Young athletes are known to hit with their first big paycheck. Former NBA star Charles Barkley almost did it too – until Michael Jordan gave him a life-changing financial tip.
Barkley said in an episode of Steam Room Podcast that he and Jordan are about to sign an endorsement deal with Nike at about the same time. Barkley’s deal was initially $3 million, but before he signed on the dotted line, Jordan asked him a simple question: “Hey, why, why, why [sic] Need all this money? ”
The conversation led to Barkley making a decision that could cost him millions of dollars, but instead made him rich. This is what he learned from Jordan to change the game and how to apply it to his own wealth-building strategy.
Although $3 million is not small, Jordan recognizes that with the right strategy, Barkley can turn it into something bigger. He told Barkley to renegotiate his contract and get only $1 million in cash, with the rest of Nike stock options.
After a brief discussion with the team, Barkley accepted the suggestion and made it for the huge surprise. Barkley proudly declared: “I actually made such a big money, but I still have Nike to this day.”
Barkley didn’t mention whether he still owns Nike’s stake, but since his signature basketball sneaker Nike Air Force Max CB debuted on the stock, a jaw-dropping 4,000%. His story highlights how to get fairer than fast cash payments than fast cash payments, especially when it’s related to a strong business, especially when it’s related to family growth.
This is how you can apply this course to your investment strategy.
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Just as Jordan and Barkley are in the dawn of their respective careers, young investors should focus more on capital growth and growth rather than immediate cash flow.
This is why some financial advisors recommend using the 100 rules for age-appropriate asset allocation. To use this rule, subtract your age from 100 years old, the rest represents the percentage of the portfolio you should invest in stocks. So if you are 30, you will allocate 70% of your portfolio for stocks, and 30% can be allocated to a safe haven like bonds.
