Why You Should Save Money from Every Paycheck

Editor’s Note: APYs listed in this article are up-to-date as of the time of publication.

Editor’s Note: APYs listed in this article are up-to-date as of the time of publication. They may fluctuate (up or down) as the Fed rate changes. CNBC will update as changes are made public.

Shaquille O’Neal, more commonly known as “Shaq,” is one of the greatest basketball players in history and won four NBA championships. Shaq earned an estimated $700 million during his NBA career, ranking tenth on Forbes’ list of the highest-paid athletes of all time.

That’s a lot of money to make during a basketball career, and he’s been keeping busy since retirement. Shaq became an entrepreneur and built a business empire that includes being a brand ambassador and member of the board of directors at Papa John’s, owning Auntie Anne’s restaurants, creating a fashion line and much more.

CNBC Select spoke to Shaq via email to find out what he carries in his wallet, the financial advice he lives by and his tips on how business owners can succeed.

What Shaq carries in his wallet

Shaq keeps his wallet simple with his license, law enforcement badge (he’s an auxiliary deputy at the Broward Sheriff’s Office in Florida) and credit card. He also has a sentimental token: a picture of him and his mother.

The best financial advice Shaq’s received

The money advice that resonated with Shaq is geared toward savings: “It’s not about how much you make, it’s about how much you keep,” Shaq says. “Save 75% of your earnings and put it away. Use the other 25% as you please.”

After all, more money doesn’t necessarily equal more wealth. Someone with a six-figure salary can wind up with no savings if they spend 100% of their earnings. Whereas someone who earns $50,000 and saves 75% will be in a much better financial situation.

If saving 75% of your income is out-of-reach, consider the 50/30/20 rule, which provides more flexibility. This rule suggests you split up your after-tax income so 50% is spent on needs, 30% on wants and 20% on savings. As your earning change, you can make adjustments and increase savings.

Shaq’s advice for managing money

Shaq’s advice for business owners

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the CNBC Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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