Shark Tank personality Mark Cuban didn’t start out rich. He grew up in a middle-class family in Pennsylvania and sold garbage bags for money as a kid.
But now, with an estimated net worth of at least $5.7 billion, it’s fair to say that Cuban has done well for himself.
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Cuban’s wealth didn’t happen overnight. After college, he found a job with Mellon Bank. Cuban later moved to Texas, where he worked in software sales before starting a company he eventually sold before moving on to other successful ventures.
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In his 30s, Cuban bought a controlling stake in the NBA’s Dallas Mavericks. And he’s since continued to invest in a host of profitable businesses, including his somewhat recently launched Cost Plus Drugs.
Because Cuban worked his way into wealth, he knows what it takes to build up a substantial net worth. But his tactics may not sit well with everyone.
Mark Cuban has tough advice for growing wealth.
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Americans have a long road to becoming wealthy
A 2024 Schwab survey found that Americans think it takes $2.5 million to be considered wealthy. But as of 2022, the last year for which the Federal Reserve has data, real median net worth was only $192,900 among U.S. households.
Even the less broadly representative average net worth was $1,063,700, which is well below the $2.5 million Americans think signifies wealth.
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The reality is that in this age of rampant inflation, an estimated 25% of U.S. households are living paycheck to paycheck, according to Bank of America. And while consumers are being more generally cautious with their spending due to higher costs, it could take a serious shift in habits and mindset for the typical American to attain financial stability, let alone wealth.
Mark Cuban says frugality is the key to being rich
Mark Cuban had to make sacrifices in life in order to become wealthy. And he says that growing wealth isn’t just a matter of hard work and savvy investments.
Rather, Cuban insists that living frugally is the key to becoming rich over time. As he once said,
“Save your money. Save as much money as you possibly can. Every penny you can.”
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Cuban’s advice might sting for people who are loath to give up some of their favorite luxuries.
But Cuban has famously said, “Instead of coffee, drink water,” in the context of telling people how to build wealth. So he’s clearly a fan of cutting out all non-essential spending and banking as much money as possible.
Whether that’s a reasonable approach for the typical American, though, is debatable. The reality is that while Cuban’s advice does have merit, it requires an extreme approach to spending and budgeting that many people don’t want to take.
But there’s an important lesson to be learned from Cuban, and it’s that saving money and growing wealth starts with self-control.
As he says, “The first step to getting rich requires discipline. If you really want to be rich, you need to find the discipline.”
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That’s not a bad takeaway. Despite the number of people living paycheck to paycheck, many consumers spend money on discretionary items regularly. Cutting back on extras and banking the difference could lead to long-term wealth, especially when money not spent is invested for added growth.
Of course, it’s easy to argue that drinking water instead of coffee won’t make much of a dent in the long run. But to Cuban’s point, it could easily result in $100 per month of savings.
Investing $100 per month in a stock portfolio that produces a yearly 8% return could result in roughly $310,000 over 40 years. That’s 1.5 times the median retirement savings among Americans aged 65 to 74. And while it’s still a far cry from $2.5 million, it’s a step in that direction.Â
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