From taking risks to being a lifelong learner, here are some things that can help you improve your financial health.
A popular adage suggests, money makes the world go round. People are always looking to do better financially so that their lives can be more secure. To make that happen, some seek out the advice of millionaires—the ones who have been there, done that.
One such person is Mark Cuban. Cuban is well known for being an investor (or shark) on the hit American reality TV show Shark Tank. He made his first couple of millions by selling his computer consultancy firm MicroSolutions in 1990 for US$6 million, and his financial life has been on the upswing ever since. Cuban has been generous with advice and input on how others can get where he is. And so, we have compiled a list of the top five tips you can follow to join the millionaire club alongside Mark Cuban.
Take a healthy amount of risks
Cuban believes that making money and risk-taking goes hand in hand. According to him, the only way to save millions of dollars is if you are willing to invest your savings. This entails investing in the financial markets as well as your business or your education.
He says, “If you’re prepared and you know what it takes, it’s not a risk. You just have to figure out how to get there. There is always a way to get there.” In other words, putting your money into your business or education isn’t as risky as you think it is. This is especially true if you know what you want to accomplish and have a healthy number of safeguards to ensure that happens.
Know your risk appetite
When investing in the financial markets, Cuban advises keeping risky assets, such as cryptocurrency, limited to 10% of your investment portfolio. “But if you do that, you’ve got to pretend you’ve already lost your money,” he says. Alternatively, he warns against making any financial moves if you don’t understand the risks associated with them. Don’t rush into buying or selling stocks based on market conditions; instead, just wait and try to learn whether the stock has been mispriced.
In life, you control how much effort you put in. So, Cuban encourages people to take time out to learn about new developments in tech, sports, healthcare and finance. Learning gives you a competitive edge that can help you succeed in the long run. Over the years, Cuban has studied many different things, from Python to artificial intelligence and machine learning. He also reads four to five hours a day from a wide variety of sources.
Save as much as possible
The next big piece of advice Cuban has to offer is to make consistent efforts to save money—in tandem with our first point. He firmly believes in being a smart shopper and buying in bulk. For the average person, it is much easier to cut down on your expenses than figure out the inner workings of the stock market. Bulk buying always gets you some sort of discount which can help you reduce your overall expenses. So, if buying something is an absolute necessity, such as toothpaste or soap, you can do so in bulk and avail yourself of a discount.
He also mentions that you should have at least six months of your salary saved up. This gives you a cushion to fall back on in case you want to leave your job, get fired or anything else untoward happens.
Don’t use credit cards
Another thing that Cuban recommends for an average Joe is not using credit cards. “If you use a credit card, you don’t want to be rich,” he shares. He explains that the interest rates on credit cards are so high that people are better off avoiding them entirely.
If you have a credit card, make sure to pay it off as soon as possible. He even goes as far as to say that people should cut up or burn their credit cards after paying them off.
That said, there are ways to responsibly use credit cards, and they can even have a lot of benefits. This includes cashback, one-time bonuses for signing up for a credit card service, reward points and coverage in case of fraud. So, although Cuban advises against it, it might be worth using a credit card if you do so responsibly. The sheer number of benefits to using credit cards should tell you that, though Cuban’s advice works for him, it might not be something everyone can accomplish or would even choose to follow.
While you can try to implement one or more of these tips into your life, probably the easiest ones to start with are becoming a smart shopper and saving as much money as you can. Doing so should set you up to face any hardship, if not make you a millionaire.
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Header image courtesy of Envato.