Mark Cuban once drove around a real hunk of junk — seriously. The billionaire Dallas Mavericks owner says the best pieces of investing advicehe got when young was to be as poor as possible first.

The “Shark Tank” star these days doles out a lot of advice to young entrepreneurs on CNBC CMCSA, +0.35% but he says it doesn’t take a million-dollar idea to become rich.

In fact, Cuban argues, anyone can be a millionaire if they have the right mind-set. It just takes time and frugality.

“When I was getting started, I used to read this book, ‘How to Retire at 35’,” Cuban told Money magazine.

The 1988 tome advised readers to save aggressively in order to gain financial independence.

“The whole premise of the book was that if you could save up $1 million and live like a student, you could retire,” Cuban said.

“But you would have to have the discipline of saving. I believed heavily in that book. It was a big motivator for me,” he said.

“I did things like having five roommates and living off of macaroni and cheese, and I was very, very frugal. I had the worst possible car — those types of things.”


Up to age 25, Cuban says, he didn’t drive a car worth more than $200. He once drove a Fiat X1/9 with, he said, “a hole in the floorboard.” Another car was a 1966 Buick LeSabre.

“It was crazy. But that was my decision. I was determined to save money. I was determined to be able to retire,” he said.

Life had other plans for Cuban. He made his first millions in the technology business and has since parlayed that stake into billions.

Scrappy startup founders with stars in their eyes fight to get on “Shark Tank” now, where Cuban and his castmates offer advice and compete to invest in fledgling companies.

Yet, he says, most people don’t have to be entrepreneurs to be financial winners. In fact, like his fellow billionaire and friend Warren Buffett, Cuban strongly endorses low-cost index funds as a way to build wealth.

“The key is living within your means. Saving money and putting some into a low-cost mutual fund — like an SPX SPX, +0.47%  fund — and living as inexpensively as you possibly can, will pay off dividends,” Cuban says.

Compounding magic

By SPX he means an index fund that owns the S&P 500 index of stocks, essentially, a low-cost, diversified way to own the whole U.S. stock market and avoid individual stocks.

Cuban’s larger point is that saving into a broad stock fund is enough for anyone to retire, thanks to compounding.

A dollar in a simple, low-cost stock index fund is likely to double within 10 years. Then that $2 will turn into $4 and then $8 and so on. “If you can find a way to save, if you can find a way to invest inexpensively in the market, you can start to build your net worth,” Cuban says.

Nobody is barred from enjoying the wealth-building magic of compounding. It doesn’t take luck or an appearance on a TV show to make it big.

All it takes, Cuban says, is frugality, discipline and time.

“You can start to make good things happen. I think that’s possible for everybody. I’m not saying that it’s easy, particularly if you have a family,” Cuban says.

“But if you can find that discipline, then you can save.”

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