Keep cash on hand
In his post, Cuban says the first step to getting rich is to stop spending. He advises cutting up your credit cards, going so far as to say, “if you use a credit card, you don’t want to be rich.” Cuban’s right to discourage people from leaning heavily on credit cards for day-to-day expenses, but when used correctly, they can also be a great way to maximize your spending power. The trouble is many people don’t use their cards correctly.
If you don’t pay your balance in full each month, you could pay upwards of 20% more for your purchases. But if you manage to close out your full balance in one payment cycle, you can take advantage of credit card cash back offers, rewards and discounts on purchases. And you’ll also be working to build your credit score.
But at the core of Cuban’s tip here is solid financial advice: spend less than you earn and save as much as you can. From there, he suggests sticking your savings in 6-month CDs so your cash is handy whenever you need it.
“You aren't saving for retirement. You are saving for the moment you need cash,” Cuban writes. “Buy and hold is a sucker's game for you.”
Watch your money grow while you sleep
Learn a business
"The second rule for getting rich is getting smart," Cuban writes. By this he means learning the ins and outs of a business you truly enjoy. "Find the one you love the best and get a job in the business that supports it."
According to Cuban, you should wait for "times of uncertainty and change in your business" so you can pounce. This could be tomorrow, decades from now or it could be never.
If your moment does come, what exactly you’re supposed to do is anyone's guess. Cuban only says that you’ll know because you know your field so well: “You will be ready because you will have been saving up for this moment in time.”
How to actually get rich in 2 simple steps
Cuban's get-rich strategy may work for some but it hinges on the hope that you'll hit a home run on a well-timed opportunity. Perhaps some like the gamble, but there's a more sure path to riches.
Step 1: Save
Cuban got this part right: To get rich, save as much as you can. This may mean missing out on things today, like an annual vacation or having to make some tough choices when it comes to your 11 streaming services — but if your goal is future wealth, saving is the best initial action to get there.
And when it comes to saving, remember that not all accounts are created equally. If you want to keep your cash handy, in addition to CDs, you should consider finding the high-yield savings account. The interest rate on a traditional savings account could be as low as 0.01% a year, while the best high-yield savings accounts can be found with up to 5% APY. Put your money somewhere it’s going to continue working for you rather than sitting stagnant.
Keeping your money in cash might make it possible for you to pounce on potential opportunities as they appear, however you’re also missing out on other chances to grow your funds.
Step 2: Invest
If you really want to see your money grow, consider jumping into the stock market. Cuban may consider buy-and-hold a “sucker’s game,” but plenty of people have made themselves rich on that strategy — Warren Buffett included.
The tech-heavy Nasdaq, for example, has enjoyed an average annualized return of 10.4% for the past 30 years, while the S&P 500 gained a cumulative 875% over the same period.
Yes, there will be down periods where some years you’re likely to suffer losses. But if you’re investing with your long-term future in mind, that also provides savvy investors with opportunities to snatch up extra shares at basement prices.
Investors who bought a Nasdaq composite index fund 40 years ago have seen a return of 4,198%.
That being said, there’s no definitive recipe to get rich quick, whether in this summary or via Cuban's strategy — even Cuban warns there’s no such thing as a shortcut to building your wealth. But at least with regular investing in the stock market, long-term returns are more reliable.
Kiss Your Credit Card Debt Goodbye
Millions of Americans are struggling to crawl out of debt in the face of record-high interest rates. A personal loan offers lower interest rates and fixed payments, making it a smart choice to consolidate high-interest credit card debt. It helps save money, simplifies payments, and accelerates debt payoff. Credible is a free online service that shows you the best lending options to pay off your credit card debt fast — and save a ton in interest.