Mark Cuban: 5 Genius Things All Retirees Should Do With Their Money
Unless you’re banking serious money from your investments, every retired American should be trying to outlast a nest egg that is getting depleted every day by the rising cost of, well, everything. Whether you’re nearing retirement or have been retired for some time, it’s a smart move to keep up with what the most successful people in the world have to say about making the most out of your money.
Many would-be tycoons look to outspoken businessman, entrepreneur and financial personality Mark Cuban for tips on getting rich. However, a lot of Cuban’s advice throughout the years is applicable to everyone, from those starting their work lives to those done with them.
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Here are five brilliant pieces of advice from Cuban that are simple and perfect for the average person looking at what to do with their money in retirement.
1. Spend Shrewdly
Cuban’s been rich for many years, but he believes learning smart spending when he was “eating mustard and ketchup sandwiches” stood him in good stead to build wealth later in life. More importantly, it developed discipline. Posting on his Blog Maverick way back in 2008, Cuban explained that to become rich, you've got to have discipline in how you spend your money.
“If you can, you will quickly find that the greatest rate of return you will earn is on your own personal spending. Being a smart shopper is the first step to getting rich,” he wrote. For Americans who feel they’ve earned the right to spend freely in retirement, there’s still value in living frugally and spending wisely.
2. Cut the Credit Cards
Of course there’s “good” debt – the kind you use to grow meaningful personal or financial goals and gains. Credit card debt is the opposite of that. Interest rates are outrageous, so unless you are strict with paying off balances every single month, carrying over balances is a stressful way to live. If you have any lingering high-interest debt to your name, get rid of it ASAP.
Credit is a trap at any age. For those on fixed incomes, paying off growing interest and balances with a yearly raise or bonus isn’t an option. Speaking to Business Insider, Cuban said, “Credit cards are the worst investment that you can make. That the money I save on interest by not having debt is better than any return I could possibly get by investing that money in the stock market.”
3. Cash Is Still King
In an increasingly digital world, cash is king for many people, including Cuban.
“The first step to getting rich is having cash available,” Cuban quipped on his blog. “You aren’t saving for retirement. You are saving for the moment you need cash.”
Cuban suggests saving at least six months worth of income before investing. It’s good advice for both workers and retirees, for different reasons. For seniors, having instant liquidity to deal with unforeseen expenses means not having to sell investments or take on debt.
4. Keep Investments Low-Cost, Low-Risk
For the experienced (and well-funded) trader, there’s no harm in continuing a winning streak. However, rather than trying to guess which individual stocks will perform well, most retired persons are better off buying passive index funds or exchange traded funds (ETFs). Cuban has said regularly over the years that one of the best investments you can make is a cheap S&P 500 SPX fund (after you’ve paid off your credit cards!).
When you hit a certain age, the better investment is one that provides broad market exposure with fewer decisions and fewer fees. They often make sense for investors who want broad market exposure and the ability to focus their time elsewhere.
5. Don’t Rest in Retirement
With his wealth and love of life and self-discovery, Cuban is in the enviable position to work as much or as little as he wants. He doesn’t plan to retire anytime soon, telling CNBC Make It, “I’m just getting started. There’s no retirement in my book. I’ll go until I drop.”
Retirees don’t have that luxury. However, like Cuban, they can invest their time in themselves and remain active and inquisitive. Becoming knowledgeable about your money and developing interests that may provide a bit of income on the side are healthy retirement pursuits, too.
Not to downplay Cuban’s financial acumen – he has great instincts and a track record that speaks for itself – but his philosophy has depended on simplicity and discipline since day one. Finding inspiration in the mundane is a smart money lesson for people of any age, and retirees in particular.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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