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While Mark Cuban still works today as a 67-year-old and has no plans to retire — once telling CNBC, “I’ll go until I drop” — the former Shark Tank star didn’t always believe in skipping retirement (1).
In fact, when he was young, he was dedicated to the FIRE (Financial Independence, Retire Early) movement.
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“I read this book, it was called How to Retire at 35. And the whole foundation of this book was: save your money, live like a student,” he said on a podcast, “And that was my mission (2).”
Paul Terhorst’s 1988 book, Cashing in on the American Dream: How to Retire at 35, changed his perspective on life.
Two years after reading it, he sold his company, MicroSolutions, walking away with $2 million, which he quickly invested and retired on at 30.
“I literally remember calling up my broker, and I said, ‘I want you to invest for me like a 60-year-old, cause I want to live off this for a long time,’” he continued.
At the time, American Airlines offered a (since discontinued) lifetime pass, which he bought, as his goal was to “live like a student, just have fun.”
“I bought this lifetime pass on American Airlines so I could go to any city anywhere, party like a rockstar,” Cuban said. “Literally, I would tell people my goal is to get drunk with as many different people as I could.”
And for five years, he did just that — but he eventually found out retiring so young didn’t suit his competitive nature. Soon enough, he was overseeing the audio streaming company Broadcast.com, which Yahoo eventually acquired in 1999 for $5.7 billion.
If you’re hoping to retire many decades ahead of schedule, you might not have the same $2 million windfall as Cuban, but the major steps he followed back in the late 80s can still work today.
How living like a student can help you retire early
The basic rules of FIRE require serious saving and investing early on, and the sooner you plan to retire, the more intense those rules can be.
While Cuban talked about living “like a student” in retirement, in that he wanted to party every day, he also mentioned that the premise of the book was “save your money” and live like a student — financially — meaning even when your career gives you enough to say goodbye to ramen noodles every night, you don’t upgrade your dinner, as that extra cash can allow for enough invested early on to accelerate retirement.
The more you save and invest, the faster your investments meet your FIRE number. For Mark, that was $2 million, but many advocates of FIRE do it on much less.
Read More: Robert Kiyosaki warned of a ‘Greater Depression’ — with millions of Americans going poor. Was he right?
Start Investing now
If you’re new to investing and still working within the limited confines of a student budget — but want to begin saving for retirement — platforms like Acorns can help.
Acorns makes investing early easy for even the novice investor by turning extra change from your purchases into investments.
For example, if you buy a coffee for $5.30, Acorns will round up the price to $6.00 and invest the 70-cent difference. Throughout the year, these coins can snowball into a sizable investment, with zero work on your end.
Sign up today, and you can get a $20 bonus investment when you set up a recurring monthly deposit.
Build a better budget
And if you really want to understand your spending so you can see where cuts can be made, you need a budget. But for many, budgeting in a spreadsheet can feel like a tediously boring task that never ends, making it hard to stick with it.
A quick daily check-in of your accounts can show you exactly where your money is going.
An app like Rocket Money can easily flag recurring subscriptions, upcoming bills and unusual charges by pulling in transactions from all your linked accounts.
This can help you cut unnecessary costs, and then you can manually redirect savings straight into your retirement fund. No spreadsheets, no guesswork, no stress. Small habits like this can make a big difference over time.
Rocket Money’s intuitive app offers a variety of free and premium tools. Free features include subscription tracking, bill reminders and budgeting basics, while premium features — like automated savings, net worth tracking, customizable dashboards and more — make it easier to stay on top of your retirement contributions and overall financial goals.
Since every penny counts, it’s vital to ensure you’re not overpaying for things like car insurance, as unfortunately, many companies raise rates regularly and without warning. Shopping around can help.
By using OfficialCarInsurance.com, you can avoid overpaying by comparing quotes from multiple insurers like Progressive, Allstate and GEICO. You could even find rates as low as $29 per month, depending on your location and needs.
Keep in mind that, typically, you don’t need to wait until your term is up to change insurance providers. Just keep an eye out for any early-cancellation fees and weigh them against your potential savings.
Develop an emergency fund
Of course, if you’re considering pursuing FIRE, you’ll also want a high-yield savings account working for you. While you’ll want to invest as much as possible as soon as possible, you also need an emergency fund that remains separate from your investments.
But leaving any significant amount of cash sitting around in a no-interest checking account means it is losing money to inflation.
A high-yield account like a Wealthfront Cash Account can be a great place to grow your uninvested cash, offering both competitive interest rates and easy access to your money when you need it.
A Wealthfront Cash Account currently offers a base APY of 3.30% through program banks, and new clients can get an extra 0.75% boost during their first three months on up to $150,000 for a total variable APY of 4.05%.
That’s ten times the national deposit savings rate, according to the FDIC’s March report.
Additionally, Wealthfront is offering new clients who enable direct deposit ($1,000/mo minimum) to their Cash Account and open and fund a new investment account an additional 0.25% APY increase with no expiration date or balance limit, meaning your APY could be as high as 4.30%.
With no minimum balances or account fees, as well as 24/7 withdrawals and free domestic wire transfers, your funds remain accessible at all times. Plus, you get access to up to $8M FDIC Insurance eligibility through program banks.
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CNBC (1); @vpmotion69 (2)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
