Why ex-NBA star Baron Davis urges rookies to invest $25,000 right away

When Baron Davis was 19 years old, he signed a $2.7 million contract with the Charlotte Hornets of the NBA. Now 42, the former basketball star wishes he could start investing that money right away.

“Knowing what I know now, I certainly hope to take on the responsibility to invest more and be an entrepreneurial angel investor,” Davis told CNBC Make It.

Over the course of his 14-year career in the NBA, Davis has earned over $147 million. These days, he says, some of that money is investing in cryptocurrencies and creating the metaverse. He also appeared as a small business consultant in the final season of the Deluxe Corporation’s Small Business Revolution documentary series.

When Davis talks to beginners today, he gives them a simple tip: Take at least $25,000 and put it directly into a business plan, investment, or stock market. He tells them to consider the money “burned out” – and to do so regardless of what their agents recommend.

“Leave this [$25,000] Being a graduate school or business school for you, “because you can actually track it down, and that’s where you’ll learn.”

Davis retired from the NBA in 2016, but says he learned the value of investing a few years into his NBA career When he bought an early stake in Vitamin Water. In 2007, Coca-Cola acquired Vitamin Water for $4.1 billion, and Davis earned an undisclosed – but said to be profitable – return on his investment. (A spokesperson for Davis did not immediately respond to a CNBC Make It request for comment.)

Davies says he has since been “lucky” with his investment decisions.

The former guard was an early investor in Thrive Market, a membership-only online grocery startup that was founded in 2014. The company grew significantly during the early months of the pandemic and brings in $120 million in annual revenue, according to Modern Retail. (Three Market did not immediately respond to CNBC Make It’s request for comment.)

Davis has also founded several startup companies, including retailer Black Santa and event company Business Inside the Game (BIG).

His take from those experiences: Before you try to invest in a company, find out how you can be useful to it. He says Davis’ “secret sauce” is his network: He has described himself on LinkedIn as a “key conductor,” and says he usually uses his connections as a selling point for startups.

As for his interest in cryptocurrency, Davis declined to reveal any specific investments — but noted that he is trying to put together a metaverse to honor talented NBA players who don’t make it into the Basketball Hall of Fame.

“We want to celebrate it in our metaverse and in our Hall of Fame history,” he says.

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