Mark Cuban, Barbara Corcoran and other self-made millionaires and billionaires didn’t simply happen upon success. They made smart decisions and investments along the way, all of which helped them build wealth and which could help you, too.
There are no guarantees that these investments will make you rich. Still, according to people with experience, here are five of the smartest things you can do with your money.
Warren Buffett: Invest in companies you know
If you’re investing your money in the stock market, “never invest in a business you cannot understand,” says the self-made billionaire and investing legend.
Stick with companies and industries you’re familiar with because, at the end of the day, “risk comes from not knowing what you’re doing,” Buffett says.
Barbara Corcoran: Invest in your wardrobe
When the real estate queen rented her first apartment in 1973, she collected a $360 commission check, ran over to Bergdorf Goodman and “blew it on a new coat,” she says. “It was the smartest thing I could have done with the money because, in it, I felt powerful.”
Corcoran, who now stars on ABC’s “Shark Tank,” was onto something. As research shows, dressing for success can work: When employees wear nicer clothes, they can be more likely to achieve more.
David Bach: Invest in a home
The self-made millionaire and personal finance expert says buying a home is an escalator to wealth.
What’s more, “if millennials don’t buy a home, their chances of actually having any wealth in this country are little to none,” Bach says. “The average homeowner to this day is 38 times wealthier than a renter.”
Richard Branson: Invest in your relationships
“The key to success in business is all about people, people, people,” the billionaire entrepreneur writes on his blog. “It should go without saying, if you look after your people, your customers and bottom line will be rewarded too.”
In fact, “the most important skills I had to learn to be successful were people skills,” 67-year-old tells CNBC Make It. As for how to develop solid interpersonal skills, paying attention and being a great listener are key.
Mark Cuban: Invest in yourself by paying off debt
The best investment anyone can make is “paying off your credit cards,” says the self-made billionaire. “Paying off whatever debt you have.”
The money saved on interest by not having debt is better than any return you could get by investing your money, he says: “Whatever interest rate you have — it might be a student loan with a 7 percent interest rate — if you pay off that loan, you’re making 7 percent. That’s your immediate return, which is a lot safer than trying to pick a stock or trying to pick real estate, or whatever it may be.”