Shaquille O’Neal might be one of the wisest athletes in America in terms of managing his wealth. But money management wasn’t Shaq’s strong suit at the beginning of his career. During an appearance on The Dan Patrick Show, the big man was requested by the host to talk about his million-dollar shopping spree.
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Yes, Shaq spent a million dollars within hours. The only positive thing to come out of it is that he learned his lesson from it.
The four-time NBA Champion said that he had received a million-dollar check from his rookie deal and his first thought was to get the car he always wanted. With a young millionaire’s enthusiasm, he went to a car dealership.
He bought a $150k Benz and calculated the remaining sum in the back of his head. When he came home with the luxury car, his father said, “Man, I wish I had one of these.” Something similar was said by his mother as well, so he ended up buying two more cars. At this point, Shaq’s remaining balance was around $600k, according to his calculations. He was still rich.
Then he went on to buy jewelry and expensive suits, but the final straw was a luxury apartment he rented in San Antonio.
Shaq said, “I rented this high-rise apartment in San Antonio for a year. I don’t even know why I did it for a year, I wasn’t even staying there. $70,000 a month, I just paid it all upfront. Then a couple of days later, the bank manager called me.”
The big fella was in for a rude awakening.
The bank manager informed him about the deductions on his bank statement due to FICA (Federal Insurance Contributions Act). It’s a payroll tax, deducted from each paycheck. After that deduction, the total value of Shaq’s million-dollar check was around 650k.
But since Shaq was not aware, he spent it like he had a million dollars. That became one of the defining moments that helped turn Shaq into a business mogul.
Shaquille O’Neal’s financial advice to the younger generation
The financial mistakes he made early in his career have led Shaq to become one of the most successful businessmen in the NBA. He boasts a net worth of $500 million and owns several businesses.
His experience has also enabled him to be one of the best people to give financial advice to the new generation of athletes. And the big fella is never shy about sharing his wisdom. He always emphasizes the importance of saving and investing. During a conversation on CNBC, he broke down the method.
Shaq said that half the money that an athlete makes should go into his savings. If possible, another 25% of it should be kept aside as well. He believes that only 25% of the total earnings should be spent on maintaining a lifestyle and having fun. The other 75% should go into setting up a strong foundation for retirement.
