Kevin O’Leary: This One Common Habit Is Keeping You Poor

This discipline isn’t just about avoiding expensive lunches or unnecessary clothing purchases. It’s about developing the mental framework to consistently choose long-term wealth building over short-term gratification.

“Not many people have that discipline,” O’Leary shared. “Wealthy people have that discipline. You meet them later in life, you realize when they were young and had nothing, even the ones that were employees their whole lives that are now financially free had the discipline to say no.”

The 15% Solution

O’Leary’s solution is straightforward: automatically invest 15% of your salary before you have a chance to spend it. He’s even built an app called Beanstocks specifically for this purpose, though he says there are many similar tools available.

“If you’re making $70,000 a year and you put 15% aside from when you’re 25, you’ll have over a million and a half dollars if you just invested it in the stock index in the S&P 500,” he explained. “That’s what history has told you.”

The key is automation. Removing the temptation to spend that money by having it invested before you ever see it.

Learning From His Mother’s Strategy

O’Leary’s investment philosophy comes directly from watching his mother’s success. She followed simple rules that anyone can implement:

• Never more than 5% in any one stock

• Never more than 20% in any one sector

• Focus on dividend-paying stocks and bonds

• Never spend the principal, only the dividends and interest

“When I saw the results, I said ‘That’s it. That’s how I’m going to invest for the rest of my life,'” O’Leary recalled. Her performance over 55 years “was extraordinary” and “beyond any hedge fund.”

The Compound Effect of Bad Habits

What makes O’Leary’s criticism so pointed is that he understands that the compound effect works both ways. Just as money invested early can grow dramatically over decades, money wasted on unnecessary purchases represents not just the immediate cost, but all the growth that money could have generated.