What happens when NBA rookies become millionaires overnight?

At the start of the year, Alexandre Sarr was playing in Australia’s NBL, where the average salary is around $100,000. Reed Sheppard was playing in college where, NIL deals aside, he earned nothing. Now, after going No 2 and No 3 overall in June’s draft, they are millionaires. Sarr is guaranteed $23m from his rookie contract with the Washington Wizards, while Sheppard will have to make do with $20m from his deal with the Houston Rockets (both contracts could end up paying the duo north of $45m each). It’s not just the top picks who suddenly have access to wealth either. Nine players in the second-round of this year’s draft – guys who may not ever have a meaningful career in the NBA – have signed multimillion dollar contracts with their teams.

Those contracts often change lives for the better. But they can also become a burden as young men, often still in their teens, suddenly grapple with a fortune that arrived overnight.

“It’s a lot of money coming in,” Hall of Fame point guard Tim Hardaway tells the Guardian. “A lot of fucking money coming in.”

Hardaway, the author of the “killer crossover” dribble, was one of the NBA’s biggest stars in the 1990s. And with that status came wealth. According to Basketball Reference, Hardaway earned more than $45m in salary during his career, not to mention his endorsement deals with Nike and other companies. But with the money came responsibilities too.

“It’s tough and it’s difficult,” he says. The Chicago-born Hardaway explains that as soon as he started getting paid in the league, he began taking care of his mother. She stopped working, knowing he could support her. And while he was more than willing to do so, he says, it’s also a common story for pro athletes. One guy makes it and he becomes the family’s bread-winner.

Unlike many pros, though, Hardaway wasn’t a lavish spender. He knew how to take care of his bills and not to blow money on unnecessary things. But he did make a purchase for himself early on. “My Jeep Cherokee,” he says, with a laugh. “With the limited gold rims. It was red, with grey seats in it. I thought I was the shit!”

Hardaway was also able to tell people “no” when necessary if they asked for money. “Because of my mom,” he says. “Like, I don’t owe you nothing! I’m not going to give you nothing! I know how to say no. Man, I got told no enough [growing up] that I know how to tell other people no.”

Hardaway also received advice from his first NBA coach, the Hall of Famer and five-time champion Boston Celtic, Don Nelson. “He said, ‘This shit goes by very quick. The next thing you know, you’re retired. So, whatever money you make, make sure you take care of it,’” Hardaway says. “Those two things stuck with me my whole career.”

In the 2000-01 season alone, Hardaway made $12m (worth around $20m in 2024) while playing for the Miami Heat, a contract that made him the highest-paid point guard in the NBA that year and included provisions for team wins and individual success. But while it wasn’t all about the money – Hardaway says he would have played in the NBA for free if he’d had to – he was made the most of his talents. More recently, he’s talked with his son, Tim Hardaway Jr, who plays for the Detroit Pistons and has made more than $135m so far in his 11 years in the NBA. “I think he’s done a hell of a job,” Hardaway says of his son’s financial situation. “His agent has done a hell of a job getting him paid. And he’s investing and doing what he needs to make his money grow. Him and his people have done a hell of a job.”

Today, even compared to Hardaway’s time in the 1990s, contracts have exploded. This summer, Boston Celtics star Jayson Tatum signed a $313m deal. But numbers like that can be scary. Back in the 1990s, when Charlotte Hornets star Larry Johnson signed an $84m contract, teammate Muggsy Bogues worried it would be a burden for the power forward, writing a few years ago in his memoir, “I was overjoyed for him but I also knew that with a big contract like that came big expectations from the fans and front office.” In 2015, Johnson filed for bankruptcy.

Another former Celtics All-Star, Antoine Walker, made nearly $110m in his career and he too lost it all. And former Boston Celtics champion, Glen “Big Baby” Davis, was recently sentenced to 40 months in jail for trying to defraud the NBA after losing all his millions. Davis has said the league doesn’t help its players post-career for success (Warriors star Draymond Green agrees). Former Milwaukee Bucks star Larry Sanders, who signed a $44m contract in 2013, told the Guardian earlier this year how how hard it can be to make that kind of money that young.

“I come from nothing,” he said, “and then you become the one that has everything. People who are supposed to guide you become your dependents. And you’re too young for that.” Sanders said he lacked a support system back then, both in the league and his personal life. “You get fed to the sharks in a lot of ways. You can find yourself in a very vulnerable position … It can feel like a setup, it can feel like a trap. I felt so alone.”

There are so many stories about athletes losing it all that ESPN made a documentary about the subject in 2012 called Broke. That film cited NFL, MLB and NBA players who lost tens of millions of dollars, shortly after their careers ended, thanks to everything from failed business investments to child support to the misguided purchases of things like gaudy mansions, cars and jewelry. Today, though, the NBA is better about educating its workforce about the perils of becoming a millionaire in your early 20s.

Not only that, there are former players who are looking to help a new generation, like former Seattle SuperSonics All-Star, Detlef Schrempf, who made more than $30m in the NBA and now works for Coldstream Wealth Management.

He lists several things athletes should remember once they become wealthy, from hiring a registered investment advisor to separating finances from their representation to not granting power of attorney to anyone to building a concerted financial plan.

“Education is the key,” he says. “The right professional relationships will help you clarify your goals.” This advice comes not only from his job but from his life as a player. “I never expected to make that kind of money growing up, even while in college,” Schrempf says. “I grew up without much money and even though we lived well once we signed a big contract we lived within our means, never overspending.”

Bob Whitsitt, the former NBA general manager who brought Schrempf to Seattle from the Indiana Pacers, has signed dozens of players to hundreds of millions of dollars over his years as an executive. Whitsitt has seen it all. “A lot of guys when they get their contracts they like to have tangible things,” he says. “There’s always the guy who buys the house for mom or tells mom to stop working … but then you have the friends or entourage who are on the payroll and that’s probably one of the ways you start to lose money.”

Whitsitt cites successful ballers-turned-businessmen like Hall of Famer Dave Bing, who invested in the steel business, and Junior Bridgeman, who, despite never making more than $350,000 in a season, now has a net worth of $600m thanks to shrewd investments in media and fast food. But for every success story, there are plenty of big losses. Whitsitt recalls one player paying for his wife to fly from Seattle to Atlanta just to get her hair done. He recalls another asking for a big signing bonus so he could buy half-a-dozen $125,000 watches for his friends. “It’s like somebody winning the lottery,” he says. “Statistically, many people who win the lottery go broke. They’re not prepared to get this enormous amount of money. There’s responsibilities, stress, pressure, everybody’s got their hand out.”

But if a player is smart and focused on the long-term, he can have a bright financial future. The reigning Rookie of the Year, for example, Victor Wembanyama, isn’t hyper-focused on jewels or cars. The first thing he planned to buy when he signed his NBA contract was a Millennium Falcon Lego set. Memphis Grizzlies 2022-23 Defensive Player of the Year center Jaren Jackson Jr invested a big chunk of his money early on. Miami Heat star Tyler Herro, the 2021-22 Sixth Man of the Year, smartly told GQ that he knows his deal has to set him up for life. And Portland’s rookie point guard Scoot Henderson took classes about finances. “I was locked in,” he told GQ. “Taking notes.” Then again, there is still room for fun: with his first contract, Herro bought a $5,000 Gucci purse for his mom (along with two cars for himself).

“Money comes with playing basketball,” says Hardaway, reflecting on the life of an NBA player. “You got to have that money. But if you don’t go out there and do your job, you’re not going to get [paid]. At times I was good at [saving], at times, I wasn’t. [Investing] will help you out in the long run. [Taking financial classes will teach you] about everything that you’re supposed to know about being a grown man. Some people listen and some don’t.”