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If you see Bobby Bonilla popping up all over your social media feeds on Saturday (as it tends to this time of year), it’s because July 1 marks the annual $1.2 million payday for the former third baseman — an event that has increasingly attracted interest from average Americans, even some who don’t know anything about baseball.
That’s because Bonilla and his agent, Dennis Gilbert, engineered a contract payout that has become one of the more talked-about feats of finance in sporting history.
On Saturday, Bonilla, now 60, will collect a check for $1,193,248.20 from the New York Mets, as he has and will every July 1 since 2011 and running through 2035, as ESPN has detailed.
Commentary: How to have your own Bobby Bonilla Day
Some have described Bonilla’s payout as one of the great examples of compound interest, because the baseball player opted to defer a $5.9 million payment in 2000 in favor of spreading payments out over 24 years, starting in 2011, with an 8% annual interest rate. Compounding is when you earn interest on your earned interest, which can have a powerful impact over time.
The net payment for Bonilla (and his agent) will be about $30 million when the baseball player turns 72. That amounts to a heck of a retirement plan if you are fortunate (or smart) enough to score it.
Related: Retirees on edge over inflation and stock volatility can take these 5 steps
To be sure, we have written about this time and time again. But it is worth reiterating, as compounding is a key concept for investors, including those investing in equities or in such stock benchmarks as the Dow Jones Industrial Average
DJIA,
the S&P 500 index
SPX,
and the Nasdaq Composite
COMP,
even with stocks getting crushed in recent months as inflation and rising interest rates buffet markets.
Read: Bobby Bonilla Day: This retired baseball player’s contract is the perfect example of the power of compounding
Compounding holds true regardless of whether you are a Mets fan, or if you loved or hated Bonilla.
Opinion: Money lessons from Bobby Bonilla’s steal of a multimillion-dollar deal
Read on: The Mets are paying Bobby Bonilla over $1 million a year because of Bernie Madoff
This article was originally published in July 2021 and has been updated.
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