Ever dream of retiring as a millionaire without having to earn a six-figure salary? Kevin O’Leary, star of ABC’s “Shark Tank” and chairman of O’Leary Ventures, shares his straightforward approach to building a substantial nest egg on an average income during an episode of “Wake Up with Marci and Hilary.”
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O’Leary recommends these nine tips and tricks to eventually make your retirement nest egg worth millions.
O’Leary stressed the importance of starting to save as soon as you begin working. By setting aside 15% to 20% of your paycheck and investing it wisely, you can amass around $1.5 million by the time you hit 65.
Sound daunting? O’Leary assured, “It’s not easy, but it’s doable.”
Before you can start saving, you need to know where your money is going. O’Leary’s recommended method involves two sheets of paper.
On one, write down every source of income over 90 days. On the other, every penny you spend.
This simple exercise reveals your spending habits and helps you adjust them so you can allocate more toward savings.
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To build a nest egg of $1.5 million, you’ll need to do more than just save money. You have to change the way you think about spending, and as O’Leary pointed out, “you have to modify behavior.”
Now that you’ve reviewed your spending and adjusted your budget, you have to stick to it.
Life is unpredictable. Divorce, mortgages and other financial responsibilities will come your way and potentially throw your goals off course. The key, according to O’Leary, is maintaining your financial independence through it all.
He said, “You must keep your own personal financial identity for your whole life.”
A good credit score is essential for financial health. O’Leary recommended starting with a credit card early on but using it wisely.
“Put a $100 on it each month and pay it off,” he suggested. This builds your credit score without leading to unmanageable debt.
Some of your largest expenses are also some of the most unavoidable. Things like rent, groceries and utilities can take a huge chunk out of each paycheck.
Instead of just paying these bills, O’Leary recommended using them to your advantage. For example, use a rewards credit card for these expenses. This way you can build up rewards while also increasing your credit score.