Kevin O'Leary Says This Money Mistake 'Is How People Get in Trouble'

Struggling to get a hold on your finances? Investor, entrepreneur and Shark Tank host Kevin O’Leary knows what you're doing wrong.

“The key is not to outspend yourself or your spouse or outspend yourself into debt in your family,” O’Leary says. “It’s about working within your means … and not spending and putting on credit card debt.”

This may sound like a straightforward idea, but it's one he says folks overlook all the time. If you're carrying debt with an annual percentage rate (APR) of, say, 23%, much of your payment goes toward interest — and then it becomes impossible to catch up.

“This is how people get in trouble,” he adds.

The real problem isn’t income

O’Leary — who turned early business ventures into billions and built a reputation as one of TV’s most disciplined investors — makes it clear the real problem isn’t how much people make: It’s how they manage it.

“People buy so much stuff they don’t need,” he says on an episode of the The Jaime Catmull Show. “Everybody’s guilty of this — the daily takeout, the subscriptions you forgot you had."

He points out that much of what people spend money on doesn't hold long-term value, which quietly creates financial pressure over time. In fact, Americans spend roughly $19 trillion a year on goods and services, according to federal data — much of it going toward nonessential, discretionary purchases that don't help build wealth.

The consequence of an impulse buy? "You took money, and you killed it,” O'Leary says.

The ensuing financial problems can affect everything else in your life.

“Fifty percent of marriages fail in America after five to seven years,” O’Leary says. “Not because of infidelity — because of financial stress.”

When spending habits aren’t aligned, the consequences can build. Research shows financial disagreements are a leading cause of divorce.

“One outspends the other. And then they get into trouble, and that’s when the fighting starts,” he says. “And it’s brutal.”

What financial freedom actually means

Success means something different to everyone. Despite his reputation for being wealthy, O’Leary says money alone isn’t the only goal of financial freedom.

“The definition of freedom is you can pursue the interests that matter to you,” he says.

That shift in thinking changes how people approach both work and money over time.

“If you want to live an extraordinary life … you have to pursue entrepreneurship because it gives you the freedom to do things that you ordinarily couldn’t do when you work for somebody else,” he adds.

To reach this goal, he says, willpower matters more than income. Without a plan — and a serious commitment to achieving it — even a high income won’t prevent the cycle he sees over and over again.

“It’s really about discipline,” O'Leary adds.