"Save 10% of what you're gonna make" — When Shark Tank's Kevin O'Leary shared his take on smart and consistent investing

Shark Tank investor and entrepreneur Kevin O’Leary has consistently emphasized the importance of disciplined financial habits. In a video posted on his official YouTube account on October 28, 2019, he addressed a college student’s question about the best way to start investing with limited funds.

O’Leary recommended that individuals allocate a portion of their earnings toward investments, saying:

"You should save 10 percent of what you're gonna make."

He explained that by following this approach consistently over time, even those with average salaries could build significant wealth.

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The power of saving 10%: Shark Tank investor Kevin O’Leary’s investment strategy

Kevin O’Leary outlined a simple yet effective investment strategy: setting aside 10% of earnings and investing in a diversified portfolio. The Shark Tank investor advised:

"If you're making five thousand five hundred dollars and invest it in a basket of stocks like an ETF... the concept of just using a single ETF that maybe have 20, 30, 50 stocks in it is the best way to do it."

This method minimizes risk through diversification while allowing investors to benefit from market growth over time.

O’Leary further explained that consistency is key. Regular contributions to investments, regardless of market fluctuations, can lead to long-term financial growth:

"Consistently maintain putting into this every month or two months whenever you can the 10% of your salary,"

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The potential long-term impact of this approach

O'Leary explained how keeping a 10% average salary saved and invested every month for many years would cause notable wealth development. He highlighted that an annual income of $52,000, maintained consistently through age 65, would create quite a lot of money, easily crossing several million.

O'Leary pointed out that the long-term average return on the market has been approximately 6-7% per year for the past 50 years, so disciplined investing is a feasible route to wealth creation. He recognized that investments in the stock market involve volatility but assured that systematic investing reduces risks in the long run.

"You'll be buying some when the stocks go down, you'll be buying some as they go up," he explained.

The Shark Tank investor also stressed that by maintaining consistent contributions, investors can take advantage of market fluctuations and dollar-cost averaging.

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The role of ETFs and conservative investment choices

To effectively use this strategy, O'Leary suggested that ETFs, which diversify by placing several stocks in a single investment, be invested in. He stressed the existence of conservative ETFs, specifically dividend-paying ones, which will provide passive income and profit from market growth.

However, O'Leary did not name any specific ETF to invest in. This is in line with his general investment approach, where he values consistent, long-term growth above high-risk, speculative investments. The Shark Tank investor emphasized the value of becoming accustomed to a disciplined investment practice early in life and said:

"The fact that you're thinking about it is fantastic... stocks are terrific over a long period of time."

O’Leary’s advice highlights a straightforward yet effective approach to investing: consistently setting aside 10% of earnings and investing in a diversified portfolio.

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Shark Tank premieres every Friday at 8 PM ET on ABC, and you can stream episodes later on Hulu.