When Mark Cuban gives out money advice it would be wise to pay attention. Bro went from barely being able to afford college to a net worth of somewhere around $3.2 billion.
So when he sat down with Entrepreneur magazine to give out some financial tips, you’re damn right I am going to pay attention.
The first tip he shared that ISN’T one his three “money moves to make” had to do with investing. His advice was just two words: “Don’t invest.” Instead, he suggests doing the following three things, if you are in a financial position to do so…
1. Buy in bulk.
“Do a budget and look at the things you buy repetitively and then go and buy those things in bulk,” Cuban says. “Stuff you’ll need all year, like toothpaste, shampoo and soap” are among the non-perishable personal care items he suggests stocking up on to save money.
“As long as you’ve got a little room under your bed,” he says, “if you buy a year’s worth or even two years’ worth of toothpaste, you’re going to get a 50 percent discount. If you save $1,000 a year doing that, that’s more than you’re going to earn on $10,000 in investing.”
While agree that this is solid advice, does anyone here imagine Cubes stuffing toothpaste, shampoo and soap under his bed? Fun to think about though.
2. Stash six months of income in the bank.
For most people, Cuban admits, six months’ worth of “income in cash in the bank might not be that much,” not compared to his envy-worthy nest egg at least, but he feels that just knowing it’s there “for a rainy day” can provide some peace of mind. “I know it doesn’t earn much in the bank,” he says, “but you’ll sleep a lot better.”
I like how he thinks that our six months’ worth of income “might not be that much.” Because he’s right, but it’s still funny.
3. Pay off your debt.
Cuban says the single best thing you can do for your bottom line is to pay off your credit card debt. Better yet, never rack up a penny of it in the first place. “Credit cards are the worst investment,” he says, “unless you pay them off every 30 days. Even then, don’t do it.” Like the rest of us, he wishes someone would have told him that when he was in his 20s.
Another piece of advice that is 100% true. Unfortunately if we had enough money to stash six months’ worth of income away then we probably wouldn’t be using credit cards in the first place.
That being said, he’s not wrong when he says that “financial debt is the ultimate dream killer” because once you are in debt you no longer have as much flexibility to do the things you really want to be doing.
Read the rest of the interview where expounds on these tips and more over at Entrepreneur.