Mark Cuban on How to Get Rich

[mikesabat]

A somewhat relevant story. 3 months ago I started saving and researching Costa Rican real estate. I figure that over the next two years a lot of people will be having a cash crunch and it will be a buyer's market in (somewhat over-built) Costa Rica.

Right now I'm not where I need to be in terms of savings or knowledge, but in 10-16 months I will be.

The interesting thing is that I have started talking to agents in CR and I can almost see things beginning to unfold. The people I'm talking to start throwing "deals" at me. It starts like "I know this may be a little soon, but I may have the perfect rental property for you" says the real estate agent. "It's $225, if you can bring 80k to the table the selling can finance the rest over 5 years"

"Sorry, not interested. I'm just not ready, I need to do more research" I say.

"Hi Mike, I spoke with the seller again. He can bring the price down to $200k, with financing over 10 years."

I say again that I'm about 18 months away from pulling the trigger.

The agent comes back with "We can probably go under $200k finance for 15 years (at about 9%) and we can furnish the place for you - a 12-15k value."

Now I don't (yet) know if this is a good deal or notbut it is pretty easy to see the leverage working here. Because I'm on the right side of the market I can throw out a low offer and see what happens. I'm not going to.

Hopefully in about a year, I will be walking in and everyone else will be running the other way, needing to sell.

I understand that everyone @ hacker news is smart enough to "get" this, but it is cool to see this in action.

[jraines]

my apologies -- I originally read that as "not everyone" and took it as odd misplaced arrogance. But it was a reading fail. Definitely deserve those downvotes.

[tortilla]

Do you plan to move there? I'm thinking about this too :)

[jraines]

Not everyone on hacker news is cool enough to use scare quotes around a word that is used in a commonly accepted sense.

[prakash]

Mark gives good advice.

1. Have the discipline to save

2. Find an area you are passionate about and invest in yourself to become really really good

3. When the opportunity presents itself, make good use of it

“Luck is what happens when preparation meets opportunity.” Seneca

[immad]

Another strong point he makes is that you can find the right opportunity during times of uncertainty and change in markets (such as now).

[condor]

Besides what is mentioned, I find it interesting what's not mentioned: no lottery, no shotgun approach, no throw 10 different things against the wall and see what sticks.

[noor420]

We should make a post with collection of advices on 'how to get rich' from people who actually are rich, like Cuban.

Maybe a collection of blog posts?

[pkrumins]

"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"

and

"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"

That's what I have been constantly telling everyone. Be passionate about what you do and don't waste your time on anything else than your passion.

[vaksel]

its not like it'll hurt you. If your business is created around your hobby you'll get a lot more satisfaction out of it. And if you are passionate about something you'll be more successful

[cardmagic]

"If you use a credit card, you dont want to be rich"

That is such an over-statement. You've got to spend money to make money. Using credit wisely might be the only way for some people to break out of their financial status.

[jobeirne]

Good point.

Using a credit card is important to establish credit. What's more important is NEVER GETTING INTO DEBT.

[ojbyrne]

1. Get a job 2. Save money. Wow, what insight. Though I think this could also be titled "How to Get Diabetes."

[fallentimes]

3. There are no shortcuts (here's to you MLM slimers) 4. Know your business inside and out 5. Read about your business every day (i.e. become the smartest guy in the room) 6. Cash is king 7. buy & hold without flexibility is for suckers 8. be patient

[prakash]

You are confusing simple with easy.

[qqq]

his arguments that there aren't shortcuts are good (not original, but still good).

[xiaoma]

I'm not quite sure what his problem with "buy and hold suckers" is. Benjamin Graham and Warren Buffet both built financial empires by doing just that. Peter Lynch didn't too too badly, either. As of now, the only investing strategy which consistently beats the market in the long run is long-term value investing. The technical traders, such as Cramer may do well over 5 or 10 year stretches, but they inevitably have their melt-downs that wipe out everything.

When the market takes a dive, "buy and hold suckers" just keep buying. This leads to dollar cost averaging benefits that lead to even greater long-term market outperformance.

Everything else in the post struck a chord with me. It seems that discipline is king.

[nostrademons]

He and Buffett/Lynch are talking past each other. Buffett's strategy has always been buy & hold, but only buy when the price is right. So in the tail end of a bull market (like what we got in 06-07, or 97-00), he just refuses to invest and holds the cash income his stocks churn off instead. So when the market turns downwards, he has plenty of cash to invest.

Mark Cuban's referring to the suckers who believe in putting every dollar they have into the stock market, whether it's high or low. Those people end up with no cash when the market turns down, so they can't take advantage of the opportunity.

[rms]

btw I recall an interview with Mark Cuban saying he answers about 5% of cold emails containing businesses/business ideas. Give him a try...

[ivankirigin]

If you have the remotest way to get someone he knows to tell him about your idea, do that instead. Generally, cold emails & calls mean much, much less than a personal introduction.

[mamama]

Mark Cuban on how to become an innumerate tool: http://bramcohen.livejournal.com/35949.html?thread=516461.

[nihilocrat]

Hey, I remember reading that post (I subscribe to Bram's blog). I had never heard of Mark Cuban before, so I ended up only remembering him because he is terrible at writing.

[fallentimes]

Hilarious, but it's hard to be right all the time.

[Mistone]

"Busts are when rich people started on their path to wealth." very timely.

its the people that are up and running when it turns that appear "lucky", when in reality they had been building during the downturn.

[redorb]

my aunt and other rich people i know always shared 'pay yourself first' , my aunt and uncle used that money (after 5 years) to get bonded in order to build their first stadium.

[utnick]

what do you mean 'build their own stadium'?

[Fuca]

The most valuable lesson here is: persevere in doing what you like and you will succeed.

[Allocator2008]

Diversify and hedge. Name of the game. People I work with have seen their 401K's eviscerated. Mine is more or less OK, because it is "heavily weighted" into money markets, which are safer than equity markets. The "rule of thumb" for people in their 20's and 30's is to have 70% of the 401K in equity markets. I didn't follow that, and instead reduced my position in equities and increased my position in money markets, when it came to my own 401K. Now I am more or less OK while my collegues are scrambling to sell.

[johnrob]

You're never going to get a good interest rate in money markets. Sure, safe havens are looking good over the past 12 months - but the stock market is going to kill them in the long run.

Some people try to time the market, shifting their assets between safe and risky. However, doing this involves both the labor of research and the risk of being wrong. You're probably best off in the long term if you just stay with the market. Unless you want to spend all of your time doing financial research, in which case you can probably increase your std deviation (but not your expected return).

[LPTS]

401K? To get rich. Fuck that shit. How about: "Never work at a job with a 401K!" as a rule for how to get rich. Since your alternatives will then be to be poor and miserable or get really rich, you will be more motivated.

Personally, I'd shoot myself in my head if I ever caught myself thinking about protecting my 401K between money markets and equity markets. Figure out something meaningful. Name of my game. Hoarding biosurvival tickets earned working like some chipmunk trying to survive an endless winter that will inevitably kill them, so that you can enjoy the fleeting illusions of stability and more prosperity than your neighbor before your body turns to the same worm food theirs does seems a really shitty way to respond to finding yourself alive on this planet with a good mind and a brief window of autonomy where you might do something really meaningful.

[time_management]

Question : Why have I heard of this guy? Really, why?

[fallentimes]

Sold grocery bags as a kid, sold a small computer company to make his early millions, owns the Dallas Mavericks, flipped Broadcast.com to the boners at Yahoo.com for billions, started HDNet, owns various movie production companies and distribution channels, helped produce the movie The Smartest Guys in the Room (awesome movie about Enron), ran and sold a hedge fund, angel investor in many many things, prominent blogger, and most recently made a godawful awful trade for the unbelievably overrated Jason Kidd.

[icey]

A) Because he's such a mavericky maverick that he actually OWNS the Dallas Mavericks

B) Before that, he made a bunch of money in software.

C) I'm fairly sure there is some rags-to-riches tale in here as well.

[vaksel]

because he went from nothing to become a billionaire.

[iamdave]

He owns the Dallas Mavericks basketball team. Hence the blog name.

[sabat]

His accomplishments aside, I agree. Just because you've had some success doesn't mean you actually have anything to say to the world.