When Shaquille O’Neal learned the California tax rules the hard way: “I saw my check with $10.9 million & I had spent $9 million”
When Shaquille O'Neal left the Orlando Magic and signed with the LA Lakers, he was on top of the world. During his time in Orlando, his highest-earning season saw him make $5.7 million. After the dominant big man saw that he would be earning $20 million per year with the Lakers, he started spending money like there was no tomorrow.
As he explained years later, he quickly went to work looking at the biggest mansions in Beverley Hills. It didn't stop there, though. He wound up buying cars, not just one or two, but nearly a fleet, admittedly paying for everything in straight cash. As great of a feeling as it was, when his accountant, Lester Knispel, called, things took a sharp turn.
Knispel has been one of the key guiding forces on O'Neal's journey, investing in businesses and teaching him many important lessons, including California tax laws. What O'Neal didn't realize when he was on his spending spree was that because of California tax laws, he would be making as much money as he thought.
He recalled the conversation with Knispel during a podcast appearance with entrepreneur Gary Vaynerchuk:
“'You just spent your whole first-year salary,' to which he responded, 'No! 20 million, I only spent about 10!' So when I saw my check with $10.9 million and I had spent $9 million, boy, was I upset with myself. I really was.”
Below you can see a tour of Shaq's Orlando home.
Shaquille O'Neal's accountant, Lester Knispel
As it turns out, Shaquille O'Neal spending his entire first year's salary with the Lakers wasn't the only time the NBA star shocked his accountant Lester Knispel. There was another time the 7-foot superstar left his accountant shaking his head in complete disbelief.
(Suggested Reading: When LeBron James fired back at Charles Barkley for calling him whiny)
During O'Neal's playing days, his accountant couldn't seem to figure out where a quarter million dollars of O'Neal's money had gone. As time went on, he grew increasingly concerned, freaking out to the point that O'Neal was forced to come clean about something he was hiding.
In his autobiography, O'Neal wrote:
“It took me a while, but I finally came clean with him. I showed Lester my bedroom, where there were a whole bunch of wooden rain barrels — full of quarters. Lester said, ‘Shaquille, what the hell is this? Is this the missing money?’ ‘Yes,’ I admitted. ‘Lester, I can’t help it. I like seeing my money. Come here, run your fingers through all these quarters. It’s awesome!’”
Once he came clean, he and Knispel were able to get all the money deposited and accounted for. Given that the $250,000 was in quarters, it took about a week for them to get everything deposited incrementally.
With how successful his business endeavors have been over the years, it certainly doesn't seem like he's sweating spending his first year's salary in LA now. At the time, however ... what a blunder.
(Suggested Reading: Shaquille O'Neal talks about the difference between working for TNT and working for ESPN)