'Shark Tank' star Kevin O'Leary shares what "I've learned to do, and what has really helped me in maintaining growth in my own personal investing...." » Subscribe to CNBC Make It.:
Saving is a cornerstone of financial health, but not everyone believes they can do it. In fact, a new CNBC Invest In You and Acorns Savings Survey of more than 2,300 Americans found that over a third of respondents said they don’t make enough money to meet their needs and save. And a Bankrate survey found one in five respondents (21 percent) don’t save any of their annual income.
But according to “Shark Tank” star and financial expert Kevin O’Leary, most people waste money, even if they don’t realize it, and that’s where you can find money to save and even invest.
“The truth is, there is a lot of crap you don’t need,” O’Leary told CNBC Make It. “What I’ve learned to do, and what has really helped me in maintaining growth in my own personal investing is, anytime I pick up something I’m going to buy, I say to myself, ‘Do I really need this?’
“Because if I don’t buy it, the money is going to be invested and make money every year for me while I’m sleeping.”
With April marking Financial Literacy Month, here are O’Leary’s tips on where to find savings.
Skip the Starbucks
O’Leary certainly has the means to afford a latte or two, but he doesn’t buy them, ever. O’Leary says he refuses to pay for non-essentials like takeout coffee, even if does just cost a few dollars.
“Do I pay $2.50 for a coffee? Never, never, never do I do that,” O’Leary tells CNBC Make It. “That is such a waste of money for something that costs 20 cents. I never buy a frape-latte-blah-blah-blah-woof-woof-woof for $2.50.” Instead, he makes it at home.
“I drink coffee, one cup every morning,” he explains. “It costs about 18 cents to make it, and I invest the rest.”
Streamline your wardrobe
“I think about all the crap I bought that I never used. I mean it’s amazing,” O’Leary tells CNBC Make It. “All the shoes, all the pants, all of the shirts that I never wore after the first time I bought them.
“What a waste of money.”
“I could have had that money making 7 or 8 percent in perpetuity” by investing it, he says.
O’Leary streamlined his shoe collection down to just the staples: Two pairs of Prada shoes, a pair of flip flops and a pair of sneakers for working out. As for his wardrobe, O’Leary says he wears just 20 black suits, with 20 black ties and 20 white shirts. He recommends others cut back on the amount of clothing they have, too.
“So if you’re 20 — listen to what Mr. Wonderful is saying here — you don’t need 50 shirts,” he says. You only need a handful of essentials, which he says includes six t-shirts, three pairs of jeans and three baseball caps.
Don’t splurge on your wedding
While finding little ways to save money day to day can certainly add up, forgoing a big, expensive splurge can have a major impact on your finances.
With the national average cost of a wedding at $33,931, according to a 2018 survey from The Knot, it’s a great place to cut back. It’s the reason O’Leary opted for pizza and beer at his wedding. O’Leary used the thousands he saved to invest and grow his business.
“I know it sounds romantic to spend a lot of money — it’s crazy to do that,” O’Leary says.
“Forget about spending a fortune, you don’t need a white dress for $22,000,” O’Leary says. “Save your money, invest it and later you can take everybody out for a great time on the interest you’re making off your bonds and the dividends your stocks are paying.”
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‘Shark Tank’ star Kevin O’Leary: Here are 3 simple ways to save extra money | CNBC Make It.
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