Everyone wants to take the money they earn, use it wisely and turn it into more money, right? This is exactly what the most successful billionaires in the world have done, and the average consumer can invest their money, too. Mark Cuban, the billionaire businessman, recently told MarketWatch in an interview his number one piece of investment advice: Pay off your credit cards.
He said that if there’s one investment you make right now — that will be the most profitable to you in the long run — it’s paying off your credit card debt. Cuban said that he, himself, struggled with credit card debt when he was in his 20s. He said that he eventually learned that the money he could save in credit card interest by not holding a balance on his cards was far more money he could earn by investing it.
He gave the example of holding a student loan with a 7 percent annual interest rate. He said that if you pay the loan, you’ll immediately earn 7 percent. The old axiom, a penny saved is a penny earned applies here. He said that the best thing about paying off your credit cards is this: It’s a guaranteed rate of return. Imagine your credit card has a whopping 19 percent annual interest rate attached to it: This means you’ll receive a guaranteed 19 percent return on the money you put into your card. Guaranteed returns on that level simply don’t exist in business in any other context.
Perhaps you’re struggling under a mountain of debt and your financial situation means you’ll never be able to pay it off. Going through the bankruptcy process could be the solution you need to free yourself from high-interest rates once and for all. Considering Mark Cuban’s advice, initiating the bankruptcy process could be one of the best investments you ever make.
Source: CNBC, “Mark Cuban: This is ‘the best investment you can make’,” Kathleen Elkins, accessed May 11, 2018