Kevin O’Leary, well-known money expert, entrepreneur and “Shark Tank” investor, isn’t shy when it comes to financial advice. Simply put, he tells it like it is, so you should listen when he says, “stop spending money on crap you don’t need.” Despite having an estimated net worth of $400 million, O’Leary is known for the frugal habits he uses to save money.
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While making decisions about what to cut and where to edit your spending habits can be tough, he stresses that even little changes help and can go toward savings and investments. Here are five frugal habits of investor Kevin O’Leary that you may want to consider for yourself.
Making His Own Coffee
Mr. Wonderful, as he known by some of his fans, doesn’t think anyone should be spending their hard-earned money on $3 coffees.
“Never — never do I do that — never. That’s such a waste of money for something that costs 20 cents,” he said. “I drink coffee, one cup every morning. It costs about 18 cents to make it, and I invest the rest.”
O’Leary applies this principle of frugal living to other things too, stating that people should simply stop spending money on “crap” they don’t need, particularly if they’re in debt. He forgoes this kind of extravagant coffee ordering so often that it helped him be able to start his own vintage with O’Leary Fine Wines.
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Treating Dating Like an Investment
O’Leary is not a fan of paying for expensive dates, unless it seems like a good return. According to him, people should look at dating as an investment. He explained, “You’re going to spend money and you’re going to spend time [on dates], so look at that significant other in the context of, ‘Do I want to spend time with them?’ and, ‘Do I want to invest money in them?'”
Though it may sound a little cold-hearted, O’Leary errs on the side of practicality. He says you can do low-cost dates that don’t have to be cheap, such as cooking or taking a walk.
Buying Only What He Needs
“You buy crap you don’t need every day,” O’Leary told CNBC Make It. He suggested avoiding this and continuing growth.
“Every time 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,” he said. “So, I don’t buy a lot of crap. I buy good stuff that I need, and I invest the rest.”
Bringing Lunch to Work
O’Leary doesn’t want you to waste money on buying lunch during the workday. In a TikTok video, O’Leary explained how doing that daily can cost you in the long-run.
“You know, you go to work, you spend 15 bucks on a sandwich. What are you, an idiot? It costs you 99 cents to make a sandwich at home and bring it with you,” said O’Leary. “You start to add that up every day, it’s a ton of money.”
He continued, “Most people, particularly working in metropolitan cities, are just starting out on their job, making their first $60,000, piss away about $15,000 a year on stupid stuff. And that’s what they should stop doing.”
Avoiding Fast Fashion
Finally, O’Leary said he doesn’t spend money on clothes he isn’t going to wear again.
“Most people buy more crap than they use. This includes men and women alike, especially when it comes to clothes,” explained O’Leary. “They love the feeling of clothing shopping, but the truth is, if you actually look at your closet, you probably wear the same 20%, 80% of the time, and the rest of the stuff you bought is wasted.”
Instead, he suggested investing in good-quality pieces and wearing them out. “I wear the same suit every day. I have 20 of them, so I don’t have to worry about my style anymore,” he said. “I travel with four at a time, and I burn them out. Then I throw them out or give them to charity.”
Caitlyn Moorhead contributed to the reporting for this article.
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This article originally appeared on GOBankingRates.com: 5 Frugal Habits of Kevin O’Leary
