Considering that he has an estimated net worth of $6 billion, entrepreneur and investor Mark Cuban probably doesn’t have a lot of money worries. But even when Cuban was “only” a millionaire, he heavily emphasized protecting his wealth to ensure a lifetime of financial security.
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Cuban crossed the millionaire threshold in 1990 when he sold his software company, MicroSolutions, for $6 million, personally netting about $2 million. Even though Cuban was still in his early 30s at the time, he aimed to take the long view with his money.
“One thing I learned from my dad is that time is the most valuable asset you don’t own,” Cuban told columnist and content creator Jules Terpak in a video interview. “So, I made $2 million, and I literally remember calling up my broker… and said I want you to invest for me like a 60-year-old. I want to live off this for a long time.”
Less than a decade later, Cuban joined the billionaire class by selling another of his businesses, Broadcast.com, for more than $5 billion.
Investing for the long term is one way Cuban protected his wealth. Here are three other ways he and other wealthy individuals safeguard their wealth.
Don’t Overspend
Even now, as a multibillionaire, Cuban doesn’t spend money on luxuries he doesn’t want or need. Or rather, as he puts it, he doesn’t own a yacht or hire butlers or even house cleaners. Most of his time is spent with family or running Cost Plus Drugs, an online pharmacy designed to make prescription drugs more affordable.
“I think less about making money and more about direction… to benefit as many Americans as I can,” Cuban said.
Indeed, many millionaires are frugal. Living a frugal lifestyle and being more mindful with your spending habits goes a long way toward reaching financial goals.
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Plan Strategically
Blake Harris, an asset protection attorney and founding principle of Blake Harris Law, wrote that millionaires “don’t leave things to chance.” Instead, they “plan meticulously.”
Harris referred to a 2023 survey of 580 Americans by Ameriprise which found that 80% of respondents with a minimum of $1 million in investable assets identified financial planning as a “key factor” in their wealth accumulation. Creating a comprehensive plan for protecting wealth often includes maintaining enough liquidity to alleviate risks, insuring your assets, protecting personal and business assets through offshore trusts and developing a comprehensive estate plan.
Maintain a Diverse Portfolio
This applies to any investor, regardless of how much money you have. But it’s especially important to millionaires because a diversified portfolio ensures you don’t take a huge financial hit when one asset class takes a dive.
“Millionaires diversify their assets by distributing them among various classes such as stocks, bonds, real estate, etc.,” Harris wrote. “In my experience, I’ve found that many also diversify assets across different jurisdictions such as the U.S., Switzerland and the Cayman Islands. This approach minimizes the risks associated with economic fluctuations and regulatory changes.”
Affluent households typically allocate about 65% of their investable assets (excluding real estate) to stocks and 25% to bonds, according to Harris.
“Spreading investments across diverse asset classes and geographical locations can reduce portfolio risk while simultaneously preserving or enhancing the potential for positive returns,” he wrote.
Caitlyn Moorhead contributed to the reporting for this article.
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This article originally appeared on GOBankingRates.com: 3 Ways Mark Cuban and the Super-Rich Protect Their Wealth
