How Not To Become Rich According To Billionaires Warren Buffett & Mark Cuban

What is pretty admirable about how these billionaires became what they are right now is that a lot of them started from almost nothing. However, that only shows that no matter how ordinary people are, they can get rich if they really want to. Here are some advice from Dallas Mavericks owner and ,ulti-billionaire Mark Cuban as well as the greatest of all time in finance, Warren Buffet.

Never Go For a Shortcut

Multi-billionaire Mark Cuban graduated from Indiana University at 23 to set off for Texas. Back then, all he had was just a few $20 bills in his pocket, a hole in his floorboard and a case of oil in the trunk as well as a floor to sleep in while in Dallas. Not too far from then at the age of 32, he already earned his first million when he sold his company MicroSolutions to CompuServe for $6 million. In just less than ten years, he would already become a billionaire when he would sell Broadcast.com to Yahoo for $5.6 billion.

When asked for tips for those who would want to build wealth, this self-made multi-billionaire is was quick to say that he was not a fan of getting rich quick schemes. “There are no shortcuts. NONE” as he would write in his blog back in 2008.

If It’s Too Good to be True, It Probably Isn’t

Couple drinking champagne in limo

Cuban also said that the less money you have in your pocket, the more likely somebody will be coming at you with some scheme that would promise you instant wealth. He says that by all means, you should ignore all of these deals. “If a deal is a great deal, they aren’t going to share it with you” he adds.

Cuban is pretty secretive of his deals and does not broadcast them. He also suggests that others should be skeptical of those who do. “I keep them all to myself,” he says. “If the person selling the deal was so smart, they would be rich beyond rich rather than trolling the streets looking to turn you into a sucker” he adds.

Money is in Investing

Warren Buffet is a man who needs no introduction when it comes to anything to do with finances. Buffet is the smartest being ever known to mankind when it comes to investing. He once donated over 90% of his wealth to charity, only to gain everything back in a few years. Up to this day, he is frequently consulted by some of the world’s wealthiest people with regards to investing advise.

Buffet says that the golden rule of investing is to think long-term. Buffet makes use of the buy and hold strategy when it comes to his investments. He says that the money in investments is made by investing. If one should buy a good company, buy them over time. This is some assurance that they will still be good in 10, 20 or even 30 years.

Active Fund Investment is a Losing Bet

The golden rule of investing is to think long-term.

Buffet reached this conclusion in 2005 when he made a bet with an investment manager active investment management by professionals in aggregate would over a period of years underperform the returns which are achieved by amateurs who simply sat still. He also explained the massive fees levied by a host of “helpers” would leave their clients much worse than if the amateurs investing in an unmanaged low-cost index fund.

Of course, nobody can bet against Warren Buffet in finances and win. Buffet made use of hedge funds as a model for active management. These have become vehicles for high net-worth investors and charge  2% annual management fee plus reduce 20% off the profits.

The Bottomline

You might never be as stellar as Warren Buffet in your lifetime. Neither might you have the early success that Mark Cuban enjoyed. However, these people have some nuggets of wisdom which ordinary people can learn from. When it comes to getting rich, never go for a shortcut. Go ahead and invest and see your money grow before you.

Regardless of what your current position is, how much you earn and what you do for a living, you can get rich. That has already been shown numerous times before, not only by Cuban and Buffet. What do you think of what they have to say? Share your thoughts with us in the comments below.