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Next Broke Athlete: Shaq?

{ Posted on Jun 13 2010 by Marcus Alston }

Could Shaq be the next high profile athlete to go broke?  According to a document obtained by the Palm Beach Post during Shaquille O’Neal’s canceled divorce filing in January 2008, Shaquille O’Neal spends $875,015 each month or $10.5 million per year.  This includes annual expenses of $318,000 for child care, $291.600 for gas, and $206,640 for clothing.  His 2009-2010 annual salary with the Cleveland Cavaliers was $20,000 before taxes.  After taxes, he probably brings home about $12 million.  He is saving only 7.5% of his salary which does not sound so bad except that after 17 years in the league and at the age of 38, Shaq may see his salary go to zero in the next 5 years.  In fact he has hinted he may retire now.  Shaq aka the “Diesel” is currently the oldest player in the league.  He was supposed to be the final piece of a championship for the Cleveland Cavaliers– “Win a ring for the King [LeBron James].”  It did not happen unfortunately—I am a LeBron fan (and thus a Cleveland Cavaliers fan).  Shaq also made an additional estimated $15 million in endorsements.  But the biggest number of all for O’Neal is $290,846,146 which represents his career earnings (Source:  Basketball-Reference.com).

While Shaq spends a lot, he is doing a lot right.  He has his college degree.  After three years at Louisiana State University, Shaq left school early to enter the NBA draft and to pursue his NBA career, but returned to school in 2000 and received a Bachelor of Arts in General Studies.  Shaq also obtained his MBA online from the University of Phoenix in 2005.  Regarding his MBA, Shaq told the associated press in June 2005 “It’s just something to have on my resume for when I go back into reality. Someday I might have to put down a basketball and have a regular 9-to-5 like everybody else.”  I like his forward thinking which many high profile athletes don’t demonstrate.

Indeed, Shaq seems to be planning for a career after basketball.  He already is an actor and rapper.  He has also worked in law enforcement.  O’Neal went through the Los Angeles County Sheriff’s Reserve Academy and became a reserve officer with the L.A. Port Police when he was with the Los Angeles Lakers.  Upon being traded to the Miami Heat, O’Neal trained to become a Miami Beach reserve officer and was sworn in as a reserve officer in 2005.

Shaq has released 5 studio albums and 1 compilation album and was featured in a song in a Michael Jackson album (2 Bad from HIStory).  Additionally, Shaq has done some acting in films, voice-overs and commercials.  He hosted a television show called Shaq’s Big Challenge.  Shaq has been studying mixed martial arts for over 10 years and may dabble in this area in the future.

Interestingly, Shaq O’Neal is looking to expand his business ventures with real-estate-development projects aimed at assisting Orlando Florida homeowners facing foreclosure.  His strategy is to buy the mortgages of those facing foreclosure and then sell the homes back to them at reasonable and affordable terms that would include a small profit.

Shaq, I love what you are doing to prepare for a career after basketball.  You have a great start and the media loves you.  Please just be careful with your spending and budget wisely.  As a sports fan and personal finance blogger, I am concerned.  Manage your credit cards carefully.  It is unlikely that you will be able to gross $35 million a year so spending $10.5 million a year may not be a good idea.  You may already have it under control, but if not, please manage your spending and your debt.   I want to remember you as the “Diesel” and not the “Debtor.”

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