Professional athletes are among the highest-paid people in the world, yet all too often, they go broke shortly after retirement. Many athletes do buck this trend, and in recent times we’ve seen some of them build business empires. That’s not only limited to guys like LeBron James, because with the money players make these days, even a role player can set his family up for generations to come by making smart decisions.
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CJ McCollum has been much more than a role player during his 12-year NBA career, and he’s been paid handsomely for it, to the tune of nearly $250 million. That gives him a financial cushion that most people will never have, but he’s also ensured his future by living by the same rules he set for himself when he was a rookie.
McCollum appeared on the most recent episode of Forbes’ The Enterprise Zone podcast, and although it was interesting to hear him detail his investments in real estate and the wine industry, the most illuminating part of his discussion with host Jabari Young was his answer to the question of how he spent his first million.
“My checks were small in scale to what the rookies make now,” McCollum said. “I was living off an energy drink deal. I had a $12,000 deal and I lived off of that.” For reference, his rookie deal was for four years and about $10.5 million, though after taxes, agent fees and the like, he took home significantly less.
McCollum bought a nice car for himself and his parents, and he paid rent on the four-bedroom house he rented in Portland. That was about it.
“I had a fear and a paranoia that I was gonna go broke,” McCollum said. “I always just feared, like everybody goes broke, so I was just like, ‘I’m not gonna spend money.'”
McCollum didn’t go to a basketball powerhouse like many of his NBA peers, but he learned the basic financial literacy he needed during his four years at Lehigh . Being at a small school didn’t hinder his success, as he was part of the 15-seeded team that knocked Duke out of March Madness. He then became the first Lehigh player ever drafted when he went 10th overall in 2013.
Even after signing multiple lucrative extensions that dwarfed his rookie salary, McCollum ensured his family’s future by being frugal. He uses points and airline miles when traveling, and he spent seven years paying off his first car so he could build his credit.
“The budget that we have in place now for my family and I is the same budget that I had when I signed my first extension in 2016. We pretended that I was never gonna make another dollar for the rest of my life. And then I signed another extension, and then I signed another extension. We’ve just pretended as if none of this money was ever gonna come, and we’re living as if that first extension is all we have left.”
McCollum says that the calculus is different for players today who become wealthier at a younger age thanks to NIL money in college and larger rookie contracts, but the principles he lives by still provide a smart blueprint for anybody willing to follow them.
