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?
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
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.
âThe 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, âCuban said.
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.
âIf 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,â Cuban tweeted on Feb. 3. âAnd 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.
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, âPut 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.
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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, âFor investors who aren’t too familiar with the markets, the best bet is a cheap S&P 500 fund,â according to MarketWatch.
Embrace Poverty (âLive Like a Studentâ)
Cuban told Time’s Money magazine how influenced he was by a book titled âCashing in the American Dream: How to Retire Before Age 35â.
âThe 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.
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. âMany bought highs in 2017 and saw it drop â 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 untilâ¦ I learn that something has changed â, using the textual slang acronym forâ hold dear life â.
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.
âIf 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%, âCuban told Vanity Fair.
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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, âWatching 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.
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, âIf 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: âNo. 1 investment rule: when you don’t know what to do, don’t do anything.
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: âAt 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.