By Ryan Velez
Many children grow up dreaming of making the amount of money that a pro athlete sees, but the fact of the matter is that this can be a fleeting kind of wealth. In 2009, Sports Illustrated reported that within 5 years of retirement, 60 percent of NBA players go broke. Sometimes, it’s a matter of overspending, sometimes, these people are exploited by those close to them. Celebrity Net Worth covers Shaquille O’Neal, one player who hasn’t dealt with this issue, and some advice he provided for players who wanted to build long-term wealth.
A 4-time NBA champion and one of the all-time greats in the sport, he earned $292 million over the course of his NBA career (that puts him as the third-highest-paid player in NBA history). Business Insider asked him about how he was able to be so successful in this regard, and here was his response.
"I would simplify it for them. I would do what one of my friends did to me. I would take a $100 bill and rip it in half. And I'd say "$50, don't even look at it. Don't look at it."
"Now, this other $50 you can play with. Do whatever you want. But if you're smart, you'll rip this $50 up and you save that. And now this $25, do whatever you want. You want a house, 10,000 square feet? Do it. You want cars? Do it, but keep it right here.
If my son [Shareef O'Neal] makes it to the NBA, that's exactly what I'm gonna tell him. The NBA does a great job of, you know, preparing people and warning people, but you know, sometimes you just get so much money and you forget – like if you've got a five-year deal worth $100 million, you're making $20 million, you spend like, $20 million in the first year, you'll be like "You know what? I've got another $20 million coming."
"That's how guys are thinking. I always tell them "Don't think about what's going on now. Think about what has to happen in the future."
I never spent, like, an NBA check like my first four years. Then, when I got married and had kids, all that changed, but that's, to simplify it for them because, you know, a lot of people don't have the business mind or the business tact, so you have to break it down in their language.
So, I would say save 75%, and this 25%, do whatever you want to do with it. Take care of your family — boom, bam. House, apartment, car – but don't ever do more than this." This makes a lot of sense, considering how many people of all stripes get in trouble for living beyond their means."