8 ways you can become a little bit richer now according to Mark Cuban

How do you get rich?

This question brings about 1,530,000,000 results on Google. It floods Reddit and Quora threads, has fueled thousands of books, and is studied by people from all walks of life in every industry.

The reality is that being rich is relative. There’s not an absolute number we can point to where someone has made it financially. And it means different things to different people. In my mind, being rich is about earning enough money to live comfortably and experience life without having to worry about exhausting my savings. To someone else, it could be a mansion in Malibu with a stable of luxury cars and backyard tennis court.

When trying to accumulate wealth, a lot of individuals chase the “quick fix”. Unfortunately, it just doesn’t work that way. Instead, we should look to start practicing a series of reasonable, yet effective financial habits for the long-term. And who better to set those rules than billionaire entrepreneur, investor, and Shark Tank host Mark Cuban?

So, here are eight pieces of advice from Mark Cuban to help you get a little bit richer right now, and hopefully make perennial adjustments for a wealthier future.

“It’s not about money or connections, it’s the willingness to outwork and outlearn everyone when it comes to your business. And if it fails, you learn from what happened and do a better job next time.”- Mark Cuban

1. Live Like A Student

As Cuban said in an interview with Vanity Fair, it’s really tempting to spend more money as you make more money. But this way of thinking severely limits your upside for wealth. When he got his first cool job, the instinct was to buy a really nice car. Instead, Cuban opted to keep his “junker” and save the money he was making.

I have always been a big believer in living with a lean overhead. For two and a half years after college, I moved back home to hit a specific savings goal. In that time, I received two promotions, four raises, and built up multiple side hustle revenue streams. Throughout all of this, I never changed my spending habits. I kept my 2007 Mercury Sable with over 150,000 miles and put as much money as possible towards a savings account, Roth 401k, student loans, and necessary expenses like food or gas.

Sure, it’s alright to reward yourself every once in a while. Just try not to go overboard and blow your entire paycheck.

2. Don’t Use Credit Cards

For years, my grandfather always said, “Don’t pay for it if you can’t use cash!”.

It’s easy to trick yourself and believe the short term gratification of a credit card is worthwhile. Why spend your hard-earned cash right now when you could pay it off little by little and earn rewards?

Yes, building credit is important. However, this is a luxury that people often abuse. I used to hear co-workers say all the time, “Man, I can’t wait to get paid this week so I can finally pay off my credit card”. The last thing you want is to start building up a lot of debt while paying interest.

Cuban says that if you can’t pay in cash, use a debit card instead.

3. Save Six Months Income

The world is a very unpredictable place. If the last couple of months has taught us anything, it’s that life can change in a moment’s notice. A lot of people I know have been furloughed, lost their jobs, or had their hours cut.

Cuban recommends always having at least six months of income saved up.

That way, you can prepare for the worst. Even if you have a sudden epiphany and desire a career change, six months of savings will allow you to explore your options. It doesn’t always have to be there for tragedy. But it will act as a financial cushion in case you need it.

Personally, I use a cash reserve account which earns up to .30% APY with unlimited transfers in and out. It was important for me to put my “emergency fund” into a flexible account that will earn interest if I don’t use it. And I take solace in knowing that the cash is readily available.

4. Invest In The Cheapest S&P 500 Index Fund You Can Find

Cuban advises anyone who can to put savings into the cheapest S&P 500 Index fund that you can find. According to the Motley Fool, “An S&P 500 index fund is an investment vehicle, either in mutual fund or exchange-traded fund (ETF) form, that invests in the 500 stocks that comprise the S&P 500 index, in market cap-weighted proportions.”

This concept has been lauded by other investors as well. Warren Buffett once even stated that an S&P 500 index fund is the best investment most Americans can make.

As of March 30, 2020, The Balance, one of the top-10 largest finance properties, listed the following as the cheapest S&P 500 Index Funds you should consider:

  • Fidelity 500 Index Fund
  • Schwab S&P 500 Index Fund
  • State Street S&P 500 Index Fund
  • Vanguard 500 Index Fund Investor shares
  • T. Rowe Price Equity Index 500 Fund
  • USAA S&P 500 Index Fund Member Shares

Be aware that these index funds match the same S&P 500, but have different fees.

5. When You Don’t Know What To Do, Do Nothing

Cuban said in a 2010 blog post, “If you don’t fully understand the risks of an investment you are contemplating, it’s ok to do nothing”. He held true to this ideology this March, opting to take a calculated approach to his investments even when stock prices were down.You basically just have to be smart and do your homework. Making reactive moves in a fluctuating market is often a bad idea.

Essentially, this is more of a preventative technique to save your money.

He has similarly said to limit investments in things like bitcoin to less than 10% due to its dramatic price swing. Essentially, you have to pretend the money is already gone. It’s like collecting art or shoes.

6. Negotiate Using Cash

Cuban once said, “I tell people all the time, if you’re out — you’re going to take a yoga class and they want to charge you $30, say: ‘Look, I’ve got 20 [dollars].’ You know what, they’re going to take it. Negotiating with cash is a far better way to get a return on your investment.”

Simply withdraw a predetermined amount of money for the week or month and commit to spending only that amount. And, if you find yourself in the midst of a negotiation, don’t be afraid to flash your cash.

There is a psychological toll associated with handing over cash as well. It’s much easier to use a card, overspend, and convince yourself that it can be paid back later.

7. Read Books

In regards to browsing the shelves at bookstores, Cuban commented, “If there’s something that caught my eye and I thought it could give me one idea, to spend thirty dollars to give one idea that could help propel me, make my business better, it was a bargain.”

Honestly, I can’t argue with that logic. Shoe Dog: A Memoir by the Creator of Nike, is what initially inspired me to start taking writing a little more seriously. Perennial Seller: The Art of Making and Marketing Work That Lasts helped me bring a project from ideation to fruition. The 4-Hour Workweek: Escape 9–5, Live Anywhere, and Join the New Rich opened my mind to explore different approaches for developing revenue streams and income.

I probably spent about $35-$40 on all three of those books combined and they have in turn brought me thousands of dollars and opportunities that I never would have found without the ideas filed by those authors.

All it takes is one idea to propel you to the next level.

8. “Nice Works”

This one’s short and sweet: It’s not that hard to be nice.

In a 2018 interview Cuban said, “One of the most underrated skills in business right now is being nice. Nice sells.”

People want to deal with other people who are emotionally intelligent. You might not see a payoff immediately, but this is a soft skill that can be huge for your career development by opening up future opportunities. Plus, you never know when you are going to run into someone later in life.

Final Thoughts

I understand this probably won’t help you buy a new house tomorrow. But it’s definitely a start. Most people, especially 20-somethings, don’t think about their finances long-term. All we’re taught is to save something, try to pay off student loans as soon as possible, and maybe spend a little less on extra expenses. That was about the extent of my financial education after graduating from college. Since then, I’ve learned that you have to try and think in terms of spending less and saving more. That’s how you can start getting incrementally richer right now.

Life isn’t all about money. However, making sensible decisions with your finances doesn’t hurt.

This article first appeared on Medium