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Shaq once blew through $1 million in under an hour, but now he saves 75% of his income

CNBC logoCNBC 7/16/2019 Kathleen Elkins
Shaquille O'Neal wearing a suit and tie: Former basketball player Shaquille O'Neal © Provided by CNBC LLC Former basketball player Shaquille O'Neal

Within an hour of signing his first professional basketball contract in 1992, Shaquille O'Neal blew through $1 million.

The former NBA star, who was 20 at the time, bought a $150,000 Mercedes Benz for himself and one for his dad. He also bought a car for his mom and paid off her house.

When it comes to managing money, O'Neal is the first to admit that he's "done a lot of things wrong," in 2018. But today, the retired athlete has made a name for himself as a successful businessman, growing his fortune through various investments and business ventures.

He was an early investor in Google and Apple and, today owns 17 Auntie Anne's, a Krispy Kreme franchise and a handful of restaurants, gyms and car washes.

Thanks to advice he once got from a mentor, O'Neal saves the majority of what he makes, he said in an interview with The Wall Street Journal: "I met a gentleman one time. He had a piece of paper. He said, 'This is $100.'" The man proceeded to rip the paper in half and then told O'Neal: "Smart people invest this $50 and then they have $50 left."

"But the wealthy people take half of that $50 … [and] put that away," he added. "So I started doing that," O'Neal said.

In short, O'Neal saves and invests 75% of his income and lives off the remaining 25%. He also uses whatever is left over to "have fun with," he told the WSJ. "Cars, jewelry, whatever you want."

He recommends any young person coming into a lot of money do the same: "I'd tell them that this money isn't going to last forever. You've got to save it, you've got to invest it and you've got to be smart."

Don't miss: Shaq: As soon as I started investing like Jeff Bezos, 'I probably quadrupled what I'm worth'

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