By Robert Stitt
If you had met 20-year-old Shaquille O’Neal, you would likely not peg him as an astute businessman. He was a giant, a masterful basketball player, but – even then – he couldn’t shoot a free throw, and he was not business savvy. In fact, CNN reports that “Less than an hour after signing his first professional contract…had already spent his first million.” How does Shaq remember that day? “The first thing I wanted to do was relieve my parents of their jobs. I (spent) a million dollars in about 45 minutes, but it was well worth it.”
Shaq went on to earn nearly $300 million in NBA salary, tens of millions more in endorsement deals, millions more from television and movies, and he draws an above average wage as an analyst for “Inside the NBA.”
When he looks back he is glad that he did what he did, but he also sees the risks. Shaq knows the statistics only too well. NBA players earn an average of $4.7 million each year, but CNN reports that “60 percent of NBA players go broke within five years of retirement. At least they’re not NFL players, more than 75 percent of them are broke within 2 years of leaving the league.
“My momma [was] happy, her house [was] paid for; she had the car that she knows she would never get in her dreams, a Mercedes-Benz. My father [had] one, I had one. I was good. But now you have to educate yourself on how to maintain that, and a lot of people don’t do that.”
Shaq says that in 1995 he was given some advice. He was told to put 75 percent of whatever you earned in the bank for retirement and then do what you want with the rest. He did that and it worked well for him.
What advice does he give to today’s young players? “Advice number one: learn what annuities are. Secondly, manage your money the old-fashioned way and put 75% of it in the bank for retirement. Do whatever you want [with the other 25%]. A guy taught me that in 1995 and it worked, it worked for me.”
Shaq doesn’t expect it to be easy, especially in the flashy sports culture. “It’s hard. Guys got families, girlfriends, stuff like that,” he admitted. Even still, Shaq is living proof that not only can you have your cake, but you can eat an awful lot of it, too.