Kevin O’ Leary Says You Need Millions On Hand To Survive — ‘You Have To Get To A Place Where You Have $5 Million In The Bank’
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Kevin O’Leary, Shark Tank star and investor, sparked significant discussion with his assertion that individuals need $5 million in their bank accounts to ensure lifelong financial stability.
In an August 2023 YouTube video, O’Leary said, “You have to get to a place where you have $5 million in the bank,” emphasizing the importance of this amount to “survive the rest of your life, no matter what happens.” This statement, along with his detailed financial advice, has been a subject of both support and criticism among viewers and financial experts.
This amount, when invested to yield an annual return of 6% to 7%, can generate $300,000 to $350,000 in passive income, significantly above the median household income.
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He suggests setting aside this $5 million as untouchable money, using additional income for investments or riskier ventures without compromising the stability of the income-generating $5 million.
In response to his advice, one user summarized the core message of having ample funds for security with a touch of sarcasm: “‘Have enough money to not worry about money’ … got it.” Another humorously acknowledged the challenge O’Leary’s advice presents: “Great advice! I was doing it wrong this whole time. I just need 5 mill.”
To achieve this financial goal, O’Leary recommends several strategies. Building a business can be a lucrative avenue, but it comes with inherent risks. Focusing on cash flow, such as investments that produce actual income like dividends, is crucial. This echoes Warren Buffett’s principle: “The first rule of an investment is don’t lose money.”
Avoiding uncalculated risks, asking for fair compensation and being selective with investments are other key pieces of advice from O’Leary.
O’Leary stresses the importance of investing early. He suggests saving 10% of your income and investing in bonds and dividend-paying stocks.
He emphasizes discipline in saving, having a long-term investment strategy and understanding the difference between speculation and investing.
For retirement planning, O’Leary advises contributing at least 15% of your salary into a 401(k) account. This strategy, coupled with the power of compound interest, can potentially accumulate $1.5 million in the bank by retirement. He emphasizes adjusting lifestyle to save more and highlights the availability of investment apps that make stock market investing more accessible.
Financial advisers can play a key role in helping individuals achieve their financial goals, including reaching O’Leary’s recommended $5 million mark. They can provide personalized advice, guide investment choices and help navigate the complexities of financial planning to secure a comfortable retirement.
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*This information is not financial advice, and personalized guidance from a financial adviser is recommended for making well-informed decisions.
Jeannine Mancini has written about personal finance and investment for the past 13 years in a variety of publications including Zacks, The Nest and eHow. She is not a licensed financial adviser, and the content herein is for information purposes only and is not, and does not constitute or intend to constitute, investment advice or any investment service. While Mancini believes the information contained herein is reliable and derived from reliable sources, there is no representation, warranty or undertaking, stated or implied, as to the accuracy or completeness of the information.
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This article Kevin O’ Leary Says You Need Millions On Hand To Survive — ‘You Have To Get To A Place Where You Have $5 Million In The Bank’ originally appeared on Benzinga.com
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