Mark Cuban’s best investment advice

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Often controversial and always entertaining, self-made billionaire Mark Cuban isn’t shy in his opinions, especially when it comes to money – and it is. good news for budding investors. Mark Cuban, after all, is rich and famous. He owns a jet and a basketball team. He’s a reality TV star that millions of viewers watch on “Shark Tank”. If you aren’t listening to a guy who made one of the world’s greatest fortunes out of nothing, who are you listening to?

Read: ‘Shark Tank’ Stars Share 50 Business Tips
To verify: 11 ways Warren Buffett lives frugally

It hasn’t always been that way. Cubans have lived for years on the budget of a broke student, driving lousy cars, eating lousy food and saving, saving, saving. Serial entrepreneur, forward-thinking investor, and notorious calculated risk-taker, Cuba’s seed money is now fueling startups across the country in all kinds of industries.

The following is a selection of Mark’s best cubisms – from years past to this year – who can inspire, educate and entertain investors of all skill levels.

Last updated: July 30, 2021

Vitapix / Getty Images

Vitapix / Getty Images

Pay off the debt, then invest

In a 2018 interview with MarketWatch, Cuban established an indisputable arithmetic as to why paying down debt before investing could well generate the best returns of all.

“The best investment you can make is to pay off your credit cards, to pay off all your debt. If you have a student loan with an interest rate of 7%, if you pay that loan back, you earn 7%, that’s your immediate return, which is a lot safer than choosing an action, or trying to choose real estate, or whatever, ”Cuban said.

See: How rich are Elon Musk, Donald Trump and other big names?

simpson33 / Getty Images / iStockphoto

simpson33 / Getty Images / iStockphoto

Never invest to get out of trouble

Just as you should never gamble if you absolutely have to win, Cuban insists that the same rules apply to investing as a remedy for financial problems.

“If you’re buying because you need the price to rise and solve a financial hole you’re in, now is the EXACTLY BAD time to trade,” Cuban tweeted on Feb. 3. “And we all have to respect the people who choose to sell because they need it. Invoices don’t care what the market is doing. [sic]. Come back well and come back later.

To find: These billionaires got richer during the pandemic

katjen / Shutterstock.com

katjen / Shutterstock.com

Do not invest in the stock market

Cuban had harsh words for what most investors see as capitalism’s greatest wealth-generating machine – the stock market. In 2007, he used his blog to give some advice to young people who don’t know what to do with their money.

He wrote, “Put it in the bank. Idiots who tell you to put your money on the market because it will eventually increase have to tell you because they are trying to sell you something. The stock market is possibly the worst investment vehicle out there. If you don’t put your money in the bank, NEVER put your money in something where you don’t have more information. Why invest your money in something because a broker told you to? If the broker had an idea, he wouldn’t be a broker, he would be somewhere on a beach.

Following: 16 money rules millionaires swear by

champja / iStock.com

champja / iStock.com

But if you do, buy an index fund

Not everyone is going to create a successful software startup from scratch, and they don’t necessarily want to be called “dumb” for investing in the stock market. All right, but Cuba at least wants them to avoid picking their own stocks or buying expensive mutual funds. His advice mirrors what fellow billionaire investor Warren Buffett has long offered as well – buy an index fund.

In an interview with Kyle Bass, founder of Hayman Capital Management, Cuban said, “For investors who aren’t too familiar with the markets, the best bet is a cheap S&P 500 fund,” according to MarketWatch.

Read: 21 Warren Buffett Tips Anyone Can Use

aldomurillo / Getty Images

aldomurillo / Getty Images

Embrace Poverty (“Live Like a Student”)

Cuban told Time’s Money magazine how influenced he was by a book titled “Cashing in the American Dream: How to Retire Before Age 35”.

“The premise of the book was that if you could save up to $ 1 million and live like a student, you could retire. But you should have the discipline to save and know how you spent your money once you get there. I did things like have five roommates and live on mac and cheese and I was really, very frugal. I had the worst car possible.

See: Actions that would have made you rich today

eclipse_images / Getty Images

eclipse_images / Getty Images

Buy a stock you believe in and keep it for life

When the Reddit and GameStop trading frenzy subsided, Cuban was able to offer sound advice, as most investors find it difficult to understand what is even going on.

On a Reddit AMA (Ask Me Anything), Cuban responded to a Redditor’s call for advice with this comparison to Bitcoin. “Many bought highs in 2017 and saw it drop ⅔ or more. But they held on because they believe in the asset … When I buy a stock, I make sure I know why I[‘m] buy it. Then I HODL until… I learn that something has changed ”, using the textual slang acronym for“ hold dear life ”.

To find: How does cryptocurrency work – and is it safe?

SARINYAPINNGAM / Getty Images / iStockphoto

SARINYAPINNGAM / Getty Images / iStockphoto

Take risks, but play it safe 90% of the time

Without risk there can be no reward, and the greater the risk, the greater the potential payoff. Cuban wants investors to go bankrupt and fight for fences – but only with a fraction of their investment.

“If you’re a real adventurer and you really want to say hello to Mary, you can take 10% and put it in Bitcoin or Ethereum, but if you do that you have to pretend you’ve already lost your money. . It’s like collecting art, it’s like collecting baseball cards, it’s like collecting shoes. It’s a flyer, but I would limit it to 10%, ”Cuban told Vanity Fair.

Following: 13 toxic investments to avoid

jpgfactory / Getty Images

jpgfactory / Getty Images

If one of those risks is crypto, stick with the big guys

If you are planning to jump on the cryptocurrency bandwagon, it would be wise to bet on the biggest names in the game, as Cuban sees too many similarities with 1999 for any convenience.

On January 11, he tweeted, “Watching crypto trading is EXACTLY like the stock market bubble on the internet. EXACTLY. I think btc, eth, a few more will be analogous to the ones that were built in the dot-com era, survived the bubble burst, and thrived, like AMZN, EBay, and Priceline. Many will not.

Read: India proposes Bitcoin ban – and US could be next

Daniel Zuchnik / WireImage

Daniel Zuchnik / WireImage

If you don’t understand an investment, walk away

Cuban has crossed philosophical paths with Warren Buffett more than once when it comes to the fundamentals of investing. Like Buffett, Cuban cautions against investing in things you don’t understand.

In 2010, Cuban wrote on his blog, “If you don’t fully understand the risks of an investment you are considering, there is nothing you can do. More recently, he confirmed this position by stating even more categorically: “No. 1 investment rule: when you don’t know what to do, don’t do anything.

See: 21 billionaires who lost big in 2020

fizkes / Getty Images / iStockphoto

fizkes / Getty Images / iStockphoto

Knowledge is the best investment

The best way to avoid investing in something you don’t understand is to understand everything you are investing in. Cuban wrote on his blog about the power of what he calls “the knowledge advantage” and what he learned from it during his early years. as a budding entrepreneur.

In 2007 he wrote: “At MicroSolutions, this has given me a huge advantage. A guy with little computer experience might compete with a lot more experienced guys just because it took me a while to learn everything I could. I read all the books and magazines I could. Damn, three dollars for a magazine, 20 dollars for a book. A good idea that led to a customer or a solution that paid off several times.

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This article originally appeared on GOBankingRates.com: Mark Cuban’s best investment advice


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