It’s difficult to know where to invest your funds, especially when there are so many different investment alternatives available, such as stocks and bonds. Experts’ input might help you make well-informed decisions about what to do with your money in order to help you accumulate wealth.

Cuban is a self-made billionaire who is one of the financial industry’s most respected voices. This is especially true if you’re considering a higher-risk investment alternative, such as cryptocurrencies. Cuban’s guidance might be useful if you’re thinking about purchasing virtual currencies.

Here’s what Mark Cuban had to say about buying cryptocurrencies

Unlike prominent finance figures such as Warren Buffett, who are against cryptocurrencies, Cuban does not believe that putting money into virtual currencies is a terrible idea. In fact, he has stated several times that taking calculated risks is beneficial when growing wealth because millionaires and billionaires do not usually accumulate their riches by taking the safe approach all of the time.

However, while he believes there’s potential in crypto, he also acknowledges that it’s an untested asset with a lot of risks. He has referred to crypto as a “flyer” and compared it to collecting art, baseball cards, or shoes. He has also suggested putting money into crypto only if you’re a real adventurer and want to try the Hail Mary.

Cuban made a point of specifically mentioning Bitcoin and Ethereum as potential coins to invest in, but he also advised that “if you do that, you’ve got to pretend you have already lost your money.”

Despite his warnings, however, Cuban has invested in blockchain firms himself and owns cryptocurrencies. He’s willing to risk some of his own money because he clearly thinks virtual currencies have promise.

How much of your money should be in cryptocurrencies?

Even though Cuban has praised cryptocurrency investing, both in words and actions, he does not think that the amount of money spent to acquire virtual currencies should be limitless.

“I’d keep it to 10 percent,” he advised. And, in a nod to crypto investors, he recommended investing the rest of their money in a low-cost S&P 500 index fund. The S&P 500 is a stock market index that measures the performance of large U.S. firms and is one of the most dependable long-term investments available.

In other words, Cuban is suggesting you take a measured approach. If you’re going to invest in an unproven asset such as cryptocurrency, make sure you’re only putting money into it that you can afford to lose, and that the majority of your assets are invested in a low-risk choice with a proven track record.

This advice is sound, since you don’t want to put all of your eggs in one basket, especially when that basket contains volatile investments with little performance history like S&P index funds and may not pay off in the end. So, if you’re thinking about a crypto investment, Cuban’s advise to limit your purchase to 10% of your portfolio and select a safer investment for the rest of your cash is sensible.

Author: Steven Sinclaire

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