I just finished watching an interview with Entraprenuer Mark
Cuban. Many people say they hate him
because he doesn’t follow the rules.
Shark Tank has changed some of that.
Mark Cuban is most famous to lay people as the owner of the Dallas Mavericks. He’s owned and sold several technology
companies and that is how he made his first billion dollars. Mark was an entraprenuer from a very young
age starting with a stamp collecting.
I presonally like maveriks (perfect name for a team he owns)
like Mark Cuban. I don’t just like his
attitude towards investing, I like his attitude towards life and problem
solving. One thing I find refreshing
about Mark is that you will hear advice that actually works. You can watch youtube videos where Mark calls
people who divresify idiots or morons.
That’s really true, if you are diversified it means you have no idea
what you are investing in. You can not
be an expert on several fields, not enough time in the day. People want to say they invest like Warren
Buffet. Really? So you can buy the majority share in a
company and take a seat at the head of the table when it comes to company
decisions? Nope, you can’t. I agree with Mark on diversification, on
value investing, on buy and hold. They
are all bullshit with some forms of value investing still applicable for us
people worth under a billion dollars.
We all need mentors in life and with the invention of books
and now the internet our mentors don’t even need to be physically in our
presence although I think personal mentors would be best. I’ve never had a personal mentor, but why
should that stop me. Mark is a good
business and investing mentor.
Marks advice for people who have $50k in cash a number he
threw out:
My Tip for those of you who don’t have $50k in cash: Save a
months salary first. Pay off all debt or
at the very least credit card debt. Save
$50k and put the practices below into action. Don’t stop there, keep saving and buying fire
sales.
1.
Pay all credit card debt off. If you are paying on credit card debt your
interest rates are likely high somewhere above 10%, if you pay it off you’re
saving 10 to 20% of your money.
***My Tip: If you have multiple cards pay
off the lowest balance first and when that is paid use the money you were
applying towards that lowest balance and do the same with the next lowest
balance.
2.
Use cash to buy value on your consumables. Buy all your toothpaste, toilet paper, soap,
detergent etc for the year. You can
negotiate price on bulk purchases to get a better deal. You’ll be avoiding inflation by buying a
product which will inflate in price throughout the year. You’ll be avoiding taxes on money you’d make
from investing for capital gains.
***My Tip: Make it your goal to see how low
you can get your products buy buying bulk.
Don’t just look at Sams and Costco, look on the internet, talk to store
owners about buying bulk, think about an extra freezer and buying all your meat
from a local farmer for the year. Use
your imagination.
3.
Keep cash on hand (dry powder) for great
opportunities. Remember some famous
stock market crashes when the world would never be the same? Remember people jumping out of stocks at any
price? Remember how the markets go back
up and make a lot of people rich? Do you
realize that most people invest at the top and sell at the bottom?
***My Tip: When you are most scarred to
invest, when it seems like the market may never recover, buy! Buy when others are getting out. Sell when everyone is getting in. Simply invest based on human nature. Mark buys calls and puts in the index
funds. You can simply buy an index fund
when everyone hates stocks and is in panic mode. Sell when everyone is happy to be in stocks.
The interview I’m talking about was in 2011
with WSJ.com.
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