Mark Cuban Says He Wouldn’t Invest $100K, Here’s What He’d Do Instead

Most people expect billionaires to offer sophisticated advice. They may want to know about a hot new tech stock or the latest crypto scheme.

So, when "Shark Tank" investor Mark Cuban was asked how he's spending a $100,000 windfall, his answer was surprising. His focus wasn't on beating the markets, per se, but more about becoming financially fit in uncertain times.

Read on to hear what he suggested people do with their extra cash and why now may be the best time to listen.

Cuban's classic advice for today's economy

Cuban's 2010 Forbes interview may have been over 15 years ago, but the way it applies is still relevant. He stated that, if given $100,000 to invest, he would use it for the following:

• Paying off bad debt, like credit cards
• Buying bulk supplies, including groceries or toiletries
• Sticking cash in a bank account, even if not earning interest

If this sounds odd, it's because it's counter to some of what other financial gurus have promoted. Cuban's theory is that you can invest, but you should have some basic stability moves out of the way first. Without the worries of high-interest debt and some cash in the bank, you can make more strategic moves when the time comes.

His examples were very specific, including buying bulk soup at 30% off and letting cash sit so you can pounce when the housing market is just right. But even if you're not a soup fan, his principles still apply.

Essentially, Cuban is saying that speculative bets should wait until you're secure and ready to handle whatever the future throws at you. And then be prepared for hot opportunities when they come your way.

The math behind these money moves

The specifics of soup or toothpaste aren't the main point here. It's the compounding logic of savings behavior and having liquidity to get in on good buys. When you buy goods at a discount, their value often outpaces as goods go up in price.

Take toilet paper, for example:

If you typically spend $10 a month on toilet paper, this may not seem like much. Over the course of a year, you'll spend $120, assuming the cost never goes up. But if you buy in bulk at a 15% savings over buying one package at a time from the grocery store, you'll see an $18 savings that year.

That may not seem like much, but multiply that savings for soup, toothpaste, and pet food. Some purchases, like sunscreen, may not scale. But if you buy baby diapers, you know there's a big opportunity to save money over time.

Now, factor in the inflation of consumer goods at 2% to 4% annually, and you have an even bigger chance to save. That toilet paper is now worth much more than when you bought it, locking in guaranteed returns that rival the small market gains of some years.

There's also very little, if any, risk in buying toilet paper. The worst-case scenario is that you can unload it on a neighbor through Facebook Marketplace at the same cost you paid for it. It won't dump value like a poor stock option, and it won't really lose value.

Building in opportunity cost

Cuban takes this strategy one step further and mentions keeping anything not spent on paying debt and buying toilet paper in an interest-free account. While it may not make sense to let your money sit without earning, many accounts that pay the most interest also lock it in, such as Certificates of Deposit.

With that money sitting freely in an account, you can access it whenever you want, even if it's to put in a last-minute cash offer on a property.

Now, the specifics of this may not work for you, and you may want to follow the advice of a financial professional for your unique situation.

You may find that "opportunity" is more about having enough to live on if something were to go wrong, not necessarily about investing in business deals. However you look at it, the general principle still applies:

Reduce debt cost, cut household expenses, and free up cash for important things.

The key is to make your money situation stable and ready for whatever the economy throws at you. Cuban is still thinking like an investor, just at a household level that most of us can apply.

Bottom line

With inflation and rising living costs making it harder to buy things like toilet paper and soup, stocking up at a discount may not be a bad idea. Many Americans can't access meaningful investment opportunities without getting debt and expenses under control, and this may be just the thing needed to think like an investor.

It also provides some psychology of progress with daily, visible wins instead of uncertain, future returns. Once the basics are stable, then small, thoughtful investments can transform those savings into life-changing, long-term wealth.

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