It is true that Shaquille O’Neal might have made plenty of mistakes in his NBA hall of fame career, but spending his first $1 million in 45 minutes isn’t one of them.
The 15-time NBA All Star has revealed the smart advice he followed in his career to make him one of the highest earning players in basketball in an attempt to warn the NBA’s new breed of mega-rich players not to fall into a cycle of financial debauchery.
The 43-year-old, who reportedly earned a staggering $US291 million (in player salary alone) during his 20-season career in the NBA, was actually ahead of his time in wealth management — all accept the first hour after he signed his first big-money contract with the Orlando Magic when he was 20-years-old.
“The first thing I wanted to do was relieve my parents of their jobs,” O’Neal toldCNN recently.
“I (spent) a million dollars in about 45 minutes, but it was well worth it.
“My momma is happy, her house is 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.”
He’s right.
O’Neal has a reported net worth of more than $350 million, but he his financial windfall post-career is the exception, not the rule.
A Sports Illustrated article in 2009 claimed 60% of NBA players become broke within the first five years of retirement despite the competition having the highest average salary for any sporting league in the world with a mean salary of $US4.7 million.
Before endorsements and commercial arrangements, the NBA has 11 players who earn more than $20 million as an annual player salary. That number is expected to boom in coming years when the next broadcast right deal and collective bargaining agreement between the players’ association and the league is completed in 2017.
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| Shaquille O’Neal Spent His First $1 Million In 45 Minutes |
“The first thing I wanted to do was relieve my parents of their jobs,” O’Neal toldCNN recently.
“I (spent) a million dollars in about 45 minutes, but it was well worth it.
“My momma is happy, her house is 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.”
He’s right.
O’Neal has a reported net worth of more than $350 million, but he his financial windfall post-career is the exception, not the rule.
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| Shaquille O'Neal earned $20 million in his last year with Cleveland.Source:AP |
Before endorsements and commercial arrangements, the NBA has 11 players who earn more than $20 million as an annual player salary. That number is expected to boom in coming years when the next broadcast right deal and collective bargaining agreement between the players’ association and the league is completed in 2017.
According to The Wall Street Journal, the next broadcast deal will triple to $US2.7 billion next season.
O’Neal says the next generation of players need to be careful, because the rivers of gold will dry up.
He said he chose to be cautious with his money by placing significant sums in annuity-based investments and placing more than 75% of his salary in bank accounts.
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| The smartest man in the NBA?Source:Getty Images |
“You want cars, you want diamond earrings, you want jewellery,” he said.
“Do whatever you want (with the other 25%).”
“But it’s hard. Guys got families, girlfriends, stuff like that. But, a guy taught me that in 1995 and it worked, it worked for me.”
NBA legend Charles Barkley also told CNN he found it difficult to manage the expectations of friends and family members all wanting a piece of his fortune.
“They’re the worst, your family and friends when it comes to money, because everyone has got their hand out — and you kind of let your guard down with your family and friends,” Barkley says.
“No matter how much money you make, it’s going to be a very small window of your life.”
Vin Baker is just one of the hundreds of star players to squander his entire fortune and have to return to work in recent years.
The 44-year-old four-time NBA All Star started working at a Star Bucks after losing almost $100 million.
O’Neal reckons Baker’s story will be repeated countless times in years to come if player’s don’t set some strict saving and investment rules for their own wealth management.
