Retirement Retirement Planning

Kevin O'Leary Says These 5 Purchases Are a Waste of Money in Retirement

The Shark Tank investor's spending rules land harder without a paycheck.

By Josh Koebert , Edited by Laura Hohenstein

Updated Nov. 5, 2026

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Kevin O'Leary keeps coming back to the same rough number. He has said that 15% to 20% of what many people spend each day goes to what he calls "stupid stuff" — things they don't actually need. The "Shark Tank" investor has built a personal brand around hunting that waste down, starting with his most famous example: the cup of coffee.

"Do I pay $2.50 for a coffee? Never, never, never do I do that," O'Leary told CNBC Make It in 2017. "That is such a waste of money for something that costs 20 cents." He makes his own at home for pocket change and says he invests the difference.

That math is easy to shrug off while a paycheck is still landing. It gets less forgiving once the paycheck stops. Here's a look at the spending O'Leary keeps calling out, and why it hits harder when you are trying to save money in retirement.

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Daily coffee runs

O'Leary's coffee example stands in for a bigger point. Small, repeating purchases add up fast, and most people never run the numbers.

He says he drinks one cup every morning, made at home. "It costs about 18 cents to make it, and I invest the rest," he told CNBC Make It. In the same interview he added, "I never buy a frape-latte-blah-blah-blah-woof-woof-woof for $2.50." He has kept repeating the line as prices have climbed, more recently telling people to stop buying $5.50 coffee.

For a retiree living on Social Security and withdrawals from savings, a daily coffee-shop habit isn't a rounding error. It's a repeat subtraction from a budget that isn't growing.

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Convenience buys like takeout and bought lunches

His coffee complaint extends to anything bought for convenience rather than need, including takeout and lunches bought instead of packed. In a podcast appearance in June 2026, he made the point more broadly: "People buy so much stuff they don't need," he said, pointing to daily takeout and subscriptions you forgot you signed up for.

Government spending data shows how big that category gets. In 2024, the average U.S. household spent $3,945 a year on food away from home, out of $10,169 on food overall, according to the Bureau of Labor Statistics. That money leaves in small, easy-to-ignore amounts — exactly the pattern O'Leary is describing.

Clothes you never wear

O'Leary is blunt about closets: He says most people buy more clothes than they use. By his telling, you probably wear the same 20% of your closet 80% of the time, and the rest of what you bought is wasted.

That ratio is a rule of thumb, not a measured statistic.

The behavior behind it is easier to see in the spending numbers. Clothing and related services made up about 2.5% of average household spending in 2024, and it was one of only four categories where spending fell from the year before, per BLS. Even a small category can hold money that could have gone somewhere more useful.

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Lifestyle inflation that outpaces income

O'Leary also warns against letting spending creep up every time income does. A raise quietly turns into a bigger apartment, a nicer car, or pricier everyday habits, until spending catches up with what's coming in.

In retirement, the problem runs in reverse. Income usually stops rising, but habits built over a career don't shrink on their own. The 2026 EBRI/Greenwald Retirement Confidence Survey found 41% of retirees say their expenses turned out higher than they expected. Transamerica Institute's 2025 retiree survey found something similar, with 34% of retirees saying their current expenses are more than they anticipated.

Anything bought without asking 'do I need this?'

His broadest rule isn't about one category at all. It's a pause. "Do I really need this?" he asks himself before buying anything, he told CNBC Make It, because "if I don't buy it, the money is going to be invested and make money every year while I'm sleeping."

He doesn't apply the rule evenly to his own life. In an Instagram video reported in August 2026, he showed off his everyday black jeans: "Walmart special, 29 smackaroos. That's how you save dough." He has also said his underwear costs $120 a pair and that he loves them, in a 2018 CNBC Make It interview.

That contrast is useful rather than hypocritical. Frugality isn't cutting everything. It's spending on what you actually care about and trimming what you don't.

Why the stakes change on a fixed income

For working adults, a wasteful purchase is a setback. For retirees, it can be a bigger problem, because no raise is coming to cover it. Once income shifts to Social Security and withdrawals from savings, a dollar spent on something unnecessary can't be replaced with extra hours or a promotion.

The 2026 EBRI survey found retirees' confidence in having enough money to live comfortably fell 5 percentage points, to 73%. At the same time, three in four retirees said they can spend money how they want, within reason. That mix — feeling free to spend while confidence slips — is where small leaks can do real damage over a retirement that may last decades.

The Consumer Financial Protection Bureau (CFPB), the federal agency that oversees consumer finance, offers a free budgeting toolkit called "Your Money, Your Goals." One of its tools is a simple worksheet of ways to cut expenses, which is a reminder that this is a common squeeze for people living on a set monthly income.

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The closet test and the pause

O'Leary's practical takeaway comes down to two habits. First, actually look in your closet. If most of what you wear comes from a small slice of what you own, the rest is money that could have gone elsewhere: savings, debt payoff, or things you'd actually use.

Second, stop for a second before any non-essential purchase and ask whether you need it. The point isn't to never spend. It's to make spending a choice instead of a reflex, which matters more once there's no raise to make up for a bad month.

Bottom line

O'Leary's rules aren't really about coffee or jeans. They're about asking whether a purchase earns its spot in a budget, especially a budget that has stopped growing. Free worksheets like the CFPB's can help turn that question into an actual plan, and some people prefer to work through it with a financial professional.

The payoff isn't shaming yourself over a latte. It's making the right moves and spotting where your own wasted spending is hiding, and deciding, on your own terms, whether you want to keep it.

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