Young people starting their financial lives can be overwhelmed with the amount of information available, and not all of it is geared toward them. Mark Cuban, owner of the Dallas Mavericks and investor on “Shark Tank,” shares some insights for young adults who are ready to take steps toward financial success.
Start with your debt
While many people are eager to start investing in the market, Cuban says there’s one step that comes before that.
“Paying off your debt is always your first best investment. When you pay off a 7 percent loan or an 18 percent credit card, that’s an immediate return of 7 or 18 percent. Guaranteed.”
Commit to saving
Once you’ve paid your debts, Cuban says you should focus on continuously saving money. He says everyone should aim for a six-month rainy-day fund.
“Once you get there, then investing as much as you can afford in a low-cost SPX mutual fund every month and never touching it will pay long-term benefits.”
Find the right tools
It’s not just credit card debt that can prevent you from building a solid financial foundation. Overdraft fees can suck the life out of your financial future too, says Cuban.
He recommends tools like Dave.com (he’s an investor) that can help you stay on track of expenses debited from your account so you don’t end up in a deficit thanks to an unexpected overdraft fee.
Live like a student
While many young adults are eager to start acting like “real” adults, Cuban encourages them to do the opposite.
“Live like a student for as long as you can. The more stuff you buy that you don’t really need, the more financial stress you will feel,” he advises.
Only purchasing what you need, as opposed to what you want, will keep your bank accounts flush.
Inspo for the future
Cuban struggled with his finances in his 20s just like most of us. But now he’s figured out the formula to his financial success and enjoys helping others avoid some of his own struggles.
When the opportunity arose to buy the Mavericks sports franchise (something he never in his wildest dreams imagined he would do), he was financially able to make the decision.
“I have been a basketball junkie my entire life. I love the game. It’s in my blood and I play to this day,” he says.
