- Mark Cuban’s Investment History
- Mark Cuban Investment Advice
- Conclusion: Mark Cuban Investment Advice
Mark Cuban is the owner of the Dallas Mavericks, an investor on the popular show Shark Tank, and co-owner of the media company 2929 Entertainment. He is worth an estimated $4.3 billion, which he earned primarily through investing in startups over the course of his career.
Cuban has been outspoken with advice that everyday investors can use to build their wealth. In this guide, we’ll take a closer look at 10 pieces of Mark Cuban investment advice that you can use to become a more successful investor.
Mark Cuban’s Investment History
Mark Cuban got his start by founding a software company called MicroSystems in the mid-1980s, and ultimately sold the company for a $2 million profit. Cuban then joined Broadcast.net, which was acquired by Yahoo! just before the dot-com bubble burst. He used the proceeds from these sales to invest in new technology-focused startups throughout the early 2000s, many of which were acquired by larger competitors.
In 2011, Cuban joined as a judge on the ABC show Shark Tank and has invested nearly $20 million through the show. Cuban has also been the majority owner of the Dallas Mavericks NBA team since 2000. He is currently ranked #177 on the Forbes 400 list.
Mark Cuban Investment Advice
Over the years, Cuban has offered investment advice through a number of interviews. He focuses on ways to invest money outside the stock market, and incorporates personal finance as a key aspect of investing.
Let’s take a closer look at Cuban’s top 10 pieces of investment advice.
1. Pay Off Your Debt
According to Cuban, “the best investment you can make is paying off…whatever debt you have.” He encourages anyone with credit cards to pay off the balances in full each month so that you never accrue interest payments. He also suggests paying off any existing credit card debt or personal loans before worrying about investing.
2. Risky Investments are Okay in Limited Quantities
Cuban has made his career investing in startups, which is inherently risky. While he acknowledges that high-risk investments aren’t right for everyone, they can be part of a balanced investment portfolio.
“If you’re a true adventurer and you really want to throw the Hail Mary, you might take 10 percent and put it in Bitcoin or Ethereum,” says Cuban. He suggests that if you do make high-risk investments, you should limit your exposure to 10% of your portfolio and treat that money as if you’ve lost it altogether.
3. Think of Discounts as Investments
One very unique aspect of advice Cuban offers is about how you spend your money on everyday items. He points out that if you can get a discount on household supplies like toothpaste and toilet paper, buying them in bulk is just as good as putting money into the market.
“Saving 15 percent on $1,000 worth of items you know you will absolutely spend money on is a better return on your money than making 15 percent in a year on a $1,000 investment,” says Cuban, “because you don’t pay taxes on it.”
4. Keep a 6-month Rainy-day Fund
Cuban advises everyone to keep at least 6 months’ worth of income stashed away in a savings account so you have a safety net when you need one. “If you don’t like your job at some point or you get fired or you have to move or something goes wrong, you’re going to need at least six months income,” according to Cuban.
5.Invest in Learning
While Cuban typically advises against spending money on things you don’t need, he has a soft spot for books. He points out that “spend[ing] $30 to get one idea that could help propel me, make my businesses better — it was a bargain.”
So, spend time browsing bookshops and be on the lookout for educational resources that can help you reach your financial goals or become a better investor. One of Cuban’s recommended books is “The Only Investment Guide You’ll Ever Need” by Andrew Tobias.
6.When You’re Not Sure, Play It Safe
Cuban says he follows “the No. 1 rule of investing: When you don’t know what to do, do nothing.” According to this advice, it’s better to sit on the sidelines than blindly throw money at an investment you’re not sure about. As an example, if the market is crashing and you don’t know what to do, Cuban suggests that the best plan of action is to wait and see what happens.
7.Time is Valuable
One smart way to invest your money, according to Cuban, is to spend it in exchange for time. “I can make things happen more quickly by paying a little bit more,” he says, “and that’s important because time is the one asset you can’t own, buy, or get back.”
While most investors would point to the stock market as the best way to invest your money, Cuban isn’t such a believer in the market. “Buy and hold is a sucker’s game,” he says.
Instead, Cuban suggests putting your money in a Certificate of Deposit (CD) because they’re safe, reliable, and easy to understand. “Those who put their money in CDs sleep well at night and definitely have more money today than they did yesterday.”
9.Take Advantage of Low Interest Rates
Another way Cuban suggests saving money – which, as he is quick to point out, is just as good a way to increase your wealth as investing – is to refinance your mortgage or student loans whenever interest rates drop. While this can be a headache in the short-term, it can save you significant amounts of money in the long term.
10.Live Beneath Your Means
Cuban also suggests that you should live frugally. Instead of buying a new car, consider a used vehicle. Instead of moving out on your own at the first opportunity, consider living with your parents for another year or getting a roommate. These changes can add up over a lifetime and ultimately earn you more money than any investment could.
Conclusion: Mark Cuban Investment Advice
Mark Cuban has made billions of dollars by investing in startups and being conscientious about how he spends his money. For most people, he suggests that the best way to grow your wealth is to reduce your spending and be alert to non-traditional opportunities to put your money to work for you.