It didn’t take long for Mark Cuban to start enjoying the spoils of being a billionaire. Shortly after adding the “b” to his net worth in 1999 and joining the vaunted “three commas club” following the sale of Broadcast.com to Yahoo!, Cuban made history again with the single largest e-commerce transaction of all-time—a $40 million Gulfstream V that he bought online. (He still holds that Guinness World Record.)
By now, you’re likely familiar with at least a few of Cuban’s career highlights in the two decades since: NBA franchise owner-turned-champion (and perpetual thorn in the side of refs), Shark Tank host, actor, plausible inspiration for other fictional billionaires, and serial entrepreneur.
While his net worth tends to get most of the attention, however, Cuban cautions that it takes more than just three commas in the bank account to make someone an expert. “No one should ever take advice from me simply because of my net worth. Or from anyone because of their net worth,” he says.
Instead, it pays to look at their track record, where they started from, and perhaps most critically, how they’re planning, adapting, and evolving to meet present-day challenges. As Cuban says, you have to keep learning, and you have to do the work.
That’s why Cuban, 62, still spends the bulk of his time and energy reading, researching trends, and keeping himself prepared to spot the next big thing to add to his portfolio. In addition to foundational assets like the Mavs and Magnolia Pictures, his eponymous Mark Cuban Companies now includes lesser-known but rapidly growing ventures like generic drug company Mark Cuban Cost Plus, as well as more wholesome enterprises like Alyssa’s Cookies and Healthy Oatmeal Bites (more on that one in a moment).
Here, the billionaire answers 20 questions about how he’s planning to expand his business empire, along with his best advice to earn some extra commas of your own.
What’s the first piece of investment advice you gave to your kids?
The best investment is being a smart shopper. Buying something for a 20 percent discount is like earning 20 percent if and only if it’s something you have to buy, anyway. If you save 20 percent on your toothpaste, that’s 20 percent no matter how you look at it.
I’ve always been taught it’s a no-brainer to invest all you can in your 401(k) and Roth IRA as early as possible. If you agree, what are some less obvious investment opportunities should people take advantage of early on?
It is a no brainer. But the best investment is to pay off your credit cards. Investment returns—even tax free—have uncertainty attached to them. The interest rate on your credit card has zero uncertainty. After 30 days, you are paying a very high compound interest rate plus any attached fees. Pay off your credit cards first. Always.
What’s the most impressive cold pitch you ever received and what stood out about it?
I’ve received a lot. As a tech guy, it’s always about something that makes me ask, “Why didn’t I think of that?” But the one that stands out as the best was for Alyssa’s Healthy Cookies. The founder was basically living in his car selling his cookies. He cold emailed me about them and sent me samples. The first thing I always do for any food product is look at the ingredients and the nutrition label. Alyssa’s was low-cal, low-carb, high fiber, and zero added sugar.
So I was like, ‘What’s wrong with it?’ (laughs). I opened the package, expecting it to taste awful. It was amazing. Then I took it out of the package and the cookie fell apart. That was the problem they needed to solve. So, I had them turn it into smaller bites rather than a big cookie and Alyssa’s Healthy Oatmeal Bites were born.
Now we have chocolate, vegan, and more. They are crushing it. $20 million in sales, $10 million in cash profit. One of the best businesses ever. It’s just a matter of time before a smart food company grabs them!
Who’s the most impressive person you’ve ever personally interviewed for a job and what did they do to stand out?
I don’t know that there is one, but I really like candidates that are prepared. They know why I’m interviewing them. They know the company inside and out. They do the work. That tells me they know to always be prepared. The depth of their knowledge of the company and position tells me how hard they work. If you come in and think you can wing it with me, you have already lost.
From your experiences on Shark Tank, what subtle red flags do you look for that signal someone is a scammer or lying to you?
They make big bold profound statements, and then when I ask for data, they make circular references. Like, they’ll say, “There was a study at MIT that concluded XYZ.” I’ll always ask them for details on the study. Was it peer reviewed? Give me some data points. Then I’ll ask them common sense questions that I have picked up over the years. One of the all-time ridiculous go-tos of the supplement industry is to talk about the patent they have applied for.
They will make it sound profound: “We have a patent pending for this supplement,” trying to send the message that it must be important if it’s patentable. The reality is that all they do is change up the recipe for the formulation, which makes it patentable. It means absolutely nothing. It’s the trait of all hucksters.
What’s the most common way people tend to get fooled into making a bad investment and how can they avoid it?
They look at the resume of the person pitching them and assign more gravitas to it than they should. No one should ever take advice from me simply because of my net worth—or from anyone because of their net worth. Nor should they take advice because of a degree, or school, or where they worked. You always have to do the research and find out what’s legit or not. If you don’t have the ability to determine if it’s real, you have to find someone who does. Otherwise, you are just throwing darts against the wall.
What’s the most common piece of investment wisdom that you disagree with?
That you should diversify your investment portfolio based on allocations defined by “experts.” They often will tell you to invest in esoteric things the investor doesn’t understand. Things like, “Buy this Mutual Fund that invests in emerging markets. If you don’t know anything about emerging markets, you shouldn’t invest in it. And if someone tells you to rebalance your portfolio to try to reallocate risk or for whatever reason, again, always ask yourself what is it that you know or the person knows that gives them an edge?
You always have to do the work. Don’t make any assumptions. If you don’t feel like you can do the work, put enough money in the bank to be ready in case another pandemic-like black swan event happens. Pay off your credit cards and then just put your money in a low cost SPX Mutual Fund and never look at it until it’s time to retire.
In How to Win at the Sport of Business, you wrote about learning when to take no for an answer and move on. On the flip side, what’s a good indicator that someone might want to keep pushing?
When we—particularly entrepreneurs—have invested hundreds of thousands of hours in something, it’s hard to quit on it. But you also have to know when you can’t change the outcome. That’s when you move it. But if you can change the outcome, and you know you have done the work and it’s just a matter of time, then go for it!
What are going to be the most lucrative opportunities for innovation and advancement in tech over the next decade? (Put differently, what skills should young people be studying that will hold the biggest potential to pay off?)
Artificial Intelligence, building businesses based on smart contracts on ethereum and compatible platforms, personalized medicine—shit is changing fast. And the pace of change is accelerating. The key to being successful is to always be learning. Never stop reading and watching everything you possibly can. It’s truly possible to have a knowledge edge, but it takes investing thousands of hours and doing online classes and tutorials to get that edge. Most people aren’t willing to make that commitment.
You told us last year that the best investment you made was in yourself and in opportunities to learn. What’s something you’re pushing yourself to learn more about right now for business and/or financially-related reasons?
AI, crypto, and healthcare costs are the three things I’m focused on right now. The first two will enable significant disruption. The last, healthcare, is something I’ve been working on for five years—educating myself, funding studies, looking for ways to create disruption. One of the businesses I started was the CostPlusDrugs company. Healthcare is ripe for disruption, but it’s a slow process.
Is renting really a scourge on your savings versus buying property?
Not really. Renting allows you to be a free agent in your job and move anywhere in the world to take a job or start something. But as I have said many times, pay off your debt first. Live like a student until your student debt and other debts are gone.
If you were just starting out, would you bother with LinkedIn or do you feel there’s too much noise on career-oriented platforms to make them useful?
I would go anywhere and everywhere I could to connect with people, but I would also bust my ass to learn a new technology to the point where people considered me really, really, really good at them. Then I would look for a job in that space or look at starting a company there.
Besides your own book, what are a few of the best books you’d recommend everyone read to be smarter about money? (Feel free to recommend other media, too—podcasts, documentaries, etc).
The Only Investment Guide You’ll Ever Need by Andrew Tobias and How to Retire by the Age of 35— I forget the author. [Ed note: The book Cuban references is likely Cashing in on the American Dream: How to Retire by 35 by Paul Terhorst, which is out of print and unavailable at most online retailers. We recommend trying your local library system.] They were my go-to books when I got out of college and I still refer to them today. They gave me a path that really helped me.
The average person is carrying at least $40K in college loan debt and student loan debt overall recently hit a high of $1.5 trillion. Do you have any advice for doing a cost-benefit analysis when it comes to college/taking on student loans?
Do everything you can to not take on student debt. Go to a community college for your first couple of years. Sociology 101 or English Lit is going to be 99 percent the same and use the same textbooks at the community college down the street as at an Ivy League School.
Get good grades, live at home, get a job, save money, and then go to the cheapest state school you can. The goal is to get a job where you are getting paid to learn. Learn all you can at that job and be great at that job. When you are great at your job and you have that state university degree—like I do from Indiana University—then anything is possible.
Do you have any advice for negotiating a raise and ensuring you’re being compensated fairly and competitively? Let’s assume this person isn’t a naturally strong negotiator, and is shy about discussing salary.
Be great at your job. Reduce the stress of people around you. It’s amazing how when you do, getting a raise isn’t hard. It’s when it’s just a job that determining if your compensation is fair becomes hard. The other point is to always remember that you are a free agent and you can start negotiating with other jobs at any time. Always keep your options open. Always keep an eye out for your next job. If you are great at what you do, that next door will open easily. If you just show up to collect a check, nothing you do matters. You are going to be job hopping.
Speaking of negotiation, you’ve said that most people don’t take advantage of enough opportunities to negotiate prices down. Where do you think the biggest missed opportunities exist?
Just about everything. There is a cost for paying by credit card that is built into the price of products and services. Companies will pass those savings on to you.
You’ve said in interviews that bitcoin is better than gold. Can you explain how you’d advise a novice with only a basic understanding of the crypto market to approach it?
If you don’t understand it, put your money in the bank. If you are looking at gold, don’t buy it. Educate yourself on bitcoin and Ethereum and if you feel like you have a strong understanding of them and their pricing, then it’s okay to dip your toes in the water.
What’s one thing people should consider splurging on even when money is tight? (A nice suit, for instance, or some kind of premium/exclusive membership, etc.)
For me, it’s always nice towels. Fluffy towels after a bath or shower always makes things better.
Scott Galloway is fond of saying that it’s never been easier to be a billionaire, but never harder to be a millionaire. Do you agree with that assessment?
No. To have a B next to your name, you have to get lucky. Right now, like in the ’90s for me, the stock market is going nuts. Back then, it was internet stocks. Now it’s SPACs and low interest rates. The people who are reaching that level started their companies years ago. That’s what makes Scott wrong on this.
To be a millionaire, if you can sell and you can sell something for a company that pays you in stock, and your sales can help push that stock price up, then you can be a millionaire within 10 years.
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