Mark Cuban: Follow These 2 Rules If You Want To Get Rich
Written by
Angela Mae
Edited by
Molly Sullivan
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
With an estimated net worth of $6.2 billion, businessman and investor Mark Cuban is no stranger to the world of wealth. Several years ago, he shared his “get rich path” advice with Business Insider in a guide to getting rich. In this article, which he wrote, he discussed what you should — and should not — do if you want to become rich.
Here are his two biggest pieces of advice.
Rule No. 1: Always Have Cash Available
Cuban’s first piece of advice is to have as much cash available as possible. Whether you’re just starting out or you’ve got a substantial nest egg, he recommended saving as much of your money as you can.
To do this, you may need to make some minor or even major lifestyle changes. This could mean drinking tap water instead of going out to buy coffee. Or it could mean making inexpensive meals at home like macaroni and cheese rather than dining out — even if you’re only frequenting traditionally cheaper restaurants like McDonald’s.
He went on to say that your spending habits largely determine your “rate of return.” If you want to be smart about it and build wealth, you may need to give up certain things. He noted that this can be especially difficult for families, but that it’s nonetheless important in becoming rich. For most people, making these changes will require a lot of discipline and practice.
According to Cuban, the purpose of saving money like this isn’t to prepare for retirement. It’s so that you always have cash on hand when you need it. Having investments is one thing, but if your money’s all tied up in things you can never sell — or that offer low returns — you could be hurting yourself in the long run.
Once you have a lot of cash saved up, Cuban suggested putting it in a certificate of deposit (CD) with a high yield and a minimum term of six months. Once the CD matures, you can then take the earnings and reinvest it.
By saving money, setting realistic spending goals and keeping disciplined, you can learn to — as Cuban put it — fight against your “personal rate of inflation.”
Rule No. 2: Get Smart
“The second rule for getting rich is getting smart,” Cuban wrote.
This requires you to do a few things. First, it’s important to find something you enjoy doing, something you’re passionate about. Once you know what that is, you can find business opportunities related to it.
If you’re starting out, Cuban suggested finding a job in a field that matches your hobbies or interests. That way, you can start learning the business while getting paid to pursue your interests.
Even if the job itself isn’t perfect, as long as it’s giving you money — and you aren’t paying someone else to learn, such as by going to school — you’re on the right track. As Cuban pointed out, the path to getting rich isn’t perfect. Nor does everyone follow the same track.
The next big thing you should do is invest in yourself.
Cuban suggested spending every day you’re not working to learn more about the business you’re in. This could mean reading about it, networking with professionals in the field, or going to special events, trade shows or conferences. It will take time, potentially years or decades, so be prepared for that.
As you continue to learn, promote and grow in your career and your understanding of the business, you’ll become better prepared for the ups and downs of the industry. More than that, you’ll be able to recognize when it’s time to embrace any major changes.
All businesses, Cuban said, either boom or bust. The boom is when smart business people sell. The bust is when rich people start on their path to true wealth. By being patient, learning and watching for the signs, you’ll know when your time has come.
What Not To Do
In his article, Cuban included several suggestions on what not to do if you want to become rich, as well as some things to be aware of as you build wealth. Here are the main ones:
- Don’t take shortcuts. There are no shortcuts to becoming wealthy. It takes time, patience and perseverance. Trying to take shortcuts often involves falling for “get rich quick” schemes and other market scams. These can slow you down or keep you from building wealth altogether.
- Keep the best deals to yourself. If you have a great deal, don’t tell others about it. Cuban said he keeps his great deals to himself since they’re part of what has made him rich.
- Be wary of those selling great deals. If someone offers to sell you a supposedly great deal, be cautious. If they had such an amazing deal, they likely wouldn’t need to sell it to you.
Bottom Line on Getting Rich
According to Cuban, getting rich is all about saving money and learning your business inside and out. Don’t take shortcuts, but do be patient and keep investing in yourself as you go. You’ll know when your time has come to score a great deal — something you should keep to yourself — and when you need to wait for a better opportunity.
More From GOBankingRates
