"Rich is all relative" — When Shark Tank's Mark Cuban shared his tips to get rich the smart way

Mark Cuban, Shark Tank investor and entrepreneur, shared financial advice in an October 19, 2017 interview with Vanity Fair, where he discussed practical strategies to build wealth. He stated,

"Rich is all relative so there's certain things you need to do in order to put yourself in the best position to be rich."

His recommendations emphasize financial discipline, smart investments, and strategic spending. Cuban’s approach to wealth-building focuses on disciplined spending, strategic investing, and continuous self-improvement. His insights provide practical steps for individuals looking to strengthen their financial position over time.

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Shark Tank Mark Cuban’s smart strategies to build wealth

Live like a student and avoid debt

Cuban advised that maintaining a modest lifestyle is crucial, particularly in the early stages of a career. He explained,

"When you get that first job, that's really cool. I remember looking at cars and thinking I want this car. Fortunately, I kept my junker."

He suggested that delaying luxury purchases helps build financial stability. He also warned against credit card debt, emphasizing its long-term consequences.

"You shouldn't use credit cards. I remember bill collectors calling me every two minutes."

The Shark Tank investor recommended using a debit card instead to control spending and avoid accumulating high-interest debt.

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Build an emergency fund and invest strategically

Cuban highlighted the importance of having a financial safety net. He recommended saving at least six months' worth of income to prepare for unexpected situations such as losing a job, relocating, or facing financial difficulties. Regarding investments, Cuban suggested focusing on low-cost index funds, explaining,

"Then what I would do is probably put it into the cheapest SPX, that’s Standard & Poor’s mutual fund, that I could find."

He also mentioned cryptocurrency as a speculative investment but advised caution, suggesting that those willing to take the risk could allocate a small percentage, such as ten percent, into Bitcoin or Ethereum. However, he emphasized that individuals should approach this investment with the mindset that the money could be lost, similar to collecting art or memorabilia.

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Save money through smart purchases and negotiation

Cuban emphasized that purchasing essential items at a discount can yield significant savings. The Shark Tank investor noted,

"It's so hard to make a return on regular investments that you're better off when you see a sale. For instance, if we are hopefully using toothpaste every day, you're better off buying two years' worth of toothpaste when it's on 50% discount."

He pointed out that buying in bulk during sales results in immediate savings. Additionally, he advocated negotiating with cash for better deals. Paying in cash can provide leverage for discounts. He explained,

"If you're out and you're gonna take a yoga class and they want to charge you $30, say, 'Look, I got twenty.' You know what? They're gonna take it."

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Continuous learning and hard work

Mark Cuban emphasized the importance of education and lifelong learning. He explained his approach to reading by stating that if something caught his attention and he thought it could provide one valuable idea, he considered spending $30 for that idea a worthwhile investment to improve his businesses.

He recommended The Only Investment Guide You'll Ever Need by Andrew Tobias as an influential book, shaping his financial mindset. The Shark Tank investor also emphasized the role of effort in achieving financial success, stating,

"The one thing that you can control in life is your effort. Work hard."

He noted that financial strategies are important, but consistent effort remains critical to long-term success.

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Watch entrepreneurs present their business ideas on Shark Tank every Friday at 8 PM ET on ABC, or stream later on Hulu.