When it comes to making sure your retirement’s comfortable, “Shark Tank” businessman Kevin O’Leary knows a thing or two. He’s shared some important retirement advice over the years that’ll definitely help you to invest and save your money. Let’s take a look at his top tips for those golden years.
Get Smart About Your Money
Kevin often talks about how important it is to get a handle on budgeting and investing because the better you understand where your money’s going, the more of it you can put away for later. It’s something that you should do early on, and the best way to do this is by doing your own research. You could take a look at some financial blogs or read some personal finance books.
Start Saving Early
He also mentioned that you should start saving as early as you can because this means you can get more from compound interest. This way, your money will make more money over time. Of course, you’ll need to make sure your money is in an account with good interest, as there’s no point in saving if you’re not going to get anything from it.
Ditch Your High-Interest Debt
If you’ve got credit card debt with crazy high interest, Kevin’s advice is to tackle it as soon as you can. The interest you’re paying on it is a killer, and it’s using up money you could be saving for something else. You’re burning your money on by giving it to investors when you could be investing it.
Spread Your Investments
One huge mistake that O’Leary wants people to avoid is with investments. Diversifying your investments across different assets can reduce your risk and increase your returns. You’ll be able to protect yourself from any huge losses if one of your assets fails, which is why Kevin encourages people to build a well-rounded portfolio.
Maximize Your Contributions
Kevin has suggested taking full advantage of any retirement accounts you may have, like IRAs and 401(k)s, especially if your employer gives matching contributions. After all, it’s essentially free money. If you’re not maxing them out, you’re leaving a lot of money on the table that could really improve your savings.
Keep Costs Low
Investing isn’t free, but it shouldn’t be too expensive, either. O’Leary has previously spoken about how important it is to choose a low-cost investment option so it won’t reduce your returns with high fees. You can try index funds or ETFs, as they usually come with minimal fees, but they’ll still give you good exposure to the markets.
Prepare for Healthcare
It’s not all good news, though, as O’Leary has warned about the dangers of healthcare during retirement. He advises investing in a Health Savings Account (HSA) while you’re working so you can prepare. This kind of account will help you save for future medical expenses and also has tax advantages that could help your savings even more.
Have a Clear Goal
Kevin encourages people to set clear and achievable goals for their retirement savings because it can help them stay on track. Knowing what you’re aiming for can help you measure your progress and stick to your financial plan. You’ll also know if and when to make any necessary changes to it.
Check Your Investments
Kevin also warns against making an investment and just ignoring it, as this could lead to several issues. He recommends reviewing your investment portfolio so you’ll know how to adjust to any changes in your financial situation or on the market. This way, you can meet your retirement goals and react appropriately when you need to.
Plan for Longer
With people living longer, Kevin suggests that people plan for retirement like they’re going to live to 100. This might mean you’ll have to work longer and save more, but at least you’ll know you won’t outlive your savings. If you don’t end up using all of it, you’ll be able to pass the rest on to the next generation.
Think About Real Estate
Kevin claims real estate is a good, long-term investment strategy for retirement because it could give you a healthy amount of money. Real estate is a slightly more stable source of income that could be useful for you during retirement. Of course, it shouldn’t be your only source of income and should go alongside your other funds.
Understand Your Taxes
Different retirement accounts have different tax policies on them, which will affect your take-home during retirement. Kevin encourages people to understand how their accounts are taxed so they can be more careful with where they put their investments. This way, you can reduce the amount of tax you pay and increase how much money you get.
Use Investment Technology
Like most investors, Kevin encourages using technology to manage investments. Online platforms can help you track your performance. This will also help you make better decisions and can make the whole process of investing a lot simpler. After all, don’t you want control over where your money goes?
Saving and Living
While it’s important to save for retirement, O’Leary also believes in keeping a balance. He argues people shouldn’t sacrifice too much of what they have right now just for the future because this isn’t a great way to live. Instead, you should set a little money aside so you can enjoy a few simple pleasures now.
Reinvest Dividends
When you invest, you’ll get dividends, but Kevin has advised people not to be tempted to spend them. He suggests you reinvest that money back in so you can make some money from its compounding. After you’ve done this enough, your investment’s value will increase by quite a bit, and you’ll have a better financial foundation for retirement.
Get Professional Advice
If you’re not sure about how to invest, O’Leary recommends speaking to a financial advisor. A professional can give you personalized advice based on your financial situation and help create a plan for you with your goals in mind. They’ll also help you feel confident with whatever investment decisions you make.
Beware of Emotional Investing
Don’t let your emotions drive your investment decisions, as this will only lead to failure. Instead, Kevin encourages people to be more disciplined with their choices by focusing on long-term gains over short-term changes. You’ve got to remain calm and focused when you’re spending money.
Liquidity Over All
According to O’Leary, having access to liquid assets is important because it’ll allow you to cover any unexpected expenses. You won’t have to sell your investments if things go south because you’ll have your liquid assets. As such, you should always have access to funds you can use for emergencies.
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