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Don't Invest In Rap, Restaurant And Liquor Companies,' Says Mark Cuban. Here's His Advice To NBA Players And Other Millionaire Athletes

AInvestSunday, Jan 5, 2025 12:17 pm ET
3min read


As a billionaire entrepreneur and Dallas Mavericks co-owner, Mark Cuban has seen his fair share of investment trends and pitfalls. In a recent interview with Shannon Sharpe on the Club Shay Shay podcast, Cuban shared his thoughts on managing wealth as a two-way NBA player, offering valuable advice to athletes and millionaires alike. One of his key pieces of advice? Steer clear of investing in rap, restaurant, and liquor companies.



Cuban, known for his direct and candid approach, emphasized the importance of living modestly and saving wisely. He advised athletes to "live like a student" and not overspend on luxuries, as job security in the NBA can be uncertain. By maintaining a frugal lifestyle, athletes can build a financial safety net and avoid the pitfalls of sudden wealth.

One common mistake athletes make is entrusting friends with financial decisions. Cuban warned against this, stressing the importance of hiring a professional wealth manager with a proven track record. Entrusting friends with financial responsibilities can lead to risky decisions and potential financial loss.

When it comes to investing, Cuban advised against sinking money into trendy but high-risk ventures like clothing lines, liquor brands, or music labels. He pointed out that "barely any of those clothing brands or music labels succeeded" in the early 2000s and 2010s, highlighting the high failure rates in these industries. Instead, athletes should focus on safer investments and pay friends to handle other non-financial responsibilities.



To build long-term financial security, Cuban recommended creating multiple income streams through low-risk investments. He suggested investing in dividend aristocrat stocks, such as Coca-Cola and Walmart, which offer reliable returns and steady income. Reinvesting dividends over the years can accelerate net worth growth, even with relatively low risk.

Cuban also highlighted the potential of fractional investing in stocks and real estate via real estate investment trusts (REITs) for investors with limited capital. These options allow investors to own small portions of high-value assets with as little as a few dollars. With REITs, investors can earn income from rental profits while their net worth grows through property appreciation. However, Cuban cautioned that REITs come with limitations, such as potential lock-in periods that make these investments less liquid.

Another low-risk vehicle Cuban praised is high-yield savings accounts, which offer interest rates as high as 4.5%. These accounts provide nearly ten times the national average interest rate on deposits, making them a safe way for athletes to earn passive income without the volatility associated with riskier investments.



In conclusion, Mark Cuban's advice to NBA players and other millionaire athletes is to live modestly, avoid entrusting friends with financial decisions, and steer clear of high-risk investments in trendy industries like rap, restaurant, and liquor companies. Instead, focus on building multiple income streams through low-risk investments, such as dividend aristocrat stocks, fractional investing, and high-yield savings accounts. By following these guidelines, athletes can secure their financial futures and avoid the pitfalls of sudden wealth and risky investments.
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