Early in his career, NBA Hall of Famer Shaquille O’Neal made a few financial mistakes that seem to rival his legendary on-court performances in their memorability. His cautionary tale of an impulsive spending spree that drained his bank account provides an instructive lesson in wealth management for Shaq that can resonates for others far beyond the basketball court.
With a current estimated net worth of $500 million, Shaquille O’Neal embodies financial success. But the 15-time All-Star and now-business mogul wasn’t always savvy with his finances.
During a 2021 episode of the financial literacy podcast “Earn Your Leisure,” O’Neal revealed how he blew through his first major paycheck with alarming speed.
Lesson Learned for Shaq?
Upon receiving a $1 million check, the young baller, then-20 years old, already had plans for the money before it hit his account.
According to Business Insider, it was an endorsement deal with a trading card company.
His shopping list began with a $150,000 black Mercedes-Benz, a lavish purchase that consumed 15% of his paycheck in a single transaction.
Not satisfied with just one luxury vehicle, O’Neal promptly continued his spending spree, purchasing additional high-end cars for both his parents. The extravagance didn’t stop there— he adorned himself with expensive jewelry and commissioned custom-tailored suits, burning through cash at a breathtaking pace without considering the looming tax obligations.
In a separate interview, the father of six, broke down what happened.
“It was me being overly happy-slash-irresponsible,” he said when he received the call about the seven figure check.
“But I didn’t subtract his 15%, right? I didn’t subtract the Texas state tax or the FICA. So, in my mind, I was just trying to do the simple math. I always wanted a fancy Mercedes-Benz. I used to go to the 7-Eleven and get the fake Mercedes, the little ones and just drive them, you know, on top of my bed and — I’m gonna get one of these one day,” he said to Business Insider.
Adding, “So, once I knew I got that million dollars, I went to the bank like a big-time guy and set up a little checking account. And I said ‘OK, I’ve got a million dollars. Here you go, sir.’
He then said he went to the Mercedes dealership to get his dream car.
“The guy says $150,000. I write him a check, give it to him. So now, in my head, a million minus $150,000, I’ve still got $850,000 left, right?” he reasoned.
According to O’Neal, when he got home, his father asked him to purchase a car also.
“Go buy the same car for my father. I’m good. I’ve got $700,000 left. And then came back home. My mother said, ‘I want the smaller version,’ which cost $100,000, so in my mind, I’ve got $600,000. So now, I’ve gotta go do what all the homeboys do — gotta buy rings and diamonds and earrings and this and that,” he explained.
The Tax Reality Check for Shaq
On the podcast, he further noted, he had to pay deductions for payroll taxes under the Federal Insurance Contributions Act (FICA), which was 6.2% at the time.
“I had no idea what FICA, and income, state tax, sales tax were,” O’Neal confessed in the resurfaced clip.
The financial reality hit when his bank manager delivered the sobering news: he had depleted his entire paycheck, with approximately $200,000 lost to taxes he hadn’t accounted for.
“And I was like 50, $60,000 in the hole. So, I was just writing checks. I was buying TVs. I was just buying stuff I didn’t even need,” the now celebrity DJ revealed to Business Insider.
This wake-up call propelled O’Neal toward financial education.
“I don’t want to be like the rest of these NBA players,” he told the host he was thinking at the time. “I got to teach myself.”
The revelation that nearly one-fifth of his income had disappeared to taxes was a pivotal moment in his financial journey.
Mother’s Wisdom
O’Neal’s financial journey was shaped early by his mother’s pragmatic advice. After being selected as the first overall pick in the 1992 NBA draft by the Orlando Magic, his mother challenged him to balance a checkbook — a task he couldn’t complete.
“My mom said balance a checkbook, and I couldn’t,” O’Neal remembered. “She said, ‘Baby, listen. You can do what you want to do, but you’re not ready.'”
This simple yet profound counsel established the foundation for O’Neal’s commitment to financial literacy, driving him to ensure his family would never experience poverty again.
The Annuity Advantage
A conversation with a wealthy older friend introduced O’Neal to a financial instrument that would significantly impact his wealth-building strategy.
“I used to see this rich guy, really rich, older, 80, old Rolls-Royce and all of that. And I asked him, I said how?” O’Neal recounted on “The Breakroom” podcast. The answer surprised him: annuities.
“All this money you’re making, if you put it away, you can invest it, and you can start collecting at 50, 60, and 70,” the friend advised. O’Neal followed this guidance, later calling it his “greatest investment.”
Today, that luxury-focused mindset has transformed into strategic wealth-building. As the second-largest shareholder in Authentic Brands Group, O’Neal benefits from major acquisitions like Champion, purchased for $1.2 billion in June 2024.
His business portfolio includes successful investments in Papa John’s Pizza, Five Guys, and Auntie Anne’s, guided by wisdom from Amazon founder Jeff Bezos: “Invest in things that are going to change people’s lives.”
Financial Education as a Competitive Advantage
O’Neal’s journey from financial naiveté to being a sophisticated investor stands as a powerful reminder that even extraordinary talent requires financial education. His willingness to learn from early mistakes set him apart from many peers who struggled with similar financial pitfalls but never recovered.
Not every investment decision has paid off.
O’Neal once lost a $20 million deal after making a joke about being a flat-earther, resulting in over half a million hate emails and a terminated partnership. Yet these setbacks barely registered in his overall financial trajectory.
His career earnings of $286 million from basketball have multiplied into an estimated net worth of a half billion through strategic investments and business ventures like his growing Big Chicken restaurant chain. His early million-dollar mistake ultimately paved the way for a half-billion-dollar empire — proving that sometimes the most valuable lessons come from expensive mistakes.
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