Kevin O'Leary Says These 6 Money Moves Could Ruin You Financially

We all make mistakes, but when it comes to financial mistakes, some carry a bigger consequence than others. Some money mistakes are simply frustrating. And some money mistakes can take years (or even decades) to recover from. Investor Kevin O'Leary, best known for his "no-nonsense" advice on Shark Tank, has never been shy about calling out bad financial habits.

From taking on the wrong debt, mixing money with relationship dynamics, or neglecting retirement savings, O'Leary's warnings are aimed at helping people get ahead financially and simultaneously avoid costly mistakes. Here are the money moves he's been most outspoken about, and why he believes they're so dangerous.

Buying a home or combining finances with an unmarried partner

Mr. Wonderful (a nickname O'Leary has proudly adopted) has repeatedly warned against buying real estate or combining other finances with someone you aren't married to. Notably, O'Leary has specifically referred to this practice as "financial suicide." His concern isn't about the relationship itself, but instead the legal and financial complications in the event that things go south.

When couples who jointly own property separate, disagreements over ownership, mortgage payments, or the decision to sell can arise. This can also snowball into something even more expensive: legal battles. O'Leary argues that major financial commitments should come with legal protections, whether that is a marriage or a carefully drafted ownership agreement. His goal isn't to discourage relationships, but to instead avoid turning a breakup into a financial catastrophe.

Investing in a friend or family member's business

One of O'Leary's more specific and memorable pieces of advice is to limit investing in businesses tied to close friends or family. This means don't invest in your brother's passion project, whether it be a restaurant, a bowling alley, or a bar. He argues that mixing emotion with investing often clouds good judgment, making it difficult to evaluate risk objectively.

While he regularly invests in entrepreneurs on Shark Tank, those decisions are based more on financial analytics, not personal ties. O'Leary has even stated he has lost $750,000 by investing in a friend's startup venture. He suggests a one-time gift is often healthier than making a loan or becoming a business partner.

Carrying credit card debt while trying to invest

O'Leary has a shared belief with some other financial advisors in that few investments can reliably outperform credit card interest rates that often exceed 20%. This is why he says paying off high-interest debt should come before trying to grow wealth through investing. Otherwise, you're effectively earning returns with one hand while losing even more money with the other.

Mr. Wonderful believes the fastest way to lose money without realizing it is not paying off your credit card every month. He further points out that carrying expensive debt while contributing to investments with smaller gains is sabotage. Thus, eliminating high-interest balances creates a guaranteed return equal to the interest rate you're no longer paying.

Not making the most of your 401(k)

When it comes to your 401(k), O'Leary suggests saving and investing as early as possible so compounding works for you. He believes many people struggle with making meaningful contributions because their spending is greater than their earnings.

Simply enrolling in your employer's 401(k) plan isn't enough. Many workers set up retirement contributions once and never revisit them. This causes missed opportunities to increase savings, rebalance investments, or adjust their strategy as retirement approaches. Making small changes, like increasing contributions after raises or rebalancing annually, can significantly improve long-term results because of compounding.

O'Leary also emphasizes that retirement accounts should be actively managed rather than forgotten, especially because both market conditions and personal goals change over time.

Spending money to impress other people

Lifestyle inflation is another habit O'Leary frequently criticizes. He argues that many people increase their spending every time their income rises, which eventually puts them in a paycheck-to-paycheck cycle despite earning more than ever. During interviews, he's encouraged people to track every dollar they spend over a 90-day period. Most people are surprised by how much money disappears on everyday purchases.

So, rather than buying luxury items to project success, O'Leary says building wealth requires consistently spending less than you earn, while fighting the urge to keep up with the Joneses.

Letting emotions drive investment decisions

O'Leary has stated, "Business is not a place for feelings; it's a battlefield." He believes that one of your biggest enemies when investing can be emotion. Whether markets are soaring to new heights or tumbling to new lows, he argues that making decisions based on fear or excitement often leads investors to buy high and sell low.

Instead, try sticking to long-term investment plans, reviewing your portfolios objectively, and avoiding knee-jerk reactions to market headlines. Short-term volatility is inevitable, but Mr. Wonderful says disciplined investors are better positioned to build wealth because they focus on fundamentals over emotions.

Bottom Line

There's a common theme among Kevin O'Leary's toughest financial advice: avoid decisions that can create long-term consequences for short-term convenience or emotion. Whether it's taking on high-interest debt, mixing money with personal relationships, or falling victim to lifestyle inflation, the biggest mistakes often become more expensive the longer they are ignored.

One practical way to apply his advice is to schedule a yearly financial review. Review your debt, retirement contributions, investment strategy, insurance coverage, and major financial goals to make sure they all align with your priorities. Small adjustments made consistently over time can help you to build real wealth and make a greater impact on your long-term financial security.

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