My eldest daughter has started playing basketball. I used that as an excuse to talk to her about Shaquille O'Neal (known as Shaq). Shaq was an amazing basketball player and part of the NBA Hall of Fame 2016. He also has a really interesting money story and now has a net worth of over $400 million.
Many sports stars earn lots of money during their playing careers but then seem to go broke once they stop playing. Not Shaq. His net worth has continued to increase after he stopped playing. He is also ensuring that his kids learn to look after their money which I think is amazing. I'll talk about that later.
If you like the story about Shaq, afterwards you should read the blog about M.C. Hammer as I'm sure you and your kids will enjoy that Riches to Rags story. Also, don't forget to subscribe!
Shaquille O'Neal's Money Story
Poor beginnings …
Shaq grew up in a poor neighbourhood in New Jersey, USA. His family never had much money and he would have to wear the same clothes many times in the same week. As a result, he was often bullied (before his growth spurt).
Whilst he wouldn't wish his upbringing on others, it did instil in him a desire to work super hard to change his life for the better. He knew that basketball was that opportunity.
His upbringing also had a big impact on some of the financial opportunities he took on and turned down later in life. I'll come back to these later.
Becoming rich and early money mistakes …
After finishing college (university) in 1992, Shaq joined the NBA with Orlando Magic. This changed his life. He was no longer poor.
He suddenly had a lot of money but his first paycheque didn't last long. In an interview, he said that he spent his first $1 million in just a few hours. He first went and bought a $350k car. When he got home his dad asked him 'Where's mine?' so he went out and bought his dad the same car. Then his mum asked him 'Where's mine?' so he went out and bought her a new car too.
It wasn't long after that experience that he realised that he needed some help managing his money and hired an accountant. With the help of his accountant, he got into a routine of saving at least 50% of all his earnings.
Throughout his playing career, he earned over $200 million. It was how he used those savings that led him to become one of the five wealthiest basketball players.
Becoming wealthy ...
Shaq wanted to make his money grow so started investing in different businesses.
In his early investment days, Shaquille O'Neal bought a coin-operated car wash. However, his accountant was shocked when $250,000 appeared missing in the books. It turned out Shaq had it all in loose change at his home. There was still a lot for him to learn.
As Shaq continued to learn about managing money, he started investing in many different ways. He invested in the stock market and now owns different businesses (including Papa John's Pizza, Krispy Kreme Donuts and Five Guys). He also invested in real estate.
These investments meant that even after he finished his playing career, his wealth continued to grow.
Shaquille O'Neal's current Net Worth …
It is estimated that Shaq now has a Net Worth of over $400 million and it is expected to keep growing into the future.
Shaq is different from so many sports stars when it comes to money:
Over 60% of NBA players go broke 5 years after they stop playing
Whilst he was never the smartest at school, he took the time to learn about money as an adult
Don't get me wrong, Shaq loves to spend. He has big houses, nice cars and lots of watches. However, he only spends after he has saved.
It's not just that he has a lot of money that makes me really interested in Shaq. It's also how he is using his money and status for good. Also, he has a very interesting approach to how he is teaching his kids about money.
The Shaq Walmart Shoe Brand
Like many of the top sports stars, Shaq had a partnership with top sports brand Reebox and created his own show brand (similar to Nike Air Jordans). However, he ended up walking away from this contract after a conversation with a random mother.
In an interview, Shaq is quoted:
"I'm leaivng the area one day and this lady, she's ripping me into half. 'You motherf***ers! You're charging these babies all this money for these shoes.' So, I had like $2,000 in my pocket and I was like 'Ma'am, I don't make the prices, here you go.' And, she smacked the money in my hand, 'Why don't you motherf***ers make a shoe that's affordable?'
"And, I thought about it and I was like, you know what, she's right. So, that day, I cut ties with Reebok."
This had a big impact on him given his tough upbringing. He took action and created his own, affordable shoe brand and partnered with Walmart. The shoes cost between $20-$30. It is estimated that over 400 million pairs of these shoes have been sold.
Shaq is teaching his kids about money
Shaq is famous for telling his 6 kids:
"We ain't rich. I am rich!"
He isn't giving his kids any cash handouts. If they want money they have to work for it. He is more than happy to support them if they come to him with business plans or investment ideas, but will only accept those that he feels are worthy.
I'm a big fan of this approach. It is so easy for wealthy families to hand over money to their kids to make them happy. As I've written about before, this can lead to entitlement and financial troubles for the kids later in life. You can read more about this in my blog 'Why I feel sorry for the rich kids'.
Summary
I hope you share this story about Shaq with your kids. It really does highlight that learning about money can set them apart from others.
Shaquille O'Neal's net worth continues to grow as he learned to follow the ‘3 Rules of Wealth’:
Save at least 10% of what you receive
Invest what you save
Be patient.
If you want your kids to learn about these 3 Rules of Wealth in a fun way, grab them a copy of Grandpa's Fortune Fables (fun stories to teach kids about money).
If you enjoyed the story about Shaq, I'd strongly recommend you read the epic money story of the legendary musician M.C. Hammer.
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Thanks for reading!
Will
p.s. Check out our SPECIAL BUNDLE OFFER to help your kids grow up wealthy!
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