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Miami Herald
7 days ago
- Business
- Miami Herald
Shark Tank's Kevin O'Leary sends strong message on Social Security, ‘Ghost Money'
As Americans juggle everyday expenses such as rent or mortgage payments, transportation costs, phone bills, and groceries, many also reflect on how much they should set aside for savings and investments to ensure a stable retirement. Kevin O'Leary, a well-known entrepreneur and investor from ABC's "Shark Tank," has made a strong statement about retirement planning and Social Security. He stresses that Social Security alone is insufficient for a comfortable retirement and urges Americans to reconsider their financial strategies. Don't miss the move: Subscribe to TheStreet's free daily newsletter O'Leary advises retirees to aim for replacing about 65% of their pre-retirement income to maintain financial security in their later years. He is a firm advocate of 401(k) plans and IRAs, emphasizing their tax benefits and the value of employer-matching contributions. His financial guidance revolves around disciplined saving, minimizing debt, and adjusting lifestyle expectations to build a sustainable and secure retirement. One of the most critical points he underscores is that Social Security was never intended to serve as a retiree's primary financial safety net. Currently, the average monthly benefit sits around $1,900, translating to roughly $23,000 annually-an amount that often falls short of what retirees need for financial stability. Related: Shark Tank's Kevin O'Leary makes bold prediction on U.S. economy To strengthen their financial future, many workers turn to employer-sponsored 401(k) plans, which frequently offer company matching contributions - a valuable incentive for saving. For individuals seeking tax advantages, traditional IRAs allow pre-tax contributions, postponing taxes until withdrawals begin in retirement. Alternatively, Roth IRAs require taxes to be paid upfront but provide the benefit of tax-free withdrawals later in life. But O'Leary also offers his take on ways people can resist the urge to spend money and invest it instead. In his book, "Cold Hard Truth on Men, Women and Money," O'Leary explains his view on compound interest and what he calls "Ghost Money." "I love compound-interest charts almost as much as I love compound interest," O'Leary wrote. "There's no more tangible way to see money grow. Those charts are also a chilling way to watch money die." He then clarifies his view on Ghost Money. "Ghost Money is dead money, money wasted on stupid things, money that should have been invested instead," he wrote. "Let's put a cost on that kind of wasted money, and learn new ways to save a fortune for your retirement." More on retirement: Dave Ramsey sounds alarm for Americans on Social SecurityScott Galloway warns Americans on 401(k), US economy threatShark Tank's Kevin O'Leary has message on Social Security, 401(k)s O'Leary expands on his opinion about how Americans can save money to invest in their future retirement plans without relying exclusively on Social Security. "The average American regularly spends money automatically, unconsciously, on four common purchases: coffee, magazines, lunches, and alcohol," O'Leary explained. "What I'm going to show you is how casually money is flushed down the toilet." O'Leary highlights how small, unconscious spending habits can add up significantly over time. He points to common expenses such as purchasing two magazines per month for $10, buying coffee twice a week for $6, grabbing lunch once a week for $10, and indulging in a couple of happy hour drinks on Fridays for another $10 - all seemingly minor costs. However, O'Leary emphasizes that when these purchases are examined over a decade, assuming the costs remain constant, the financial impact becomes substantial. With 4% compounded interest factored in, the total amount spent grows considerably, illustrating how seemingly harmless spending choices can significantly affect long-term financial security. Related: Dave Ramsey sends strong message to Americans on 401(k)s Here is how O'Leary breaks down the lost financial opportunity on these expenses: "I want you to start being haunted by Ghost Money, to feel its loss when you spend on unnecessary items," O'Leary added. "I want this lost money to stand by your bed at night, like Marley over Ebenezer Scrooge, and shake its chains at your financial folly." Related: Shark Tank's Kevin O'Leary sends big Social Security message to all Americans The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
22-05-2025
- Business
- Yahoo
Here's How Kevin O'Leary Is Investing During Tariff Turbulence: Should You Do the Same?
Keeping up with tariffs has been a little bit like watching a tennis match — they go from one side to another almost daily. It can be challenging for an investor to keep up. At times like this, it can pay to listen to an experienced investor, like 'Shark Tank's' Kevin O'Leary, and follow their lead. Be Aware: Find Out: Here's how O'Leary in investing during the tariff turbulence and whether you should do the same. One of the biggest risks of the tariffs the Trump administration has proposed is that they will raise prices, which could lead to a recession. Federal Reserve Board of Governors Chairman Jerome Powell recently said while the Fed does not predict recessions, there is typically a one in four chance of recessions within 12 months at any given time. O'Leary gave his insight on the likelihood of a recession in a recent interview with CNN's John Berman. 'Let me just say that we've been talking about recession now for four years in a row, you may recall. Forecasters of recessions have been wrong for four years straight. … We're not in a recession right now.' O'Leary added that he is not currently investing as he would in a recession, since there is no recession at the moment. Read Next: O'Leary explained that, while tariffs make for 'a difficult, tricky situation,' market corrections are commonplace. 'The markets correct 20% all the time, almost every 18 months. … This is nothing new for the S&P 500,' he said, adding that these corrections are often buying opportunities. 'It's a value deal.' Professional investors commonly recommend 'buying the dip,' or investing during a downturn, as there are bargains to be had when stock prices fall. The volatility in the markets is a byproduct of the administration's tariff policies, according to O'Leary. 'There's a lot of volatility and that's what you get when you take these kinds of actions,' he said. 'No administration has ever taken on 60 trade negotiations simultaneously, let alone China on top of that.' O'Leary is well known for his long-term approach to investing, and nothing in his comments about tariffs or recession would indicate he's deviating from that. In his book, 'Cold Hard Truth on Men, Women, and Money,' he recommends the individual investor pare down spending to invest as much as possible into a 401(k) or other retirement account. By looking at your income and expenses over a 90-day period, you can see how much money you have to invest. If you want to invest more, you need to trim back your expenses. O'Leary recommends sticking to this approach and not worrying about a possible future recession. 'I would argue right now that people that count out the American economy are constantly wrong all the time.' Editor's note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on More From GOBankingRates 6 Big Shakeups Coming to Social Security in 2025 Sources CNN, 'Harvard Sues Trump Admin Over Threats to Cut Funding; U.S. Markets Look to Rebound After Selloff; Nearly Half of U.S. Teens Say Social Media Hurts Their Generation.' YouTube, CNBC Television, 'Powell on the possibility of a recession.' This article originally appeared on Here's How Kevin O'Leary Is Investing During Tariff Turbulence: Should You Do the Same?
