Imagine this: you’re relaxing at home. You are only 20 years old, and when you check your current bank account balance it reads “$1,000,000!”
Congratulations! You just received $1,000,000 in one single day.
This isn’t the norm for most Americans, but let’s suppose that you were the chosen one. Naturally, the first thing you want to do is spend some of the money.
Yet, what would you buy?
Would you order a pair of Gucci shoes to show off in front of your friends? Would you book a trip to Paris and take silly pictures next to the Eiffel Tower?
Or, would you take a trip to the car dealership and write a check for $150,000, without negotiation, for a black Mercedes?
In 1992, 20 year old Shaquille O’Neal chose the last option. Even more so, he wasted all his money in ONE SINGLE DAY and went into a $80,000 deficit.
Back in 1992, prior to being drafted to the Orlando Magic, an NBA team, Shaq locked in an endorsement deal.
As most young people, Shaq was financially irresponsible.
He didn’t know his amount was taxed, he didn’t know what FICA was, and so he thought he possessed 1 million dollars, when the amount was actually only about $600,000.
Showered with a feeling of power and ego, Shaq took a quick trip to the car dealership, where he casually spent “around $150,000″ on a black Mercedes, his dream car at the time.
Upon bringing the car home, his dad saw it and asked Shaq, “where’s mine?”
Being grateful for his father’s impact on his own success, Shaq goes and buys one for his dad, at which point he had thrown “300,000” down the drain.
But it wasn’t enough! Shaq’s mother wanted a car too, “a little one.” Knowing he had “more money coming in,” Shaq took her to the dealership and bought her one.
That’s around “$500,000 right there.”
Even though Shaq thought he had twice as much money left in his account, he really only had around $100,000 left (that’s a fifth of what he expected to have left over).
Now that he had bought three cars back to back to back, it was time to get ready for the draft.
Shaq went on a shopping spree to buy designer clothes, expensive jewelry, accessories for his phone and the night club.
A couple of days later, through a call from the bank, Shaq found out he was $80,000 in the negative on his bank statement.
After seeing that, future NBA star decided it was time to hire a financial advisor.
This choice might have saved his life. Unlike a lot of athletes that end up going broke (an estimated 60% of National Basketball Association (NBA) players go bankrupt within five years after leaving their sport) Shaq continues to be a magnate in the entrepreneurial world. According to a report by the Financial Juneteenth,
“…Shaq is the joint owner of 155 Five Guys Burgers restaurants, 17 Auntie Annie’s Pretzels restaurants, 150 car washes, 40 24-hour fitness centers, a shopping center, a movie theater, and several Las Vegas nightclubs.”
His portfolio is worth over $400 million in total…and he’s not spending that in one day.