Editor’s note: This article was first published in June 2015, when Mark Cuban was owner of the Dallas Mavericks; he sold his majority stake in the team in late 2023 and kept a minority share.
Mark Cuban is one of today’s self-made billionaires: an entrepreneur and investor, owner of the Dallas Mavericks, and known for his business savvy and his talent for turning small businesses into companies worth millions of dollars. To find out how he got started, see “The fascinating life and career of Mark Cuban“.
But Cuban is also passionate about sharing his thoughts on personal finance, a subject on which he clearly has plenty to say. You’ve probably heard many of these tips before, but it never hurts to be reminded of them.
Mark Cuban’s 5 lessons about money
1. Live below your means so you can take advantage of opportunities
Cuban wasn’t always a millionaire. In fact, at 25 he was working as a bartender, and to save money he chose to share an apartment with five roommates, splitting the $700 rent so he could start putting money aside.
In his book How to Win at the Sport of Business he makes the point that it doesn’t matter how you live, what car you drive or what clothes you wear. The more stress you have from overspending, the harder it is to focus on your goals; the more cheaply you can live, the more options you have.
In other words, you have to make sacrifices to be in a position to take certain opportunities. By lowering your cost of living you free up resources (time, energy and money) to go after bigger goals.
See also: Mark Cuban: 6 things you need to be great in business
2. Make paying off debt a priority: it’s a guaranteed return
One of Cuban’s biggest financial regrets was not having understood and acted on the importance of saving in his twenties, although in his case he was able to act in time.
See also: How the rich use other people’s money to grow their empires and businesses
Cuban repeats something we have said many times: as long as you have credit card debt, or any other high-interest debt working against you, you shouldn’t invest, because you will rarely find a return in your favour that beats the interest on that kind of debt.
That’s why the most profitable and safest investment is usually paying off your debts.
Investing your money can go well or badly, but bringing your debts down to zero is always a safe investment.
3. Use the job you have now to get the job you want in the future
From bartender and shop assistant to founding a company and selling it for billions. Cuban always talks about the importance of constant growth.
He says he worked in jobs he didn’t like, and in jobs he loved but that offered no chance of a career. He also had jobs that didn’t even cover the rent. But he knew he was going to own his own business one day, so his challenge was to learn everything he could from every company and job he passed through. He came to see those jobs as a way of learning about different industries, and on top of that he was getting paid.
Every job is an opportunity to develop a new set of skills and learn about a new industry. And we shouldn’t forget that, very often, a bad job is better than no job at all, as long as you keep moving forward.
4. Invest only in what you know well
Here Cuban follows Warren Buffett’s advice. In an interview with Forbes magazine, he said he rarely follows other people’s advice when making his investments.
He puts his money into companies he knows well, and he recommends acquiring at least a basic understanding of company accounts and investment vehicles.
His warning: handing full control of your money to someone else and trusting that person and their investment decisions blindly can lead to big fees at best, and big losses at worst.
5. Use money as a tool to reach your goals
This is the point people find hardest to understand. Most people treat money as a goal, whereas for most billionaires, money is what helps them reach their goals.
When Cuban is asked whether money can buy happiness, his answer is a flat no.
For him, success isn’t defined by your wallet. It’s defined by waking up with a smile, knowing it’s going to be a great day. That said, he admits that money makes life a lot easier.
Cuban says he was already happy before he reached his goals. As the saying goes, “Happiness is not a goal to be reached, but the fuel for reaching your goals”, and money is simply a powerful amplifier of your true personality. If you weren’t happy without money, you will rarely be happy with it.
Most of the middle class and the poor want a lot of money so they can retire young and stop working, whereas, as we can see, neither Cuban nor the richest people on the Forbes list have stopped working.
The problem isn’t work. It’s giving up on your aspirations and spending your whole life doing something you don’t really want to do.
Sources for this article: GoBankingRates | Blog Maverick | How to Win at the Sport of Business, by Mark Cuban.
See also: Money, success and career tips from the world’s most successful people
Featured image: Nenad Stojković, CC BY 2.0, via Wikimedia Commons.
