Shaq's $400M+ Net Worth— Boring Businesses Make Money

Read time: 5 minutes

Good morning! It's Friday, March 1st. To bring in the new month, we’re breaking down how Shaquille O’Neal grew his net worth by investing in “boring” businesses!

THE FEATURE

Shaq's $400M+ Net Worth— Boring Businesses Make Money

In a 2013 interview, Shaquille O'Neal told CNBC anchors that he didn't miss playing basketball, stating, "I've always been a businessman who is athletic."

The most popular online estimates of Shaq's net worth place it at $400M! However, these estimates are often inaccurate, and, in Shaq's case, it is likely a vast underestimate. 

Shaq generated $292M from his NBA contracts and approximately $200M in endorsements while playing. 

More interesting is the millions he's generated from his portfolio of car washes, restaurant chains, and gyms— let's break it down!

So, What's the Portfolio?

Shaq wasn't always good with his money. For instance, there's the legendary story of him blowing his first $1M check in thirty minutes. 

None other than Magic Johnson corrected Shaq and showed him the path to financial success. Shaq recounted the first time meeting Johnson, stating, "he [Magic Johnson] pulled me to the side, and said, 'It's ok to be famous, but you want to start owning things."

Maximizing Personal Income 

Before Shaq could "start owning things," he supplemented his NBA contract income with extensive sponsorships with brands like Reebok, PepsiCo, Icy Hot, JCPenny, and Taco Bell. 

His partnership with Reebok began in 1992 when he signed a $15M multi-year deal with the brand. He later turned down a $40M contract with Reebok because a woman called him a "motherf-ker for charging young kids so much money for shoes."

Rather than step out of the shoe industry, the NBA star partnered with Walmart to create Shaq Shoes, affordable sneakers that sold for as low as $12. People doubted the brand, but he's now sold over 400M pairs!

Investing in a Boring (Stable) Portfolio

Shaq began buying up small businesses while in the NBA and has rapidly grown his investment flywheel in retirement: 

Here is some of Shaq's portfolio that's been made public: 

• 155 Five Guys restaurants (10% of the company's entire franchise portfolio)

• 150 car washes

• 17 Auntie Anne's pretzel stands

• 9 Papa John's locations

• 40 24-Hour Fitness gyms

• 18 Shaq's Big Chicken restaurants

Key Observation: "A Lot of Athletes Go Broke"

In a 2018 interview, Shaq said, "A lot of athletes, when they are done playing, have no income and go broke, and I've never wanted to be like that." He advises newcomers to the NBA to "save it, invest it, and be smart."

Despite the financial advice from NBA veterans like Magic Johnson and Shaq, CNBC found that a stunning 60% of players go broke within five years of departing the league! A large contributor to this trend is that athletes are constantly being pitched bad business ideas to get in on. 

If we look at Shaq's investment portfolio, it's obvious that he didn't fall for startup grifters looking for money. A portfolio of hundreds of car washes and Five Guys restaurants may not be as "sexy" as an investment opportunity in some NFT collection, but it works. 

Boring businesses, like burger joints, gyms, and car washes, have been around forever, and for good reason. The longer a business model has existed, the more likely it is to stick around and stay in style. Shaq realized this and has added hundreds of millions of dollars to his net worth. 

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