Mark Cuban's 5 Best Passive Income Ideas

Mark Cuban is well known for his candid opinions and advice on topics ranging from politics to investing. The self-made billionaire doesn't hold back when he shares his two cents on how people can improve their money and get rich.

This borrows a page from billionaire Warren Buffett's playbook, as the “Oracle of Omaha” once said, “Diversity is a hedge against ignorance. [It] it makes very little sense to those who know what they are doing.”

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Cuban is known for approving investment opportunities that may be against most analysts or considered aggressive. But Cuban believes that if you know what you are doing, it greatly reduces the risk.

Although Cuban is not known as a passive investor, he prefers investments that can grow in the background while he focuses on his businesses, some of which provide additional income in the process.

Here's a look at the types of things a Cuban man invests in himself. Also, if you are looking for tips to start earning income, check this out.

According to Cuban, dividends put real money in the pockets of investors, giving them real world value by creating immediate income. For non-equity stocks, according to Cuban, value is a vague concept based on various market metrics.

Dividend-paying stocks are probably the closest investment Cuba has to “income.” In addition to these huge stock dividends, they pay quarterly dividends, guaranteeing income even when markets are down.

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For the most part, Cubans don't believe much in owning individual stocks. As he said, “I believe that non-dividend stocks are no more valuable than baseball cards. They are worth what you can convince someone to pay for them.”

However, he is changing his tune when it comes to AI-related companies. Cuban knows the field well and believes in the future of AI, suggesting that every company will need it to succeed or survive. So, a big part of his selection process when it comes to each stock is how good they are in the field of AI.

AI stocks are not known for generating income, but if they explode in value, they can turn into an open source of income when needed. For now, don't just passively invest in them in your portfolio, expecting them to do something.

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Cryptocurrency is not a true source of “income,” but rather a swing-for-the-fences that will burn or pay big dividends. As Cuban says, cryptocurrency has value because it is based in part on smart contracts.

This basic technology, Cuban believes, will ultimately create useful applications around the world. In turn, cryptocurrencies based on efficient smart contracts should have significant value. Unlike many individual investors, the billionaire doesn't just speculate blindly – he understands the underlying technology and sees its value.

That being said, Cuba is warning investors that they should put the money they are comfortable with losing into crypto. Cuban goes so far as to say that you should only invest in cryptos like Bitcoin and Ethereum “if you're really passionate and want to throw a hail mary.”

While Cuban and Buffett don't quite agree on crypto, with Buffett calling bitcoin “square rat poison,” they're definitely on the same page about cheap S&P 500 index funds for most investors.

However, the index has a long-term total return of about 10% per year. For long-term, consistent investments, an index can provide a valuable source of passive wealth.

As one of the main investors on “Shark Tank,” Cuban often invests in small private companies. This is another type of high-risk, high-reward investment and frankly, Cubans have access to more opportunities of this type than the average investor.

However, Cubans also often have to put in a lot more blood, sweat and tears than you would if you invested in a private company using a crowdfunding platform or mutual fund.

In other words, your investment in a private equity firm may be passive – and may generate income.

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