw Duncan say something to Garnett on a break at a Banks court hearing.

Garnett claimed to be out $77 million, and the suit seems to have just been resolved. Yet the complaint, along with other court documents, provide a lot of rich details of how Banks allegedly operated.

When Banks convinced Duncan to put $7.5 million into something called Gameday Entertainment, Banks allegedly grabbed a $225,000 fee and started collecting 20% of the money due to Duncan in monthly payments. He then got Duncan to personally guarantee a $6 million line of credit.

Duncan was supposed to get a fee for guaranteeing the loan, but Banks took that, too, as outlined in the complaint when the Securities and Exchange Commission banned Banks from the securities industry.

The SEC pointed out that Banks owned a big piece of Gameday and served as its board chairman. And without a deeper dive, it's difficult to say exactly what all Banks steered his clients into.

The complaint Garnett filed here in Minnesota listed a menagerie of ventures, including what appeared to be a tavern, vineyards, a wine magazine and the same cosmetics firm that also impaled Duncan. And, as the complaint alleged, "most (if not all) of these investments are currently illiquid and valueless."

Banks had also created partnerships including a Terroir Hotel & Resort Fund II and a Terroir Winery Fund, according to the SEC. Investment vehicles like these, even if properly run, seem to be part of the problem when rich people get separated from their money.

What's not to like about luxury resorts and vineyards? They sure seem like a lot of fun to own.

Well, maybe. But to someone from Martin County, Minn., like me, a California vineyard looks like another form of capital-intensive farming operation, and thus a chance to lose a lot of money in a downturn.

It is easy to grasp the appeal to an adviser, though. The athletes likely would be much better off investing in Vanguard 500 Admiral shares, but index funds are boring and generate no fees.

What is worse is how athletes seem to become their advisers' "partners" in deals. Garnett alleges that he put more than $57 million into a holding company called Hammer Holdings, owned 50-50 with Charles Banks. Banks only put in $2.5 million.

Can you imagine your own financial adviser even pitching "going into business" together? It's the athletes' money the advisers were after, not their business judgment. And all of this gets worse with borrowed money.

Banks wanted Duncan to borrow the money to put into Gameday, to earn more in interest on the investment than the money would cost to borrow. Staff at Duncan's bank thought that was a terrible idea and said so. Then Banks found Duncan an easier bank to deal with. You can guess how this ended.

How Peterson ended up burdened by loans isn't clear. His attorney declined to discuss details as the story broke. He did note that Peterson's story is "yet another situation of an athlete trusting the wrong people."

Deciding who to trust, as young athletes make it to the big leagues, can't be easy. Plenty of people will be eager to help naive athletes with their money, so I hesitate to offer any more unsolicited advice — except for this:

Start out by trusting no one.