Is All That “Bling-Bling” Really Worth It?
With the NFL Draft having just occurred, and the NBA draft fast approaching, I had an interesting epiphany:
I've heard Shaq on several occasions say that as a rookie he was advised to save/invest his NBA salary for post-NBA life. He was counseled that he could live entirely off of his endorsement money.
Conservatively, Shaq has earned $270-300 million in total salary to date. From his rookie year through the turn of the century, when the economy was doing exceptionally well for investors specifically, he earned about $50 million in salary alone! Up until the economy started to tank last year, and insanely wealthy people started to see their wealth decline sharply, he had been saving/investing around $240 million!!
Think about that for a second. Can you say compound interest/return on investments on $240 million over a 15 year period!!!
I wonder if he has any 50 Cent Vitamin Water stories (hopefully his eggs were not in the Bernie Madoff basket). But I digress…
In spite of all this, he has still been living “balla'rific” (a synonym for “bling-bling” in case you were wondering) off of the estimated $250 million in endorsements he’s made in his career to date (that’s a reasonable estimate of around $15 million per year).
Don’t believe the hype? Go watch the episodes of MTV Cribs that feature him.
Now granted, Shaq has been unique: equally dominate on the court as he is a marketing force off it. The vast majority of NBA players, or any professional athlete for that matter, will never see that kind of dough. Regardless, whoever gave him that advice did a very good job.
This leads me to ponder what Shaq’s post-NBA life will be like. Look at what Magic has been able to accomplish financially after basketball, and he didn’t have anywhere near the same level of capital to begin with. Where do you think Shaq will be a decade after he retires (and here I was wondering why he and Grant Hill were discussing purchasing the Orlando Magic)?
Most important, why are so many athletes (more specifically Black men) completely broke within 5-10 years of their playing careers ending? I mean, at least NFL players can point out their lack of guaranteed money, lower average salaries and shorter playing careers (in case you were wondering about the NHL or MLB - too small a sample size in my opinion). In the NBA, however, you’d have to be Monta Ellis dumb to even jeopardize your contract (pretty dumb right?), or Jay Williams stupid to screw up your paper (sorry Jay, but that was stupid – Go Duke!).
I wish more athletes had Shaq’s financial advisors.
Considering the disproportionate amount of wealth in the Black community that’s derived from sports and entertainment, hopefully you can appreciate why this might prove worrisome to me. I’ve always hated the fact that sports and entertainment are seen as the best “way out” for so many young people in the Black community (hopefully President Obama will make being smart cool again).
If the majority of athletes and entertainers were as fiscally responsible as Shaq and Magic, perhaps my opposition would be tapered. Think about what the small business world might look like if these young people combined Shaq’s capital with Magic’s business acumen.
Makes you wonder who it was that gave Shaq such good advice, and why every athlete isn’t clamoring to add them to their entourage.
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