Billionaire investor Mark Cuban had an early start in the business world. By the time he was 12, Cuban was already fully submerged in the business mindset – earning all of the extra cash he could by selling sets of garbage bags door to door.
Although, he’s obviously more than well to do right now ($3 Billion Dollar Net Worth), Cuban’s upbringing was much more modest. His grandfather emigrated from Russia and provided for his family by selling goods out of the back of a truck; and his father spent most of his life working hard at a car upholstery shop. Mark Cuban inherited these hard working traits, and applied them to everything he did in order to carve out a better life for himself.
Mark Cuban’s go-getter attitude could be seen inside of the classroom, as well. While in high school, Cuban was taking a number of classes at the University of Pittsburgh, where he then enrolled full time, skipping his senior year of high school. After finishing his first year at the University of Pittsburgh, Cuban transferred to Indiana University to study Business Administration.
Mark Cuban graduated in 1981, and moved to Dallas a year later to start on his business ventures. After eventually landing a job selling software, Cuban realized that he could do much better working for himself. This thought led him to starting his own consulting business – MicrosSolutions. A few years later, in 1990, Cuban sold the successful firm to CompuServe for $6 million. Fun fact – Cuban started the firm without having taken a single computer class.
Most people would consider $6,000,000 a life-changing amount of money, but Mark Cuban’s hunger for wealth was far from satisfied.
Money is a scoreboard where you can rank how you’re doing against other people.
By entering the business world at the time the Internet was just taking off, he was able to add a few more zeros to his net worth.
In 1995, alongside Indiana alum and business partner Todd Wagner, Cuban started AudioNet.
The idea behind AudioNet was to provide people the ability to listen to basketball games online. And although the company was critiqued quite heavily in its early days, AudioNet proved itself to be a huge success. A few years later, the firm was renamed to Broadcast.com and went public. The smash hit attracted a lot of attention from all angles, and the duo eventually sold out to Yahoo! for nearly $6,000,000,000. Now that’s a lot of zeros!
A year later (in 2000), the sport loving billionaire decided to introduce himself to the NBA community by purchasing the Dallas Mavericks for $285 million. Although buying a basketball team may seem like a dream to most (if not all) sport enthusiasts, the Mavericks were not the most ideal choice. The team had not been doing too hot, and they haven’t made it to the play-offs in over a decade. Cuban’s zealous leadership changed all of that. By bringing his passion and innovation to the team, he helped the franchise qualify for playoffs a year later, and set a record for the number of wins (57) in the year following. Eventually the team made it to the finals (in 2006), and finally won the NBA title in 2011 – against the Miami Heat.
Mavericks’ success is just another example of Mark Cuban’s go-getter attitude in action. His passion and drive translates into an ability to turn the tables and always come out on top. The quote below does a great job of summarizing Cuban’s attitude and outlook.
“It doesn’t matter how many times you fail. You only have to be right once and then everyone can tell you that you are an overnight success.”
Now that we know how Cuban got started in his ventures, let’s take a look at what this self-made business tycoon has to say about investing, and life in general.
Before getting into his financial advice, let’s look at the mindset, and mentality that is required to even stand a chance in the very competitive world of business.
It’s no secret, that you need to work hard to succeed, but Cuban emphasizes this point even more – Work like there is someone working 24 hours a day to take it away from you.”
Dramatic, I know, but there is no disagreeing that Cuban has done well for himself – his advice certainly comes from a place of knowledge and experience.
Cuban stresses that work ethic is the one thing that will separate you from the competition. There will always be someone who is willing to work harder than you, and this is the biggest reason why you need to give your best effort to stay afloat. Business is a very cutthroat game and if you don’t have the backbone to push through and maintain your edge, you will be very quick to exit the scene and be replaced by someone else.
Similarly to the work ethic point that Cuban makes, he’s also a strong believer in keeping full control over any situation – “Doesn’t matter if the glass is half-empty or half-full. All that matters is that you are the one pouring the water.”
Cuban argues that your reaction to circumstance is vital to your success, and I can’t disagree. Not getting your dream job, or losing a loved one may make your glass seem pretty empty, but if you’re the one pouring the water, you get to decide how full the glass actually is. Although difficult to master, this skill will help you push through the valleys of your life – both business and personal.
That’s some good advice from the business icon, and although it might not be easy to implement at first, it’s a good idea to give it your best shot.
Now, that we have a fairly good understanding of Mark Cuban’s outlook on life, let’s see what this shark has to say regarding the world of finance. First, on budgeting –
I look at my annual budgets for everything and anything, and I look to see where I can save the most money on those items. Saving 30 to 50 percent buying in bulk–replenishable items from toothpaste to soup, or whatever I use a lot of–is the best guaranteed return on investment you can get anywhere.
Picturing Mark Cuban buying toothpaste in bulk might form a comical image in your mind, but it’s evidence enough that you’re never too rich to save. Pinching pennies on daily spending will help ensure that you have money to use for investing. You might think that saving a couple of dollars on toiletries and the like isn’t vital, but if a billionaire investor does it, then maybe you should too.
So, what does Cuban actually have to say regarding the vast ocean of investing? Well, his advice can be summarized in a few lines, and the gist of it is this –
“Put [your money] in the bank. The idiots that tell you to put your money in the market […] tell you that because they are trying to sell you something. The stock market is probably the worst investment vehicle out there.”
Some might find this advice ironic, as stocks are big part of why Cuban is a billionaire today, but he is no fool, and you need to think like an insider in order to understand this seemingly ridiculous advice.
Cuban defends this comment by explaining that no one should put their money into something where they don’t have an ‘information advantage’. In other words, don’t buy stock if you’re just guessing and praying that the shares will go up.
So, if Wall Street is no longer a good place to make money where should investors turn to get the best return? According to Cuban, the answer is simple – startups.
With technology being where it is today, starting a company can cost next to nothing. And since starting a company is no longer a barrier to enter the competitive business world, there are more and more startups popping up all over the place. Cuban is a strong believer that if you pick enough startup companies which you believe in and invest in them – you can maximize the return on your hard earned cash.
However, before you even start to think about investing, you need to focus on staying debt free. “If you take a loan, you are no longer the boss.”
Try to remember this piece of wisdom next time you swipe your credit card.