When celebrities or athletes hit it big, their fame often opens doors to making serious money. But according to billionaire investor Mark Cuban, many of these stars make poor financial choices when they try to grow their wealth. On a recent episode of the Club Shay Shay podcast with Shannon Sharpe, Cuban shared some straightforward advice: “Don’t invest in the restaurant, don’t invest in the clothing label, don’t invest in the liquor company … or music. That is the death!”
Cuban’s reasoning is simple—these businesses are just too easy to get into. He explained that industries like restaurants, fashion, and liquor are packed with competitors, making it hard to stand out. He even challenged Sharpe, asking if he could name one athlete’s clothing brand that has been wildly successful. Sharpe couldn’t.
Cuban pointed out that businesses with “no barriers to entry” are especially tricky for new investors. Barriers to entry—like strict government regulations, specialized technology, or patents—create challenges that keep out many competitors. Companies that can overcome these hurdles are more likely to thrive. For example, pharmaceutical giant Novo Nordisk spent billions developing the weight-loss drug Ozempic, obtaining FDA approval, and setting up manufacturing facilities. This massive effort has paid off, as Ozempic is now widely used for treating obesity, with limited competition driving up sales and profits.
On the other hand, starting a restaurant or a clothing brand doesn’t require nearly as much time, money, or expertise. The low entry costs mean almost anyone can jump in, flooding the market with options. This creates stiff competition and makes it hard for even great ideas to succeed. Cuban pointed out that full-service restaurants often operate on razor-thin profit margins—typically between 3% and 5%.
Cuban had another important tip for anyone who suddenly finds themselves with a lot of money: hire a professional to manage it. “It cannot be your friend,” he warned. “It’s got to be somebody who’s done it for big-time people.”
But here’s the twist—Cuban isn’t just saying “avoid the flashy stuff.” He’s also suggesting that investors look at industries most people wouldn’t even consider. Think pest control, waste management, or insurance. These “boring” businesses might not make headlines, but they can be goldmines for those willing to do their homework.
Take Warren Buffett, for example. The legendary investor has built his fortune by betting on undervalued, overlooked businesses. At the end of 2024’s third quarter, Buffett’s portfolio included Chubb Limited, an insurance company, and DaVita, a healthcare provider specializing in kidney treatments. These aren’t flashy industries, but they’re steady, profitable, and often ignored by the competition.
For investors and entrepreneurs, Cuban’s message is clear: skip the glamour and focus on businesses with real potential. Whether it’s energy, logistics, utilities, or software, sometimes the less exciting choices can be the most rewarding.
