Kevin O’Leary, outspoken investor and ABC star Shark Tankis calling for a financial mistake in Generation Z.
In a recent interview CEO’s DiaryO’Leary has turned her sights on rampant spending habits in Gen Z and could have cost them a fortune in their lifetime: squandering expensive lunches and daily luxury goods rather than investing in retirement.
“I can’t stand it when I see kids making $28 a year for lunch. I mean, it’s really stupid. In the context of putting it into an index fund, earn 8% to 10% per year over the next 50 years,” O’Leary told host Steven Bartlett.
O’Leary breaks down the math and drives his point home. If a young person invests only $28 a week (a single expensive lunch fee), the average annual rate of return of low-cost index funds is 8%, and then after 50 years, their annual rate of return will be nearly $800,000. This means it is obvious: the small amount of habit costs add up, which adds up to be a huge opportunity to accumulate wealth.
The cost of a small indulgence
O’Leary’s warning is nothing new, but it’s especially important with inflation and the high costs of squeezing the younger generation.
Millennials and Gen Z typically live in cities that are prone to access expensive coffee shops and delivery services, especially vulnerable to these “cuts of a thousand cuts” spending patterns. Surveys show millennials only spend $1,000 per year On coffee – Habits O’Leary Call “Financial danger.”
His advice is simple: brew coffee at home, bring lunch to work, and redirect these savings investments. O’Leary believes that these choices are not just thrift, but rather priority for long-term financial security over short-term indulgence.
Wealth construction rules
O’Leary’s approach to personal currency is rooted in discipline. “One of my rules will never outweigh myself in a 30-day or 60-day cycle. I have no debts,” he told the podcast host. He urged young people to track their income and expenses for three months (“90-day figures”) to have a clear understanding of their financial situation.
He also insists on the dangers of emotional spending. “We buy things with money, and these things often become ships that spend more,” O’Leary wrote in his book. The cold hard truth about men, women and money. He warned that mixing money with emotions can lead to bad decisions and suggested tips like freezing credit cards in ice to curb impulsive purchases.
Start business successfully
O’Leary’s financial advice goes beyond personal expenses. For aspiring entrepreneurs, predictive confidence is crucial, he said.
“Can you project your eyes and the way you stand out, can you project your confidence?” he asked. “You have to learn how to project yourself in front of your peers…if not, you fail…this is before you speak.”
He also stressed the importance of clear communication and financial literacy: “You need to express your thoughts in 90 seconds or less; those that get there in 30 seconds or less. This is the killer – you know your numbers. You don’t know your numbers. You don’t know your numbers, you should burn in hell.”
Is O’Leary’s suggestion realistic?
While O’Leary’s message is clear, unnecessary expenses and investing early – the crisis points out that saving at the rate he suggests is a difficult task for many young Americans facing High rentstudent debt and stagnant wages.
Nonetheless, O’Leary insists that building wealth is less meaningful and more accustomed to it. “Given that young Americans cannot rely too much on social security to retire, it is crucial to develop savings from childhood,” he said.
His most important thing is: “Spend money smart. A person should not let his emotions lock them in a long-term financial package.” For the Z Century, this could mean skipping today’s $28 lunch and retirement to $800,000 tomorrow.
Disclaimer: For the sake of this story, Fortune uses generated AI to aid in the first draft. The editor verified the accuracy of the information before publishing.
