MUHAMMAD ALI came into boxing with defiance and laughter. It was fitting that he left it the same way.

When professional athletes retire, they usually follow a ritual. The athlete is misty-eyed, says how much he'll miss the game, how thankful he is for what the sport did for him and mentions the many friends he made. The organization retires his jersey or something.

Not Ali. He left with a laugh.

"It was fun," Ali said as he talked from his home in Los Angeles "What's more, I can't truthfully say I'd do anything differently if I had it to do all over again. I mean, I beat them all and now I'm giving it up as champion. Now isn't that beautiful?

"I'm the first black man to go out champion. Joe Frazier, George Foreman, Leon Spinks - none of them could do it. I'm the only one to win the title three times, and I'm getting out clean."

His rationale was typical of Ali.

"I'm 37 years old now. Why fight anymore? Why punish my body anymore? I can still beat Larry Holmes and all those guys. But my reflexes aren't as good and even if I win I could look bad winning."

There will continue to be many unresolved arguments over whether Ali could have beaten Joe Louis, who still maintains a soft spot in the hearts of older boxing fans. The same will be said of Rocky Marciano.

Louis was something special to white America in general and white sportwriters in particular. He was no Jack Johnson who ran around in flashy cars with flashy white women. Moreover, Louis kept his mouth shut. He was, as they used to say, "a credit to his race."

Ali, however, never stops talking, and he always speaks his mind. He also is quick to admit he has made some mistakes.

"There's nothing wrong with making mistakes as long as you learn from them," he said.

"For instance, I married Sonji, my first wife, after knowing her seven days. I married Belinda after knowing her 10 days. You know that's not time enough to really get to know a person. Now I've got the perfect wife in Veronica, but I was with her for two years. She even traveled with me. People knew that."

Ali always does things his way. Women just happen to be as attractive to him as he is to them. His philosophy is shrewd.

On one particular afternoon, children of various ages were running around Ali's Chicago mansion. He announced he was going to drive across town to Belinda's to pick up his other two children.

As he drove (at 80 miles an hour, using the rear-view mirror of his Rolls Royce to comb his hair) he mentioned the children.

"You see, women are funny, man. Especially when they get mad. I have the children at my house often because I don't ever want their mothers to be able to say to the kids, 'Yeah, your father never has you to his house.' Or tell the kids that they never meet their other brothers and sisters.

"I have trust funds set up, and if there's something they need, they can contact my lawyer or send the bill."

It made perfect sense to him.

People who bother to look past that famous Ali mouth that never stops saying how great he is would be surprised to learn that he's probably been the most generous heavyweight champion in history.

He was sitting at home looking at a television newcast one evening and saw that a Jewish day care home for the elderly in New York City was going to close because it lacked funds. He called his lawyer, told him to check it out and have the people call him. They needed $100,000 for the year. Ali said, "You got it. And if after a year you need more, contract me."

Angelo Dundee, Ali's manager and trainer from the beginning of his amazing career, says, "I'm afraid for Muhammad to even have money in his pocket. When we're in New York for a fight Muhammad could give away a couple of thousand dollars just walking to Madison Square Garden.

"People walk up to him and say they'd like to see him fight but they can't afford a ticket. Ali feels bad. He doesn't like the idea that there's someone who wants to watch him but can't spend $100. He's always been that way."

As for the people who worked with him for so many years, Ali says, "Everybody with me made out okay. But now it's like an aircraft factory or some other business closing down. You find another line of work.

"Drew (Bundini Brown) must have made close to half a million dollars while he's been with me and he kept a lot of it. I hear he's planning to open some kind of business in New York. The same thing with Wally (Young-blood). He's opening a business, too. They're all okay, but now I'm through."

There was a ring of finality in Ali's voice. He had been fighting professionally for almost 20 years.

When young Cassius Clay returned home to Louisville after winning a gold medal at the 1960 Rome Olympics, he told anybody who'd listen that he was going to be the heavyweight champion of the world. Some people listened but nobody believed the brash 17-year-old.

Ali's rise was not exactly meteoric. He fought and defeated a lot of nobodies and he kept talking. It was only when he stopped aging the Archie Moore in the fourth round in Novemeber 1962 that people started to listen. He won three more fights in 1963 and the stage was set.

Sonny Liston was champion. Liston, the ex-convict who looked at the world with a scowl. The world looked at Liston with fear. He was thought to be invincible. Ali, on the other hand, had had only 19 bouts.

The sportswriters and the public had a dilemma when the fighters signed for the match. People were tired of Ali's mouth. What's more, he announced that he was a Black Muslim and had changed his name to Muhammad Ali. For maybe the first and only time in his life, Liston became the man in the white suit. He was a hero. He was the one who would finally shut Ali's mouth. At least that's the way the script was supposed to go.

It was evident at the weigh-in that this fight was not going to be a normal one. Liston wore his usual scowl. Ali went berserk. He did everything but froth at the mouth. The physician said Ali was in mortal fear for his life. The betting at that point was not whether Ali would win but whether he would show up for the fight.

But it was all a game, the first of many games Ali has since played with the press. Liston retired on his stool at the end of the sixth round, a thoroughly beaten and tired man.

The rematch came one year later. It was considerably shorter. Liston folded up in the first round from what became known as "The Phantom Punch." Ali isn't even sure about the blow.

Ali defended his title successfully eight times through 1967 before he refused induction into Army, saying he had "no quarrel with Viet Cong."

The reaction was instantaneous. Althletic commissions around the country rushed to withdraw recognition of him as champion. The New York State Athletic Commission was first. It didn't take the World Boxing Association (WBA) very long to jump on the bandwagon.

Then came the 3 1/2-year exile. Ali toured the country speaking at colleges and universities; he even took a flyer as an actor in an abysmally bad Broadway play. It was a hard time for a man as proud as Ali.

When he talks about it now, he just seems weary. And hurt. "All I did was stand up for what I thought was right. What they did to me was wrong. Can you believe it? Three and a half years I couldn't fight.

"Now sometimes I still wonder just how great I might have been if I could have fought all that time. But I still wouldn't change anything. The way things ended, it all made me better as far as history is concerned. I try not to worry about the past.

"I have a saying: A man often worries about his past and worries about his future. How beautiful life would be if he realized the present.

His present began in October 1970 in Atlanta, of all places. He scraped off the years of rust and destroyed Jerry Quarry in three rounds. The champion was back, even if he didn't have the title.

The Vietnam war was becoming increasingly unpopular in America and suddenly people who had turned their backs on him were interested in making some of the money his presence generated.

Then came the first of his three epic battles with Joe Frazier. A perfect left hook by Frazier in the 15th round won him the decision and handed Ali his first loss. Ali dropped the second fight of his career to Ken Norton two years later when he underestimated Norton and suffered a broken jaw in the process. But he avenged that defeat six months later.

After reversing his loss to Frazier with an easy 12-round victory, Ali was ready to meet another destroyer in George Foreman, who had bounced Frazier around the ring and taken the title.

Few people gave the aging Ali a chance in that fight in Zaire. He let the champion punch himself weary while he leaned against the ropes, and then he knocked Foreman out in the eighth round. It was just as well. Foreman was so tired that he couldn't have stood up for the rest of the fight. Ali was back on top for the second time.

The loss to Leon Spinks was a shocker to Ali. "I just took the kid too lightly. I knew it would be different the next time. I trained as hard as I ever trained in my life. I cut out all those sweets and I worked. Wasn't I beautiful. I danced for 15 rounds. It was like a teacher with a pupil. Imagine, a 37-year-old man dancing like I did."

With all those million-dollar purses apparently a thing of the past, you wonder how Ali will continue to live in the style in which he is accustomed. He has that figured out, too.

"Ali I have to do it make personal appearances. I keep getting calls for endorsements and commercials. I'm getting $350,000 for fighting some football player from the Denver Broncos. Isn't that sweet?

"I did that exhibition in New Jersey last week with the mayor of Newark and the governor, but that was for charity. We raised $50,000."

As Ali sees it, he can expect to do that sort of thing indefinitely. I'll be in demand for decent purses for exhibitions for at least 10 years. People who never saw me will still come out to see the old legend."

He may be right. With all the friends, relatives and other people whom he supports lavishly, Ali will find some use for the money.

He earned $50 million during his career. Obviously, much of it has been spent. But having a fraction of $50 million is a great way to say goodbye. CAPTION: Illustration, no caption, By Allen Carroll for The Washington Post