“Shark Tank” investor and entrepreneur Kevin O’Leary has a few ideas when it comes to retirement advice. From focusing on cash flow to contributing at least 15% of your salary into a 401(k) account, O’Leary has frequently provided tips on how to be better prepared to enter your golden years in a more secure way.
Check Out: 7 Bills You Never Have To Pay When You Retire
Try This: The Surprising Way You Can Get Guaranteed Retirement Income for Life
Here are some of the retirement tips he swears by.
Earning passive income doesn’t need to be difficult. You can start this week.
Contribute at Least 15% of Your Salary to a 401(k) Account
Concerning retirement planning, O’Leary advised contributing at least 15% of your salary to a 401(k) account. As Benzinga reported, by doing so and taking advantage of the power of compound interest, you could potentially amass $1.5 million in the account by retirement.
“The average salary in America is $60,000,” O’Leary said on an episode of “Good Morning America,” as GOBankingRates previously reported. “If you invest 15%, you’ll end up with $1.5 million in the bank after a career, because it compounds with market returns of 6% to 8%. And you can do it with anything — all these apps you’ve got that are available out there, fintech apps, you could download and do this. You must invest 15% — minimum.”
Learn More: How a Trump Win in 2024 Could Impact Your Retirement Savings
Invest Early
Another tip is to start saving and investing early, O’Leary said. As The Penny Hoarder reported, this is something he learned from his mother, who invested 20% of every paycheck from the time she was a teen working in a clothing factory.
“She insisted that he save 10% of the birthday checks he got from his grandmother, as well,” according to The Penny Hoarder.
Be Disciplined About Your Investments
In a 2021 YouTube video, O’Leary said you should take $100 a week and invest it over a long period, as GOBankingRates previously reported.
“The markets give you somewhere between a 6% and 8% return over long periods of time,” he said in the video. “[If] you take $100 a week and you start putting it into the stock market and let it grow over 30, 40 years, if you do that and you have that discipline, you’ll end up a millionaire in your 60s, where you really need to have some money to retire with. So I think that’s a pretty pragmatic strategy.”
He also added that not putting aside $100 a week for retirement is “the biggest money mistake people make,” according to CNBC Make It.
Eliminate Unnecessary Spending
O’Leary suggested, in a 2016 Facebook post, that frugality is one key to unlock financial freedom.
“Money might not buy happiness but I can promise you one thing… it’s A LOT easier to be happy with financial freedom!! I challenge you to start your journey toward financial freedom today by taking three steps: spend less, save more, invest the rest,” he wrote in the post.
Don’t Rely on Social Security
In speaking with The Motley Fool, O’Leary warned young people against relying too heavily on programs such as Social Security.
“You can’t be guaranteed when you’re 65 that anyone will be there for you. You have to take care of yourself,” he told The Motley Fool.
More From GOBankingRates
This article originally appeared on GOBankingRates.com: Kevin O’Leary: 5 Retirement Planning Tips He Swears By
