Mark Cuban on being broke to becoming a billionaire.Keys to Success & Stock Market Advice

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2:37All right, guys. Welcome back. Another exciting, groundbreaking episode for EYL. We're going to call this the billionaire edition. Yeah, for sure. For sure. The Billionaire Boys Club. So, you know, we've had the privilege of talking to a lot of great people. And first and foremost, relationships are extremely important. So first and foremost, we have to thank our guy, Al Harrington. Yeah. Al Harrington. Alumni, episode 16. Yeah, great guy, great guy. So, you know, we put it power social media. We put a post on social media and it was like, tag Mark Cuban if you want to see him on EYL. Tag, tag, tag, tag, tag, tag, tag.

3:10It was like 2 ,000 people tagged him. And Al hit me right in the DM like, hey, I just spoke to this guy. Hit him right now. So I did. And to his credit, the whole team was just absolutely phenomenal. So, you know, kudos, kudos to everybody. Kudos to Dawn and kudos to Jacob for being and kudos to Mark as well. Just being extremely efficient and no hassle, no issues. This is quick. Got it. Got it done. Got it done. So serial entrepreneur, NBA, team owner, investor, TV star, media mogul, family man, philanthropist, and legend, cultural icon. So, you know, we've talked to a lot of great people. Stop right there because it all goes downhill from there.

3:57Yeah, we talked to a lot of great people, man. Shout out to Shaq, D-Wade, Dame Dash. But this is the first billionaire conversation that we've ever had. So looking forward to it. So first and foremost, Mr. Cuban, thank you for joining us. Mark, can't tell me, Mr., man. It's Mark. All right, all right, all right. Now that we got that out the way. Mark, Mark, thank you for joining us. Appreciate it. My pleasure. So let's jump right into it. So, you know, our podcast is a little different because we kind of dig into the back story. So the tweet that I put up, it was when you said something to the effect of I had zero dollars in my bank account when I was 27 years old.

4:34and that went viral because, you know, I did the calculations based off of Wikipedia. It was like it was like 10 years later, you became a millionaire. Fifteen years later, you became a billionaire. So, you know, that's that's inspiring to a lot of people because it's like, you know, they see a billionaire and it's like to know a billionaire at one point in time in his late 20s had zero dollars in his bank account. So can we can we start where it all began? So I know you moved to Dallas when you in 1982 and he was a bartender. and then you worked at a software company where you got fired. So can you start there?

5:08Sure. So I went to Indiana University and a bunch of my buddies had gone down to Dallas and they were like, you know, from Indiana, it was like the weather's good, you know, the girls are hot and the economy's great. I'm like, wait, wait, back up. What was that second one? and so um i had a fiat x19 a 1977 fiat x19 with a hole in the floorboard and so i wanted to go someplace warm and i thought about la but my car wouldn't make it thought about miami my car wouldn't make it but i could make the eight hours from bloomington indiana down to dallas because i could calculate the amount of oil i was going to need every 60 miles and the amount of gas i was going to use so i got down there and i moved in with um my my buddy and his five or four roommates so i made number six so there were six of us living in a three bedroom apartment obviously i had to get a job and so i got a job working as a bartender i say it was a bartender but i was more bar back and every now and then i would pour a drink right you know how it goes and so did that at night and then during the day i went looking for a job and got a job working for a computer store called Your Business Software.

6:23It was one of the first early computer stores. I remember doing my interview because I had never taken computers in college. Nothing. I took one class and I cheated at them. And so I remember the guy asking me, he goes, well, what do you know about computers? And I'm like, I know how to read the manuals, right? I know how to sit in front of a computer and do basic stuff. and and so um he's like well all right if you're willing to learn all this software programs by reading the manuals i'll give you a shot and so i got that job um paid me enough to pay my share of the rent um it still had my shitty ass car and i'll tell you another story about that in a minute you talk about being broke and so i got that job and so life is just going on right just trying to you know, keep up with everything and pay my bills.

7:11Then my car dies. And so now I got no car. I mean, it had a hole in the floorboard, you know, where I could see the road while I was driving. So I knew it was just a matter of time. And I didn't have any money to get a new car. So probably two weeks later, and I'm getting rides to work and everything. Two weeks later, we're driving along with my buds and we're driving along and there's a car on the side of the road. it i'm like stuff he's like what he's like somebody had to abandon that car it was like a 1980 trans am or 1970 something trans am i'm like someone had to abandon that car and i need a car and so no lie i had my buddy pull over i open up the car door it's open right and there's papers and anybody who's ever missed a car payment right or had a car repossessed knows exactly what i'm talking about right you got all the papers and everything and you're trying to figure out how to pay the bills and then when you just can't pay it and they're going to come get it you just leave it right you're just done with it you know and so i knew what was going on and so i opened the car pulled out the saw the papers on the seat called the bank right got got back to our apartment this is before cell phones got back to the apartment called the bank i said i found this car on the side of the road i know you guys are going to try to repossess it can you do me a favor i'll pick up the payments on it because I had my software job at that point I'll pick up the payments on it because I lousy credit awful credit like I had gone to Radio Shack to try to buy a computer to help teach myself to learn and I tried to do it on credit and they turned me down Radio Shack turned me down and so I called the bank they gave me the okay to take over the payments and that's when I started getting my life back on track and started building my credit up but even then I was like 24 at the time and working at that job and things started to go good for me.

9:02And then about nine months into that job, I had an opportunity to close the deal. And this deal would have got me a$1 ,500 commission, which meant I could have moved out. We called it the Hill Hotel where I live. It was in an apartment complex called the village and a little part of it called the Hill. And so I can move out of the Hill Hotel, which was a shithole if I got this$1 ,500 commission. and so um i go to my boss who and i normally have to sweep the floor open up the store and all that and i'm like look i want to close this deal and he's like no you got to be there to open up the store made the executive decision to go pick up the check thinking when i bring him a fifteen thousand dollar check fifteen hundred of which is going to be mine life is good right fired me on the spot i realized i was a shitty employee at that point in time it wasn't the first time i've been fired or quit a job, right?

9:49And so started my own business called Micro Solutions. And that, you know, I was taking a step back financially, because I had no income coming in, beg somebody who was one of my prospects at the software store to loan me 500 bucks to be my first customer. So they gave me 500 bucks so I can buy the software that they needed. And I took that and I just kept on growing from there. And so that three years later, you know, when I went to the ATM, I had my business going, but everything that I had was going into the business, right? And I thought, you know, it wasn't a normal paycheck, right? It wasn't a regular paycheck for me.

10:28And so you think sometimes, you know, in your head, I've got 100 bucks or 200 bucks, and you go there thinking you're going to take out some cash, and it's all gone. And so that was my moment. And it was just like, okay, this has got to be, you know, it wasn't a low point because I had my company, but this was like the point where, you know, I got to pay attention to the details and really start building this thing. And then it just blew up from there. I really put the effort in and it went big. So you didn't know anything about computers to actually working in a store with computers, reading the manuals to creating a software company.

11:02Like, is this still manuals? Are you starting to surround yourself around people who have some insight in the field? No, I got to learn, right? Because, you know, if I'm going to be an investor now, right? It's not like I'm worried about my next sale, right? To pay to get my$1 ,500 commission. But, you know, but if I'm going to be the guy that, you know, whether it's on Shark Tank, or, or doing deals, if I'm going to be a tech guy, you got to learn the tech. I mean, literally, I've got all these books around here. I mean, just about, you know, learning new technology, learning about AI, learning about, you know, personalized medicine, all these things.

11:35So, yeah, I still will read the manual, you know, only now it's like a download instead of a book. But, yeah, because you got to, because if I'm going to be out there saying I'm a tech guy and I don't know shit about tech, man, I don't want to be that guy. I'll pass that fake it till you make it. I want to be that guy who really knows the stuff. I want to ask you about selling the company to H &R Block. But before that, you brought up a good point. How often do you do you educate yourself a day? Like, is it like an hour? What did I? Every day, every minute, everything I do is about learning more because that's the only way I can kick your ass.

12:10You know, I'm not going to out athletic you. Right. It's not about my basketball IQ. It's about my business IQ. Right. And technology and business. And everything's always changing. You know, five years ago, if someone would ask me about artificial intelligence, I wouldn't know shit. Right. Yet AI is the most important part of technology and really business going forward. So if I'm going to be an effective investor, an effective mentor, an effective operator of businesses, even with the maths, I got to understand AI. Because, you know, like with the Mavericks, when you talk about analytics, it's changed so dramatically, even over the last five years, going from, you know, different types of things per and, you know, advanced RPM and all these different metrics for basketball to how do you implement artificial intelligence and pose estimation and computer vision?

13:05And how do you understand all that stuff to make the right decisions for the max? And so if I want to be in a position to make those decisions and not just ask somebody else to do it, I got to learn it. And so I put in hours. I do tutorials. I take little online classes. And it doesn't make me an expert. It's not like I'm going to say, you know, I could get a job if I needed to running AI or running tech for a big company. I couldn't. But I understand all the concepts and understand the issues and how to apply them to business. so if you're going to be good at anything you got to stay ahead of the game and business is the ultimate sport you know i used to say it to dirk and i always say it to luca you know it's like dude you know you play 48 minutes you know a 48 minute game you practice a couple hours you go home and you relax and you play you know you play call of duty you know business is 24 by 7 i'm going every day because there's some 16 year old kid out there trying to kick my ass in one of my companies and it ain't going to happen.

14:04Right? And so I'm that competitive and I'm that, you know, I work that hard at learning to try to stay ahead of the game. I mean, that's amazing to hear you say you're taking online classes and it's like, you know, for somebody of your stature to invest, to still be investing in your education, not to rest on your laurens. I think that that's something that's a teachable moment for all of us, but especially people that's aspiring to get to the next level is like if Mark Cuban is investing in his education. Like, everybody should be investing. sport, the ultimate competitive sport. You don't know who your competition is.

14:36It's always changing. They're coming out of nowhere. There's some kid who thinks he's going to bust your ass, right? You know, and walk in and try to take, you know, just try to do something that beats your company or one of my investment companies. And I can't let that happen. You know, somebody has got to be LeBron, you know, and I may not get there, but I'm going to bust my ass trying. So let me ask you this. When you sold the company, the first company that you sold, I believe it was to H &R block. Um, and it was 30 million, you netted 2 million. So how was, how did, how was that process and actually letting go and selling your first company, um, and kind of springboarding that.

15:13And so we're going to talk about the next company after that, but what was the process in that? So we had 30 million in sales. We actually sold the company for 5 million. I had brought on a partner who got two, and then I gave a million to the employees. And so that netted me 2 million. And so I took that$2 million, and I got a broker at Goldman Sachs. And I'm like, I want to invest like an old man. I'm 29, 30 years old. Because to me, the process was, you know, I took seven years. I worked, busted my ass at that company seven years with no vacation, right? Am I saying I didn't go out and have fun?

15:50I did, a lot of it. But when everybody else was taking off to go to Mexico for a weekend or whatever, I had to stay back and work and and so you know I put in all this time and my goal was always to retire right my goal wasn't to start this company and run it till I was 75 years old and grow it to be this a big enormous company my goal was retire by the time of 30 I was 35 and when I got the opportunity to sell the company and what happened was I just got a letter from some dude who said he was interested in buying the company he represented H &R Block and I was like come on I've been waiting for you yeah right I'm not messing around and the opera was good enough at that point in time where I could say if I'm willing to live like a student I could retire and so we went through the whole process I went to Kansas City met with the H &R Block Board told them what I thought we would do as it turns out they had other plans they just wanted to buy the company and have somebody else run it and I was like fine you take it I'm good with that You know, pay me a little salary to answer questions when you need me.

16:58And I bought a lifetime pass on American Airlines for$125 ,000, which meant I could take me and anybody else anywhere I wanted to go in the world at a moment's notice. Man, I'm at a club in L.A. Let's go to Vegas. Come on, let's go. I'm in Vegas. You know, you want to go to. How long was that? How long was that? Did that pass expire? That passed. After I bought my planes, I gave it to my dad. with my slight stunt slight stuff i i actually wrote that down when you talk about your best investments the first one you were explaining is investing yourself and how learning is a skill and your next one was the the airline uh pass i'm like man what if i can get that i don't know if they still sell them but i doubt it i'm in la right and i met a female friend um about 15 minutes earlier and I'm like let's go to Vegas oh let's go to Vegas and she's like okay let's go we thought you know all I got to do is call and make a reservation and I made the reservation and when I show up they have to make seats available in first class for me and my guests and so I walked in there and they're booting out Magic Johnson

18:10I'm like he doesn't know me from Adam and I'm just hey and we just walk on that's great I heard Rick Ross say that he got a wing stop because he wanted to show like the woman he was caught and he could get wings at any point this kind of trumps it I'm a boss right and you know what the best part in the remix he name drops me so that's even better I put his album up because he name-drapped you. Teflon Dom. Shout out to Rosé.

18:43So we got to talk about one of the most legendary situations of all time in business. So AudioNet, you start that in 1995, which becomes Broadcast.com in 1998, which was the first live stream service that showed Victoria's Secret fashion show. Yeah, the first one. Rest in peace. The company, period. First streaming. Yeah, yeah, yeah. for streaming yeah you revolutionized the whole streaming process so so you sell that in the middle of the dot-com boom to yahoo for 5.7 billion dollars the reason why this is so crazy for anybody that's not really familiar with it is like the dot-com boom was when a lot of companies was getting brought at very high valuations um but it was like perfect timing because from my understanding correct me if i'm wrong the company was you got yahoo stock which was at like an all-time high it peaked after a split of uh 500 and then it peaked it was 818 dollars in 1999 two years later that stock was at eight dollars 90 all-time low 93 drop yeah in 2000 you you brought the mavericks for 285 million so what happened with that did you did you sell the stock that's the greatest three years in history short the stock like how did you have a crystal ball?

19:57Are you a psychic? No. Well, first of all, like after I sold micro solutions and that$2 million, I started off investing real conservative, but my broker used to come to me all the time and say, ask me questions about these technology companies. And I would know more about them than the people who are buying and selling the stocks at the brokerages. And so, you know, I would give them answers and realize after I gave them answers, the stocks would go up and down. If If I said good stuff, the stocks would go over. And he's like, dude, you've got to start trading these stocks because you know more than our analysts.

20:29And so I did, and I was crushing it, right? And so for the next four or five years, I was making 80, 90, 100 % a year of my money in the stock market. My bank just kept on going straight up. And so by the time we sold Broadcast.com to Yahoo, I'd already seen these bubbles come and go. the pc bubble right the pc software bubble you know and all these different companies go up and down i'm like yo i got a b next to my name i want to keep that b next to my name i don't need to be greedy and so i went to my broker and i said i wanted to do something called hedging and i wanted to hedge it right which meant that i bought puts against the stock which means if it goes down i make money and i sold calls against it which means if it gets if it goes up i made some money but I don't make as much, right?

21:18It forces those people who I sold the calls to to buy it from me at that price. And so the stock ended up going down and I kept all my net worth from the stock they got because I got it converted to cash because of the puts. But I actually made more from it than I got originally because of the value of the puts when they came to their expiration date. And it was called one of the top 10 trades on Wall Street of all time. Because I ended up making more money instead of losing all that money. And it was crazy because I bought the Mavs in January of 2000. So 21 years ago, just two days ago. Right.

22:02And so and the hedge hadn't really fully taken place yet because it wasn't the hedge didn't really expire until 2001 and 2002. So I remember sitting in the team bus with Don Nelson and Del Harris, who was one of our coaches. Rest in peace. Yeah, yeah. And so I'm sitting there with them like, you paid$285 million? That's crazy. That's like the most ever paid for any sports team ever. And I'm like, dude, look, see this Yahoo stock that I got for AudioNet, for Broadcast.com? It just went up$70 today. that paid for all the mavericks. I mean, I was living large, man. It was a good time. That paid for the private jet, the mansion.

22:50Everything. So you were doing option trading? Yeah, basically. Yeah, but only on my stock, right? So I owned the Yahoo stock, sold the calls with brought in revenue, used that money from the calls to buy puts, which protected my downside. And when the stock cratered, like you said, down to$8, I got all that extra premium. I got all that extra money because I had bought the puts. And so, yeah, so it turned out OK for me. Boys and girls, that's that's a lesson in hedging. I hope you're paying attention. You know, like right now, if you've got all these stocks right now, you know, I got to hedge on my stocks right now, too, because you just don't know.

23:29You know, pigs get fat, hogs get slaughtered. Right. You don't need to get 100 percent of every nickel. If you give back a little bit and spend a little bit on the hedge, even if you're going to lose that amount, you sleep good at night. And if the market craters, whether it's tomorrow or next year, I may have lost a little bit, but I protected the nest egg, you know, and the money I've got in the stock market. So, you know, you've got to you've got to always remember, you can't predict where the stock market's going, even though like right now, Bitcoin's going straight up. The stock market's going straight up.

23:59Everybody thinks they're a genius, right? Everybody's a genius in a bull market until you're not. And so even though I might think one way or expect one thing to happen, I'm always hedging. Ernest, what's going on? It's a new year. And guess what? We're not doing New Year's resolutions. We're doing New Year Who's Executing. And in order to execute, you got to have the information. What better place to start than EYL University? Shadi, tell them what we're bringing. Yes, EYL University has graduated. We revamped the whole entire curriculum, whole entire program. And now it is EYL University grad school.

24:32So it already includes over 100 past webinars. It already includes weekly webinars from industry experts. It already includes monthly financial planning calls with me. It already includes access to our private investment group on Facebook, movie club, book club. But what we have added is the Home Buyers Blueprint Reloaded with over 12 hours of video content was added to that. Once a week, we'll be doing video calls for mentorship, all things real estate. Yeah, you know how this works. Don't wait. Don't hesitate. Don't play yourself. Reward yourself. Here's what we're going to do for you. We're going to give you 50 % off for a limited time only.

25:0950 % off. And you're going to become an earner. See you on the side, y 'all. Yeah, yeah. Finally important. Lesson learned. You want to go into the Mavs? Yeah, so, I mean, when you buy the Mavs at this point, I mean, you're just a fanatic of basketball. You didn't really even have any ownership, like, tenure. Like, you had no idea. So, I heard and I heard plenty of stories that the players were actually coaching on what it is to be an owner, right? Like, Michael Finley and Nash. Can you tell us about that? I had no idea. There was only two things I, you know, I still, like, you know, in normal times, I'd still go play pickup.

25:39Like, I want the vaccine not only to feel safe, but so I can go play pickup again, right? Go back to the gym where I play. And, you know, so to me, I'm a ball is lifetime type guy, and I always have been. And like with Finn and Nash and Dirk and my guy, Eric Strickland, Greg Bussner, you know, these guys took me under their wing. Damon Jones even, you know, just all giving me feedback on, you know, what it's like to be a ball player, what you got to deal with as an NBA player and things they need. You know, I remember like the first day I bought the team, we had a guy, Gary Trent, his son now, Gary Trent Jr.

26:16On the Trailblazers. Right. And so G Trent, I remember, I'm like, what do you guys need? What can I do to make it easier for you to win games? And he goes, Cuban, he goes, this team is so cheap right now. We fly in to Oakland, California to play the Warriors. and we stay at a holiday inn with no room service. And so you got a whole team, your whole Mavericks team, walking down the street in Oakland, California, sometimes three in the morning looking for a 7-Eleven to get food. Do you think that's safe?

26:54I'm like, okay, two money, I got you. And so we upgraded to stay at Ritz-Carlton's. And then once we started doing it, everybody, all the teams started doing it. We started bringing, like, when I first got there, we spent more money on computer repair and computer training than we did on player development. I'm like, this is crazy. We're spending millions of dollars. I mean, we had Juwan Howard with a$19 million contract, which would be a good contract today. Right. And so I brought in all these former Mavs, Mark, you know, Greg Dreiling and Mark Ryan and all these guys. And they became our Moreland Wiley.

27:30They became our player development coaches and the whole NBA crushed me because I brought in these guys that like 15 of them, everybody basically had their own player development coach. And I paid the guys like 25 grand a year because they all just wanted to, the coaches 25 grand a year because they just want to get back in the game, right? Kiki Vanderway. And so they all had jobs now, which I'll put them in the NBA. A lot of them are still NBA player development guys. And so, but all the other NBA teams just torched me. What are you doing? I mean, people were writing articles, you know, how dumb is this guy?

28:03he's got 15 players and 15 coaches, right? Because there were no development coaches. You know, you had three coaches on the bench. You had your lead, you had your head coach, your lead assistant, and then maybe one other assistant, maybe two, right? And one of them helped, you know, guys rebound and, you know, coaches were supposed to work to develop guys. I'm like, that's crazy. You know, coaching is a hard enough job as it is. Playing's hard. You want to get people who work to develop your players. And we started doing it. And now all those player development staffs where teams have three, four, five, ten guys working.