Mark Cuban’s 3 Most Controversial Money Tips — And Who Stands To Gain From Them
Written by
Andrew Lisa
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Zuri Anderson
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Mark Cuban is a self-made billionaire, an early internet pioneer and a celebrity influencer. According to Forbes, his efforts have earned him a personal fortune of $5.7 billion.
One thing he isn’t, however, is reserved.
The Cost Plus Drugs founder and Dallas Mavericks minority owner is either famous or infamous, depending on who you ask, for his brash, outspoken, and often unconventional positions on politics, technology, and, of course, money.
Here are three of Cuban’s most controversial money tips, along with insight into who might benefit from them. The longtime billionaire also shared some genius things to do with your money.
Cut Up Your Credit Cards
Conventional credit card wisdom advises against running a revolving debt. Those who pay their statement balance in full every month avoid paying interest and can take advantage of valuable perks and rewards, a dynamic Cuban is all too familiar with.
“I should have paid off my cards every 30 days,” Cuban said in a 2016 Business Insider interview regarding money mistakes from his younger years.
However, even not running a balance isn’t enough for Cuban, who bucks popular opinion by advising people to avoid charging altogether.
“Credit cards are the worst investment that you can make,” he continued. “That the money I save on interest by not having debt is better than any return I could possibly get by investing that money in the stock market.”
In a 2008 blog post, he put it even more bluntly: “Cut up your credit cards. If you use a credit card, you don’t want to be rich.”
Who stands to gain: Undisciplined consumers prone to overspending and those with poor organizational skills who might struggle to keep track of credit card accounts.
Live Like a Student
While there’s near-universal agreement that overspending is toxic and living within one’s means is crucial, many experts advise against extreme frugality because, for most people, spartan lifestyles are not sustainable in the long term, and excessive privation can be harmful.
As a guest on “The Really Good Podcast,” Cuban reminisced about sleeping on the floor as a young man. To save money, he lived with so many roommates that he not only didn’t have a room, but went without a bed and a closet, too. He has previously discussed driving cars that cost no more than $200 and grocery shopping at midnight to save as much as possible after being inspired by a book to live on $50 a day.
He has referred to the lifestyle as living “like a student,” which he suggests to anyone who is not yet rich.
Who stands to gain: Those with very low incomes who can’t currently afford more than the bare essentials without going into debt; Highly disciplined savers willing to endure extreme deprivation to build savings quickly.
‘Diversification Is for Idiots’
Diversification — not putting all your eggs in one basket by spreading your money across different assets — is one of the cornerstones of modern investing wisdom.
With that in mind, Cuban summed up what might be his most controversial piece of advice in a 2011 Wall Street Journal interview, in which he told the host, “Diversification is for idiots.”
Channeling the wisdom of Warren Buffett, who Medium quotes as saying, “Diversification is for people who don’t know what they’re doing,” Cuban concluded, “You can’t diversify enough to know what you’re doing.”
Who stands to gain: Experienced, skilled investors who have the knowledge and resources to conduct high-level analysis — and money to lose if their big bets fail.
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