Is there anyone who doesn't want to be even a little richer today than they were yesterday? Self-made entrepreneur and “Shark Tank” star Mark Cuban said in an interview with Vanity Fair that getting rich is all relative. He said there are several things one must do to be in a position to become rich.
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We rewatched Cuban's video interview, shared circa 2017, to see if his guide to getting rich still holds up in 2024. Here are Cuban's nine rules for getting rich.
1. Live like a student
When you first land a great, well-paying job, it's not uncommon to want to spend more money. Early in his career, Cuban saw cool cars that he wanted, but he was “lucky” to keep driving older cars, he recalled.
People who live like students don't have to live beyond their means. They avoid lifestyle creep, defined as an increase in expenses as income increases. By living like a student and driving a reliable old car instead of spending all your money on a new car, like the Cubans do, you can help meet your short-term and long-term financial goals. You can invest money in achieving it.
2. Don't use credit cards
Cuban personally recalled using his credit card to the point where he was called by debt collectors. If you don't have access to cash, we recommend using a debit card to avoid credit card debt.
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3. Save 6 months of income
A general rule of thumb for an emergency fund is to have three to six months worth of savings. However, Cuban recommends that it is better to err on the side of saving more money than less.
No matter what happens with your current job, whether you get laid off or quit your job, you should have at least six months' worth of income saved, Cuban said.
4. Invest your savings in SPX mutual funds
If you don't know what SPX means, it refers to the S&P 500 index. If you've made all of the money transfers listed so far, Cuban recommends investing some of your savings in his SPX mutual fund, which is the cheapest you can find.
5. Invest up to 10% in high-risk investments
If you're a true adventurer, you might put 10% of your money into high-risk investments, Cuban said.
But Cuban added that those who invest in high-risk investments have to pretend they've already lost money, which is why Cuba limits the amount to 10%.
“It's like collecting art or baseball cards…something has enough value that other people will pay for it,” Cuban said.
6. Buy consumables in bulk and on sale.
If you see a sale on everyday items, stock up. Cuban used the example of a sale on toothpaste, which we all use regularly every day. Mr. Cuban says that if he sees a 50% sale on toothpaste, he should buy two years' worth of toothpaste because it will quickly pay for itself.
“Buy the supplies you need when they're on sale on Amazon,” Cuban said. “Probably the price will go up, but it's a real savings you can put in your pocket.”
7. Negotiate for cash
Cuban says negotiating in cash is a much better way to get a return on your investment.
8. Read a book
Cuban, who likes to visit bookstores and browse, said he reads for hours every day. By doing so, he will have the opportunity to find small ideas that will take him to the next level.
He also believes that you should spend money on books: “If there was something that caught my eye and I thought it might give me one idea, it was a bargain to spend $30 to get that one idea that would propel me forward and help improve my business.”
9. “Nice Works”
Finally, the last rule for Cubans to get rich is to be genuinely kind. When you show compassion and empathy to those around you, you get more results.
“The only thing you can control in life is effort,” Cuban says. “Let's work hard.”
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This article was originally published on GOBankingRates.com: Mark Cuban's 9 Rules for Getting Rich
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