Mark Cuban Honest Tips To Help You Enlarge Your Pocket
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You might have heard this billionaire’s name, but who is Mark Cuban and how did he make his money?
It’s possible you know him as one of the sharks on the hit show “Shark Tank,” but Cuban is more than just a TV personality. He’s also the owner of the Dallas Mavericks basketball team competing in NBA and a successful investor. In fact, Mark Cuban’s companies are so successful that he made his first million in 1990 after selling his business to CompuServe and then earned a $5.9 billion paycheck after he sold his online streaming audio service to Yahoo in 1999.
Cuban knows how to be rich and successful, and he is always willing to share his insight. Check out Mark Cuban’s advice, so you can learn how to budget money and think like a billionaire.
1. Start by paying off all debt
“The best investment you can make is paying off your credit cards, paying off whatever debt you have,” Cuban said in an interview with MarketWatch.
Credit cards, of course, have a much higher interest rate, so there’s an even bigger benefit in getting them paid off. “Using a credit card is OK if you pay it off at the end of the month,” Cuban told an interviewer from Money. “Just recognize that the 18 or 20 or 30% you’re paying in credit card debt is going to cost you a lot more than you ever could earn anywhere else.”
2. It’s OK to make risky investments, but they should be only 10% of the total
Higher risk comes with a higher reward, but not all risk is worth taking. Self-made millionaires and billionaires got there by taking calculated risks, Cuban acknowledges. So investing in something completely risky is just fine as long as you limit it to only 10 percent of your overall investments.
“If you’re a true adventurer and you really want to throw the Hail Mary, you might take 10% and put it in bitcoin or Ethereum, but if you do that, you’ve got to pretend you’ve already lost your money,” Cuban told Vanity Fair. “It’s like collecting art, it’s like collecting baseball cards, it’s like collecting shoes – something’s worth what somebody else would pay for it. I’d limit all risky investments to 10%.”
3. Put It in the bank
Although some investors are convinced the stock market is the ticket to wealth, others believe the market is too risky and volatile. Your stock can be profitable one day, yet it only takes one downturn to lose it all.
So rather than put all your eggs in the stock market, the Shark Tank investor encourages keeping some money in a savings account for a rainy day so you’re protected if something goes wrong. In his own words, “Buy-and-hold is a sucker’s game. Those who put their money in Certificate of Deposit sleep well at night and definitely have more money today than they did yesterday.”
4. Save 6 months of income
“Aim to have six months’ worth of income saved in that bank account,” Cuban told Vanity Fair. There can be times when you are fed up with your job or you get fired or you have to move or something goes really wrong, that six months’ income saving will be absolutely crucial for you.
5. If you don’t fully understand the risks of an investment, it’s OK to do nothing
Although investing can build your net worth and put you on the path toward financial freedom, there’s no guarantee that an investment strategy will pay off.
In fact, making reactive moves as the market fluctuates is not a good way to invest, according to experts. Before investing, make sure you are aware of the risks and ready for the possibility of losing money. If you have doubts about too much uncertainty surrounding an investment, there’s nothing wrong with holding onto your cash until the right opportunity comes along.
6. Be a smart shopper
There’s a definite connection between being a smart shopper and a savvy investor. He encourages analyzing how much you spend over the course of a year and then suggested taking advantage of cash, quantity, and discounts to get a better return on your money. In other words, it’s best to buy in bulk.
“Saving 15% on $1,000 worth of items you know you will absolutely spend money on is a better return on your money than making 15% in a year on a $1,000 investment because you don’t pay taxes on it,” said Cuban.
7. Disciplined spending is a must
The Dallas Mavericks owner knows a thing or two about being disciplined and living frugally – after college, he moved into a house with five roommates, lived off macaroni and cheese, and drove an older vehicle. Rather than invest in expensive belongings, he invested in himself and his future goals. Likewise, a frugal mindset can propel you toward your goals. If you make money and build a nest egg, you’ll have the resources needed to make smart investments.
Live beneath your means and reduce unnecessary spending to help build your savings. Consider driving an older car, buying secondhand goods, living with your parents a little longer, or getting a roommate to lower housing expenses.
8. Books are always a good investment
Although Cuban is an advocate of living cheaply and saving as much as possible, he believes that a great book is the one thing that’s always worth the money.
“I used to love to walk through bookstores when there were bookstores everywhere, and if there was something that caught my eye, and I thought it could give me one idea, to spend $30 to get one idea that could help propel me, make my businesses better – it was a bargain,” he told Vanity Fair.
One book that got Cuban “all fired up” is “The Only Investment Guide You’ll Ever Need” by Andrew Tobias, he said. “I’ll read hours every day because all it takes is one little thing to propel you to the next level.”
If you desire financial advice on money and investing, seek out those with a successful track record. Your chances of a one-on-one session with Mark Cuban are probably slim to none, but this doesn’t mean you can’t benefit from his wisdom. He’s proven that he’s more than willing to share his money tips with others and acknowledging his money tips would be the first great investment for your future wealth.
According to Inc
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