NBA superstar turned sports commentator, Shaquille O’Neal, recently admitted to CNN that he didn’t start off managing money too well. After signing his first professional contract in at the age of just 20 years old, he admits: “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.”
He went on to make almost $300 million dollars alone from his NBA salary, and millions more from endorsement deals with Reebok, Burger King and Pepsi.
Shaq reflects, “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.” He adds, “But now you have to educate yourself on how to maintain that, and a lot of people don’t do that.”
23 years later, Shaq, who is now retired from the NBA, remains in good financial condition, but unfortunately many of his fellow NBA players struggle in this area. Although the NBA average salary is $4.7 million, many players still find themselves going through bankruptcy and other financial issues.
Shaq says, “Advice number one: learn what annuities are.” He says secondly, manage your money the old-fashioned way and put 75% of it in the bank for retirement. “You want cars, you want diamond earrings, you want jewelry?” he asks. “Do whatever you want (with the other 25%),” he says.
Saving money as a professional athlete is not as easy as it sounds.
For starters, agents can command fees of up to 4% of the contract’s value, while federal and state taxes can eat up about half of what’s left — not to mention the allure of too-good-to-be-true investments.
“But it’s hard,” he admits. “Guys got families, girlfriends, stuff like that. But, a guy taught me that in 1995 and it worked, it worked for me.”
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