"Shark Tank" star and entrepreneur Kevin O'Leary learned the value of investing early from his mother, Georgette, who invested 20% of every single 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.
She invested conservatively in bonds and dividend-paying stocks. She kept the same portfolio for 55 years and never touched the principal. O'Leary was shocked to discover what a wealthy woman she was by the time she died.
But O'Leary got another shocker earlier this year during the pandemic when he realized just how little many of his employees had in savings and investments.
"The reason I learned this is because they were panicking," he told The Penny Hoarder.
Now the man known as "Mr. Wonderful" is on a mission to teach financial literacy and the importance of investing early. He's the chairman of an investment app called Beanstox, available in the Apple app store and Google Play store. It automatically invests you in exchange-traded funds, or ETFs, based on your investing goals. The app charges $5 a month, though if you sign up in December, you'll get three months free.
O'Leary's message: Find $100 a week to invest, and make it part of your DNA. By the time you're 65, you could easily be a millionaire.
Ready to start investing your way to millionaire status? Follow these five investing tips from O'Leary.
1. Expect saving money to be really hard
O'Leary believes that pretty much everyone is wasting money on something. But when you commit to saving and investing that money instead, keeping that commitment isn't easy. "No matter what happens that week, no matter how bad that week was, you have to have the discipline of finding $100 and putting it to work," he said.
The world wants to take money from you, the "Shark Tank" star says. You're bombarded with the temptation to spend money, whether it's on new jeans, sneakers, games or phones.
"For all the stuff that the rest of the world wants you to give them money for, you have to have discipline," he said. "And it's really hard to say, 'No. This $100 is for me.'"
2. Have a long-term investment strategy
O'Leary has made millions and lost millions. He admits he's made some "really stupid choices along the way." But he's always taken a portion of the wins and put them aside in long-term investments to secure his family's future. "If you have no long-term investment strategy, you're naked in the wind, and you're in a very bad place when you reach 65," he said.
3. Use history as your guide
Some years the market will be up, and some years it will be down. There are no guarantees in investing, of course, but history is a pretty good guide. If you trust the stock market to do what it's done historically, which is deliver average annual returns of 6% to 8%, "you'll retire at 65 to 68 with a million and a half bucks in the bank," O'Leary said.
4. Understand the difference between speculation and investing
O'Leary takes a page from his late mother on investment strategy. "My style is to put money aside for my whole life and leave it invested," he said.
Still Mr. Wonderful has no problem with people day trading if they enjoy it. He just wants people to understand that it's not investing.
"Day trading is highly speculative, and each day you go into the market trying to second guess what's going to happen," O'Leary said.
With Beanstox, he's promoting long-term investing as building a baseline for your future.
Do that and you can spend whatever extra money you have however you want.
5. Never feel selfish for investing in yourself.
The biggest reason to invest for your own future: No one else is going to do it for you. "Thinking about your own future is not selfish," O'Leary says. "It's not selfish to think about you."
-- This story was originally published by The Penny Hoarder.
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