Retired NBA players Shaquille O'Neal and Dwyane Wade built reputations as major stars during their careers. They also won multiple championships with the Los Angeles Lakers and Miami Heat, respectively, but the similarity extends off of the court as well. Both NBA stars had to learn difficult lessons about money early in their careers.
O'Neal and Wade both sat down with Shark Tank star Daymond John for Black Entrepreneurs Day in order to have a tough conversation about finances. The men discussed poorly managing their money and making some unnecessary purchases. John said that he had burned through a lot of money early and asked for other stories. O'Neal responded by telling how he spent $1 million in about an hour.
"First — you get that money — I wanted a black on black 560 SEC Mercedes," O'Neal explained. "So I go to the dealership — in my mind, I got a million dollars — I go to the dealership. At this point, I had no negotiating skills. Guy looks at me and says '150 [thousand dollars].'"
The NBA legend said that he knew the purchase would leave him with $850,000, so he bought the car and had it delivered to his house. However, his dad also wanted a matching Mercedes, so O'Neal paid for that as well. He then bought another for his mother. The spending spree continued with expensive jewelry, fancy suits, a 12-disc CD changer and a trip to Las Vegas with his friends.
While O'Neal had an entertaining time spending the money, he quickly got a life lesson after meeting with the bank manager. The man showed him the statement listing all of the purchases, as well as $300,000 for FICA tax. O'Neal said that he had no knowledge of federal tax, income tax or any other deductions, so he quickly decided to learn about financial management.
Wade had similar stories as O'Neal — although he didn't admit to burning through $1 million with an hour-long shopping spree. However, he did detail the stark difference between his basketball scholarship and his first NBA contract with the Miami Heat. The major increase in money resulted in some poor decisions.
"So I go from $200 every two weeks to $10 million over the course of my four- to five-year deal with the Heat," Wade explained. "I don't have anybody that I trust, besides my agent, who I just signed and I just met a few months before. I don't know anybody in this world."
Wade further explained that he had no one to stop him from buying Bentleys or other fancy cars. He also lost a lot of money through bad relationships and business ventures outside of the NBA. Some resulted in lawsuits. Wade said that he ultimately found people that could point him in the right direction and show him how to save money, but only after he went "through the ringer."