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Recently, I looked in on Mark Cuban's blog. People dismiss the millionaire entrepreneur because he's boisterous, and you certainly haven't experienced a Dallas Mavericks basketball game unless you've been within earshot of him -- which is generally the entire arena.
However, if you read his blog, you'll get some quiet insight into many things. He recently posted an article about investing in yourself, and it got me thinking about ways everyday Americans can achieve what I call "soft money returns." Now I don't mean feathering your mattress with dollar bills and taking a nap. I mean savings that add up over time, and ways to protect yourself from catastrophe.
It's all you
The overriding lesson Cuban offers is this: "Invest in yourself. Do the things that can get you closer to your goals and dreams. It won't come from a brokerage commercial. It will come from preparing yourself, working hard and standing apart from your competition. You, Inc. is the best stock you can ever buy ... if you are willing to do the work."
This should be your primary investing principle. Here are a few ways I invest my time to find soft money.
If you've ever bought stuff from the Staples (Nasdaq: SPLS ) and Office Depot (NYSE: ODP ) websites, you've probably run into one of my favorite soft money opportunities. After making your first purchase, you'll often receive valuable online purchase coupons. A $10 off a $40 online purchase coupon is what I call a 25% "soft money return."
Buying online has other benefits. Not only do I get discounts, but I save the time and expense of traveling to a store. Plus it's a win for the companies I buy from, as the discounts create customer loyalty and keep shoppers out of competitors' stores. Staples and Office Depot are good at this, although Staples has done a much better job of turning its strategy into sustainable profits. And of course, Amazon.com (Nasdaq: AMZN ) has created an entire model around it, with sales growing at a 30% annual clip for the past five years. The more a retailer can emulate Amazon, the more it can save on the costs of maintaining physical store locations.
Stick it to the banks
Citigroup (NYSE: C ) , JPMorgan Chase (NYSE: JPM ) , and Capital One (NYSE: COF ) routinely offer 0% balance transfer checks that I use to my advantage. Checks like these typically hit you with a fee of 3% or more, but you can get a no-interest loan for as long as 21 months. That translates to an annual cost of less than 2%.
Depending on what you do with that money, you can even turn balance transfer checks into a cheap leverage opportunity. Plenty of dividend-paying stocks yield more than 2%. Personally, I look to preferred shares to maximize income and aim for greater stability. If things go right, I can collect dividends for more than a year and then repay my credit card when the balance transfer offer expires, pocketing the profits. It's not a no-lose strategy, but it's one that can serve you well if you're comfortable with the risk involved.
Finally, soft money returns also include protecting yourself. Make sure you are properly insured for your home and auto. A $50,000 liability policy isn't going to suffice if you kill someone in a car accident. The cost of insurance is a pittance compared to what you could lose. I consider that an infinite soft money return. Similarly, replacement value insurance costs a bit more, but if your house burns down and you are underinsured, it's like burning all the money you put into it over the years.
These are just a few of the simple yet often overlooked ways to create value for yourself. They may seem small, but they unquestionably add up over time. They all lead back to one thing -- investing in yourself, your goals, and your dreams.