On Friday, investor and "Shark Tank" star Kevin O'Leary explained “why you’re broke” — arguing that the first step toward building wealth is learning to resist everyday spending temptations.
O'Leary Says Consumer Culture Is Keeping People Broke
In a video posted Friday on social media, O'Leary said most people are stuck in a cycle of overspending, pointing to constant purchases of sneakers, shirts, and gadgets.
He argued that society is designed to push consumers toward buying things that provide momentary satisfaction but drain long-term financial security.
According to O'Leary, about two-thirds of people end up broke because they habitually buy items they don't need. He described avoiding these purchases as "extremely hard" because skipping them feels like "killing" money.
However, he stressed that developing this discipline is critical to building real wealth.
The 15% Rule O'Leary Says Can Change Your Financial Future
O'Leary urged people to save 15% of their income — a number he insists everyone can do, even if most choose not to, because it's not fun or glamorous.
That money, he said, should either go toward eliminating debt or into long-term investments like broad market index funds.
He warned that debt is the biggest barrier to wealth creation. Paying down credit card balances or mortgages, he said, is just as important as investing — and both contribute to financial independence.
Don't End Up 65 And Still In Debt
O'Leary said the long-term consequences of poor spending habits are severe. Many people, he noted, reach retirement age still owing money to banks and credit card companies because they never adopted consistent saving or disciplined spending.
"The outcome is very bad," he cautioned, urging people to choose discipline today to avoid financial hardship later in life.
Consumer Spending Jumps Despite Inflation, Income Inequality Pressures
U.S. consumers ramped up their credit and debit card use in October, marking the fastest yearly increase in card spending since early 2024, according to new data from the Bank of America Institute. The pickup came even as inflation and widening income disparities continued to burden many households.
The report, released earlier this month, found that average credit and debit card spending per household rose 2.4% from a year ago and 0.3% from September — the fifth consecutive monthly gain — with services seeing the strongest growth.
Holiday-related purchases climbed 5.7% from last year, even though the number of retail transactions has edged down slightly since January. That suggests consumers are paying more while buying fewer items.
Much of the spending increase came from higher-income households, whose October outlays rose 2.7%, compared with just 0.7% growth among lower-income families.
A separate Bank of America analysis showed that after-tax wages rose 3.7% for top earners but only 1.0% for those at the bottom.
Despite the disparities, checking and savings balances remain above 2019 levels across income groups. Still, only 38% of respondents in the bank's 2025 holiday survey said they feel financially secure.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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