Mark Cuban’s Top 3 Money Mistakes (And What He Learned from Them)
Written by
Cara Danielle Brown
Edited by
Zuri Anderson
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Businessman and television personality Mark Cuban has become one of the richest and most successful men in America. From founding Broadcast.com to owning the Dallas Mavericks and later investing in entrepreneurial hopefuls on “Shark Tank,” Cuban knows a thing or two about savvy financial decisions. Yet, his journey is not without missteps.
Here are three of Mark Cuban’s most high-profile money mistakes — and what he learned from each.
Failing To Secure a New Contract with Steve Nash
After becoming the majority owner of the Dallas Mavericks, Cuban took the team’s win rate from 40% to an impressive 69%. But not all his decisions were good ones.
Failing to secure a new contract with Steve Nash has openly been Cuban’s biggest (and most expensive) regret. The decision to not bid higher (to re-sign Nash) was based on the advice of doctors who said Nash’s body was breaking down. But Nash proved them wrong after moving to the Phoenix Suns.
“Nash won back-to-back MVP awards while playing for the Suns,” wrote BasketballNetwork.net. “In Phoenix, Mike D’Antoni let him run a run-and-gun offensive scheme that would change the landscape of the NBA.”
No only did Cuban miss out on winning additional championships, but he lost the subsequent revenue that come with increased ticket sales, merch and higher team value.
Cuban learned a valuable lesson that sometimes the best business and financial decisions have nothing to do with spreadsheets (or medical data and opinions), but, instead the tenacity and character of those you invest in. Never forget the personal element.
Not Investing in Uber
In the early days of Uber, Cuban had the opportunity to invest in the company but turned it down. While he liked the idea, he had reservations.
“He didn’t agree with the valuation of the company,” stated insurance and finance expert at Clearsurance.com, Melanie Musson. “He saw the possibility of negatives, like pushback from the taxi industry, instead of the complete disruption that Uber would cause.”
Today, Uber is valued at roughly $187 billion.
“When you’re trying to disrupt, just bust through the doors and deal with regulatory issues later,” Cuban has since said. In other words, it’s easier to ask for forgiveness than permission. Cuban learned it’s better to take a risk on a good idea rather than getting bogged down by all the potential obstacles.
Misusing Credit Cards
Back in the day, Cuban played fast and loose with credit cards. He wasn’t paying off his cards on time, and interest was accruing out of control. This cost him a ton of money. In fact, Radio Shack once turned down his attempt to buy a computer on credit because his credit score was so bad.
Cuban has frequently stated, “cut up your credit cards […] if you use credit cards, you don’t want to get rich.”
Paying 15% to 20% interest is rarely a smart move — especially when you consider the S&P 500 only has an average return of 10% per year. Nowadays, Cuban advises that, instead of investing, just pay down your credit cards and then burn them.
He learned an important lesson familiar to young people: Don’t become too heavily dependent on debt to get ahead — especially if you have no immediate path to pay it off.
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