Keys to Financial Success as Told By Mark Cuban

I personally don't have a problem with Mark Cuban, but I know he rubs many people the wrong way. For those of you who don't know, Cuban founded Broadcast.com and sold out to Yahoo at the peak of the tech bubble for about $5 billion dollars, he then went on to buy the Dallas Mavericks and dabble in some other ventures like HDNet and potentially buying the Chicago Cubs. For certain, the guy is emotional, opinionated, and undoubtedly rich by any standards... oh yeah, he likes the enjoy his money.

This week Cuban posted an article on his "blog maverick" site titled "How to Get Rich." The article raises some interesting points that run counter to conventional wisdom. In a nutshell Cuban says, 1) keep money in cash, 2) don't take shortcuts, 3) stop using credit cards, and 4) find a job you love.

I have to admit I was really skeptical when I received the link from a friend yesterday, but Cuban gives some solid advice. I whole-heartedly agree that there are no shortcuts to building wealth. It's a slow process that for most people requires sacrifices and SAVING MONEY. Bottom line, you have to put more money in the bank or securities than you blow on entertainment, luxuries or other disposable expenses. I also strongly believe that for many reasons loving your job is important. People spend more time at work than just about anywhere else. If you hate your job, chances are you are either a) not good at it, b) overqualified, or c) would be a lot better at something else. There's an untold number of people out there who made fortunes in weird niche industries and businesses. The person who created the temporary tatoo, hackey sack, or spork probably all flew under the radar -- and didn't live way beyond their means. They probably all also ended up with more money in their estate than you or I will. Even if it doesn't necessarily contribute to your bottom line right away, doing what you love will make you a lot happier.

I would disagree with Cuban on his keep your money on cash and don't use credit cards opinions. Historically the stock market is not as risky an investment as he makes it out to be. Yes, it is driven by emotion and not closely correlated to actual market conditions, but earning 3-4% in a CD won't cover inflation most of the time. You can no longer buy a stock and hold it for 30 years (if you ever could) and need to actively monitor things by diversifying your asset and portfolio allocation but averaging a conservative 6% is almost double what short term CD's pay. Having a sizable position in cash or bonds makes sense, but keeping all your money in cash is foolish. Also, although most people use credit cards irresponsibly, there are plenty of people who don't carry a balance and get some cash back rewards in the process.

Does anyone have other ideas to add to the list? I'd like to compile my own list and post it sometime in the future if anyone

Christmas Deals Come Early This Year

Consumer advocate and finance guru Clark Howard is predicting that sales for Christmas will begin mid-late October this year and run through December 10. He says that there will still be Black Thursday deals, but that consumers will have more options this year. I don't know whether that's a) good for all of us because there are more deals to be had, b) bad because we will be inundated with the Christmas trappings even earlier this year, or c) a clear picture of the sorry state of the economy.

National Debt Clock Maxes Out

Last month the national debt clock maintained by the Durst Organization in NY ran out of digits. The United States debt exceeded $10 trillion dollars and the clock's dollar sign had to be removed and replaced with another digit. The clock will soon add two more digits... here's to hoping that's something we never have to use.

Link: WSJ Blogs - Debt Clock

Worst Wall Street Months in History

Floyd Norris had an article two days ago that listed the worst months for the market in U.S. history. I'm not a believer that the stock market is a barometer for the overall health of the economy (I think the stock market operates on momentum and emotion, where the economy tends to slog forward or backward with fewer rapid ups and downs), however it is interesting to see how this crazy month has stacked up historically. It should be noted that the

1. October 1987, -21.8%
2. August 1998, -14.6%
3. September 2008, -13.8%
4. September 1974, -11.9%
5. November 1973. -11.4%
6. September 2002, -11.0%
7. November 1948, -10.6%
8. March 1980, -10.2%
9. September 1946 -10.2%
10. August 1990, -9.4%

Article @ NYTIMES

Image: ralphunden

New Video Game Simulates Starting a Business

Doctors and lawyers make good money, but it's the small business owners in this country who make serious money. In the US, even people who don't set out to become independently wealthy are drawn to entrepreneurship. It seems that being your own boss and having the ability to set your own hours is a national obsession - but if it were only that easy. The risks involved often drive many people away from hanging their own shingle. Entrepreneurship is one of those facets of life where sometimes ignorance is bliss. Today I was tinkering around with a game called "Johnny Money Online." The game is an online game that was released by the Wharton School of Business.

Johnny Money Online is free and geared at teens interested in starting their own business, but applicable to adults as well. The game gives you a crash course in all the decisions business owners make and how much uncertainty is involved. You play a retail business owner and must make purchasing, advertising, and marketing decisions. I failed miserably at this game and if there are any small business owners who have tried it out, I'd love to hear your opinions. What is representative, good, bad, otherwise?

Image: Kimberly* @ Flickr