Mark Cuban's best investing advice: 'Don't'

Rubicon Venture to Mark Cuban on Startups

Billionaire Mark Cuban doesn't mince words.

When Entrepreneur asked him on the set of "Shark Tank" for his best advice to make money investing, he replied: "Don't."

"The market could go up for years, and you could think you're well off," he told Entrepreneur, "and then, in a millisecond with high-frequency trading, a flash crash can take it all away. That's why you want to have that money in the mattress, that savings, so you're protected in case something goes wrong."

The "money in the mattress" he's referring to is a six-month emergency fund that he recommends everyone gather. Experts advise keeping three to nine months' worth of living expenses in an easily accessible, untouched account in case of an emergency. "I know it doesn't earn much in the bank," Cuban told Entrepreneur, "but you'll sleep a lot better."

Mark Cuban's best quotes on business:

Mark Cuban business quotes
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Mark Cuban business quotes

#1: "I still work hard to know my business. I'm continuously looking for ways to improve all my companies, and I'm always selling. Always."

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#2: "When you've got 10,000 people trying to do the same thing, why would you want to be number 10,001?"

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#3: "Because 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."

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#4: "Go out there and get rich. Get so obnoxiously rich that when that tax bill comes, your first thought will be to choke on how big a check you have to write."

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#5: "​In the past, people used to tell me to shut up a bit. But what I believe is to put out your opinion and let everyone else react. If I'm wrong, I'm wrong."

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#6: "I've learned that it doesn't matter how many times you failed. You only have to be right once. I tried to sell powdered milk. I was an idiot lots of times, and I learned from them all."

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#7: "Work like there is someone working 24 hours a day to take it all away from you."

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#8: "Forget about finding your passion. Instead, focus on finding big problems."

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#9: "It's not about money or connections -- it's the willingness to outwork and outlearn everyone when it comes to your business. And if it fails, you learn from what happened and do a better job next time."

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#10: "What I've learned is that if you really want to be successful at something, you'll find that you put the time in. You won't just ask somebody if it's a good idea, you'll go figure out if it's a good idea."

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However, Cuban's investing advice isn't the same given by most financial pros. While the consensus is that the ordinary person shouldn't take on undue risk in order to try and "beat the market," most agree that some exposure to the market, at the very least in the form of retirement accounts, is necessary to keep your money growing fast enough to beat inflation.

Low-cost index funds (a type of mutual fund pegged to a specific market index) are also regularly recommended by some of the wealthiest people around. Experts such as Warren Buffett, Charles Schwab, John Bogle, and Charlie Munger agree that low-cost index funds are the best way for the average person to invest.

"A low-cost index fund is the most sensible equity investment for the great majority of investors," Buffett told Bogle in "The Little Book of Common Sense Investing." "By periodically investing in an index fund, the know-nothing investor can actually out-perform most investment professionals."

Whether you feel comfortable investing, Cuban's advice on putting together an emergency fund before making any other major decisions with your money is echoed by most experts. Looks like it's time to start saving.

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