I came across something that Mark Cuban said that really got me thinking a lot this.l morning. If there's one thing he knows a lot about, it's money, after all, the guy is a billionaire. So in one of his videos from 2018, he shared his rules for getting rich and one of the rules involved putting as much as up to 10 percent of your savings into high-risk investments. While some teach on 10 percent of your money being saved, he's teaching 10 percent of your money risked.
When you hear it for the first time, it does sound a bit crazy, but when you really think about it, it isn't.
Cuban suggests taking that 10% and putting it into something like Bitcoin or Ethereum if you're up for it. But there's a catch to doing this. You literally have pretend like that money's already gone. It's almost like saying goodbye to it before you even invest it.
What's the reason for this strategy? Well we already know these kinds of investments can be all over the place. One day you're up, the next you could lose everything. It's a gamble, though a smart one if you do it right.
I like to think about it in terms of buying something you really love, some art, some crazy sneakers, or a rare baseball card. It is whatever somebody will pay for it. There's risk, yes, but there's also a chance you might end up with something super valuable.
Cuban labels this a "Hail Mary" play, which I kind of think is the perfect way to put it. You know, when you are playing football, and you throw that really long pass with just a few seconds left? It's a rather big gamble, but if you connect, then you win big. That is what this type of investing feels like. But by keeping it to only 10 percent of your savings, you're not gambling everything. Even if it doesn't pan out, you're still standing on solid ground.
I get it if you ask why take the risk at all? For me, it's about putting a little fun into my investment game. If you have got a good financial base already, the small amount you can afford to put into something risky might be a good time and may actually pay off.
It's not just about Bitcoin or crypto. Cuban's advice applies to any high-risk investment. Maybe it's some sort of startup you believe in or some real estate that might really pop off. Whatever it might be, just do it smart. I think talking to somebody who has gone through those ropes like a financial advisor to see what would work for you would be worth it.
Of course, not everybody is into taking risks and that's perfectly okay. There are plenty of safe ways to grow your money. In fact, it's all about what makes you feel comfortable and allows you to find a balance that works for your life.
