When you want to get rich (or at least become well-off financially), doesn't it make sense to listen to someone who's there now? I think so. So it's probably worth at least a bit of time to stop and listen what billionaire Mark Cuban has to say about how to get rich, isn't it? Yep, I think so.
Now he admits that there are many paths to wealth and he offers one. In addition, it's find-your-own-business in nature and may not be for everyone. The basics are 1) get money, 2) get educated, and 3) hit the right opportunity. Let's start with how he suggests we all get money:
So what should you do to get rich? Save your money. Save as much money as you possibly can. Every penny you can. Instead of coffee, drink water. Instead of going to McDonalds, eat Mac and Cheese. Cut up your credit cards. If you use a credit card, you don't want to be rich.
If you can, you will quickly find that the greatest rate of return you will earn is on your own personal spending. Being a smart shopper is the first step to getting rich. Yeah you have to give things up and that doesn’t work for everyone, particularly if you have a family. That is reality. But whatever you can save, save it.
Hmmmm. This sounds really, really familiar. I wonder where I've heard it before. ;-)
Now let's move on to getting educated:
The 2nd rule for getting rich is getting smart. Investing your time in yourself and becoming knowledgeable about the business of something you really love to do.
Before or after work and on weekends, every single day, read everything there is to read about the business. Go to trade shows, read the trade magazines, spend a lot of time talking to the people you do business with about their business and the people they buy from.
This is not a short term project. We aren’t talking days. We aren’t talking months. We are talking years. Lots of years and maybe decades. I didn’t say this was a get rich quick scheme. This is a get rich path.
If buying/building your own business is the path to wealth you want to take, then I agree 100% with his advice. If not, you can still invest and become educated in a way that will profit you. I call it making the most of your most valuable financial asset.
Cuban continues:
Now you wait for times of uncertainty and change in your business. The time will come. It may come quickly, it may take years and years. But it will come. The nature of our country’s business infrastructure is that it is destined to be boom and bust. Booms are when the smart people sell. Busts are when rich people started on their path to wealth.
You will know when that time is here for you because you will know your business inside and out. You will be ready because you will have been saving up for this moment in time.
Again, it's pretty grow-a-business focused. But you can do the same thing with a career. There will be times of opportunity that appear over the course of a career. If you seize and make the most of them, you can rise quickly in both responsibility and pay. Look for those times of change to make your move and jump on the opportunities when you think you can make a difference. If you deliver, chances are you will be well-rewarded for it (because you will deserve it).
Someone I know, but haven't seen in years, taught a class Cuban took in college. I recall him telling a story about how Cuban walked in halfway through an exam, because he was at a party the night before. Might have been a rugby party. Anyway, I also recall him saying that Cuban was an exceptionally bright guy.
What I'm getting at is that Cuban is a risk taker. To be super rich - as he is - goes beyond saving. Many of us can save. Its the part of investing time in oneself and increasing knowlege of the business in which you're involved - along with competitiveness, drive and risk taking - that can help someone get to where he is.
Not that its easy, or that simple. But, I can safely say that saving and watching pennies is great for building wealth as a middle class person, but not for getting to where he is.
Anyway, interesting post, and who am I to argue with a guy worth billions anyway:)
Posted by: Squirrelers | May 18, 2010 at 10:51 PM
Kinda funny that you posted this as I just started reading the book "Rich Like Them", in which the author literally just walks around to different rich neighborhoods across the country, knocks on their doors, and asks to interview them on how they achieved such wealth.
I agree with squirrelers, that most of the time, to be super rich, it goes beyond saving. Great points nevertheless!
Posted by: myfinancialobjectives | May 19, 2010 at 10:32 AM
I think Nicholas Taleb said "The difference between the guy who drives the BMW and the guy who flies in the G5 is luck." To be super rich, often goes far beyond saving and working hard. Right place, right time, right skills.
Posted by: Tyler | May 19, 2010 at 10:37 AM
This is a great post, because it offers great whispers of wisdom. I think his first point on saving is an important one, because being a smart shopper and spender is what keeps the wealthy that way. Besides when you hear of all the celebs in piles of debt or filing for bankruptcy - points 1 and 2 are what leads to their downfall.
Posted by: KP | May 19, 2010 at 11:09 AM
I'm glad he highly suggests savings. I don't think we'll ever be super rich based on the careers we've chosen, but we are and will be well off if we continue to save aggressively. That's what I'm aiming for at least.
Posted by: Budgeting in the Fun Stuff | May 19, 2010 at 12:27 PM
His argument for "saving" is so you have capital to take risk when opportunity presents itself. This is slightly different than the diligent save to retire. From what I know of Cuban, I doubt he would be a strong proponent of the save for years, earn 5%, and retire camp.
"Takes money to make money"
"You gotta spend money to make money"
These sayings seem to better represent his argument for saving.
Posted by: Tyler | May 19, 2010 at 01:46 PM
I like the saving money tips. Drink water, not coffee. I take that to mean you should avoid places like Starbucks. Love it! :)
Posted by: Jason | May 19, 2010 at 09:31 PM
Interesting reading with some good points to become rich very slowly. There are vast amount of knowledge out there on how to become rich the smart way. Becoming rich is a trade just like being a carpenter or being an engineer. If you do not know the trade you cannot become rich. Knowledge is wealth.
Posted by: Millionaire Knowledge | May 20, 2010 at 03:31 AM
>To be super rich, often goes far beyond saving and working hard. Right place, right time, right skills.
It sounds to me as if Cuban recommends setting yourself up to take advantage of the right place, time, and skills... It seems to me that would be a great improvement in the odds.
-Rick Francis
Posted by: Rick Francis | May 20, 2010 at 11:38 AM
I disagree with the "wait for times of uncertainty" part. If you're going to succeed in business, you have to be the force of change rather than only react to changes. Regardless of whether there is uncertainty in the field, you should be able to be creative enough to provide some differential advantage at all times. Maybe that just goes without saying...
Posted by: mrm | May 20, 2010 at 10:24 PM
Thanks for the link, FMF. ïve read some blog posts by Mark Cuban that were nothing short of amazing (especially the one where he tells the story of his early career).
Posted by: Concojones | May 23, 2010 at 10:23 AM
Becoming rich begins in always believing yourself and believing that you can achieve your goal. You need to have a positive mindset and outlook in life. Avoid any distractions and stayed focus in your goal because if you will not take it seriously then nothing will happen.
Posted by: Caolan Patrick | December 22, 2010 at 01:28 PM