We got the big boy mansion, we got Lambos, we got Rolls-Royces, we got a lot of stuff, but guess what? The difference between me and everybody else — my (stuff) is paid for, what about yours?
-Floyd Mayweather, Jr.
The sombreroed man is one of the two finest boxers of the century, Manny Pacquiao rounding out the duumvirate. This coming Saturday, the fighter ironically dubbed “Money May” comes out of “retirement” – actually a 19-month extended vacation – to fight Juan Manuel Marquez. A 4-to-1 favorite, Mayweather is expected to take home $15 million.
Mayweather’s penultimate fight was a financial classic. On May 5, 2007 (pictured here), he defeated Oscar De La Hoya by decision. The fight sold a record 2.4 million pay-per-view buys and grossed a record $120 million, $25 million of which went to Mayweather.
The 32-year old Mayweather has likely grossed somewhere in the low 9 digits for his career. Granted, “gross” means just that: Mayweather pays his stable out of it, including his trainer, his cutman, and the guy whose job it is to hold the belt above his head while he leads Mayweather to the ring.
Even though any casual observer would know that Mayweather is rich, it takes an ostentatious display of that wealth to really bring the point home. So like any good showman, Mayweather bought himself a companion for the big boy mansion, the Lambos and the Rolls-Royces – a Maybach 57S.
The 57S retails for $397,500. For Mayweather, it should be the equivalent of you buying a ‘94 Taurus with 85,000 miles on it and a wonky back window. Given his financial position, Mayweather naturally paid cash.
Or not. He financed, missed payments, and is now being sued. In April 2007, days before the biggest windfall of his life, Mayweather borrowed $415,695 to buy the car. Within 10 months, he stopped making payments. After 4 missed payments, the car was repossessed (if there’s a worse job in civilian life than repossessing cars from boxers, we don’t know what that might be.)
Wait – Mayweather financed 105% of the purchase price? What, did he think he was a 2008 homebuyer?
Actually, Mayweather’s particular Maybach was listed at $512,184. Apparently it included $114,684 worth of rustproofing, floor mats and satellite radio.
Once again, Buy Assets, Sell Liabilities. If the Control Your Cash mantra was Sell Assets, Buy Liabilities, Floyd would be teaching the course.
It gets worse. From the Las Vegas Sun:
The contract called for an interest rate of 16%…
Stop right there. Sweet feathery Jesus. This writer’s cirrhotic deadbeat brother should be able to get an interest rate better than 16%, let alone a man who can earn $25 million in one night.
The length of Mayweather’s loan? 6 years. You know, because he was presumably expecting to find a higher-paying job down the road.
That meant monthly payments of $9,077. Floyd Mayweather did the equivalent of incurring this woman’s credit card balance.
The 57S isn’t even Maybach’s signature vehicle. Mayweather couldn’t finance Maybach’s second-cheapest model. The most expensive Maybach, the Landaulet, runs $1.35 million. But that would just be an outrageous waste of money.
(Ed. note: Besides, how are you supposed to go off-roading with a 6-inch vertical clearance?)
According to county records, Mayweather owes the IRS $6.17 million. That’s in addition to money he owes the state of New Jersey, some homeowners’ associations, even his garbageman. Mayweather’s real estate holdings include several houses in Las Vegas. Anyone care to guess whether his mortgages are fixed- or adjustable-rate?
Let’s say Mayweather was just an idiot, rather than a deadbeat. How much does a $512,184 car with 16% financing for 6 years cost?
Including Mayweather’s down payment, $745,727. The Landaulet is still Maybach’s most expensive model, but the gap has narrowed.
Some lucky buyer picked up the repoed Maybach for $196,000. Which is still an absurd amount of money, unless the buyer can find someone dumb enough to sell it to.
After repossession, the balance due on Mayweather’s former Maybach was $363,000 – a sum that Mayweather probably could have negotiated the car’s price down close to in the first place. (That figure doesn’t include the lender’s legal expenses, which Mayweather will also have to pay for once if he loses the case.)
Mayweather essentially went to the dealer and asked, “How much?”, which is like dipping your hand in barbecue sauce and sticking it in a tiger cage. There’s a whole chapter of the upcoming book Control Your Cash devoted to how to buy a car. It includes an unbending commandment of commerce:
Don’t leave money on the table.
It’s tempting to think that rich people consider their time too valuable to waste on activities as petty as negotiating and bargaining. And yes, for the moneyed class there is an opportunity cost. Perhaps instead of bickering with a Maybach salesman for 20 minutes to save $20,000, Mayweather can rationalize that he could better spend that time training, which indirectly leads to more money down the road.
Which is nonsense. Mayweather can always walk away and head to the Infiniti dealer. Or even hire someone to negotiate for him.
Of course Maybach knows that scarcity sells, and knows that scarcity can turn buyers preoccupied with status into blithering morons. There are only 32 Maybach dealers in America, and only one in Mayweather’s home state of Nevada.
Perhaps you’re one of the few people reading this who has a nine-digit net worth. If that describes you, then congratulations. Surely you know that when you’re rich, and when you’re liquid, you should:
Pay cash. Cash has a 0% interest rate. Cash isn’t contingent on next year’s financial situation. Cash doesn’t magically add a 7th dollar to every 6 you’re already spending.
Mike Tyson set the standard for self-destructive behavior for boxers (well, not counting Alexis Arguello, Trevor Berbick, Clifford Etienne, Arturo Gatti, Tony Ayala Jr., Oliver McCall, Tyrell Biggs, Davey Hilton, Ron Lyle, John Tate, Dwight Muhammad Qawi…alright, maybe Tyson isn’t in the top 50). But Mayweather is chasing hard.
Mayweather’s upcoming opponent, Juan Manuel Marquez, finishes every training session with a tasty cup of his own urine. He’ll be only the second-craziest person in the ring Saturday night.