Mark Cuban is well-known for his outspoken views and advice on topics that range from politics to investing. The self-made billionaire doesn’t hold back when sharing his two cents on how folks can improve their finances and even get rich.
This borrows a page from billionaire Warren Buffett’s playbook, as the “Oracle of Omaha” has long said, “Diversification is a protection against ignorance. [It] makes very little sense for those who know what they’re doing.”
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Cuban has been known to endorse investment opportunities that either run counter to the majority of analysts or are considered downright aggressive. But Cuban believes that if you know what you’re doing, it greatly diminishes the risk.
While Cuban isn’t known as a passive investor per se, he does pick investments that can grow in the background while he focuses on his businesses, some of which provide extra income in the process.
Here’s a look at the types of things that Cuban invests in himself. And, if you’re looking for some tips to start earning passive income, check this out.
According to Cuban, dividends put actual cash into investors’ pockets, giving them real-world value by generating passive income right away. With non-dividend stocks, according to Cuban, value is only a vague notion derived from various market metrics.
Dividend-paying stocks are likely the closest investment Cuban truly has to “passive income.” In addition to these stock’s capital gains, they pay quarterly dividends, guaranteeing an income even if the markets are down.
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For the most part, Cuban isn’t a big believer in owning individual stocks. As he’s said, “I believe non-dividend stocks aren’t much more than baseball cards. They are worth what you can convince someone to pay for them.”
However, he changes his tune when it comes to AI-related companies. Cuban knows the field well and believes in AI’s future, suggesting that every company will need it to thrive or survive. Thus, a big part of his selection process when it comes to individual stocks is how capable they are in the field of AI.
AI stocks aren’t known for generating current income, but if they explode in value, they can turn into a generous source of income when needed. In the meantime, you can simply invest in them passively in your portfolio, waiting for them to perform.
