Why Mark Cuban Still Keeps a Strict Budget Despite His Wealth
It may be a bit surprising, but it's a fact that more billionaires are self-made than legacy heirs. Less recognized is the fact that many of the world's richest people stick to ordinary financial routines, possibly remembering how difficult it was to achieve the phenomenal level of success they enjoy now.
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With a net worth of $6 billion, Mark Cuban knows the importance of having a solid financial plan. He has made a lot of smart investments during his lifetime, including the NBA's Dallas Mavericks, which he bought for $285 million and later sold the majority stake of for $3.5 billion. Of course, he's also a shark on ABC's "Shark Tank."
And according to him, it's budgeting that keeps the wealthy like himself wealthy.
He's All About the Budget Strategy
When asked by GQ about the turning point from being successful millionaire and an ultra-successful billionaire, Cuban conceded there is a huge difference when you jump wealth levels. But in the day-to-day, Cuban still does a lot of things he was doing when he was a novice small business owner with a paltry bank balance.
"Oh, yeah, trust me, there's a huge difference between being a millionaire and a billionaire, or even having $10 million or $25 million," said Cuban. "After I sold my first company, and I had, like, two and a half million dollars in the bank, I still kept a budget. I still have that budget, actually. And I kept a strict budget every day.
"Then I went back to Dallas, but I was trading stocks," he continued. "And I was starting to make a lot of money trading stocks. But even then, I didn't feel like, 'Okay, whatever I want, I can be extravagant.' Same house, same everything, same car."
He Doesn't Want To Waste Wealth
The truly wealthy don't waste their wealth; they grow it. That's why the sixth richest person in the world, Warren Buffett, eats breakfast at McDonald's every day and lives in the same Omaha home he bought for $31,500 in 1958.
It's not self-punishment. It's pragmatic living and part of what makes billionaires a rare breed. This includes the frugal spender, Cuban, who is currently worth billions, meaning he's accumulated enough wealth to rank on Forbes' Real-Time Billionaires list. By spending conservatively and saving where you can, you can make a better return than competing with the risk-takers.
"I look at my annual budgets for everything and anything, and I look to see where I can save the most money on those items," Cuban told Forbes years ago. "Saving 30% to 50% buying in bulk -- replenishable items from toothpaste to soup, or whatever I use a lot of -- is the best guaranteed return on investment you can get anywhere."
Why You Should Budget Like Cuban
The bottom line is that just because you can afford to spend a lot of money doesn't mean you should. Living beneath your means is one of the steadiest ways to not only grow your wealth but also improve both your saving and spending habits. No matter how much you accumulate, never ball like a billionaire.
Caitlyn Moorhead contributed to the reporting for this article.
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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