6 Things Shark Tank’s Kevin O’Leary Says You Should Do With Your Money in 2015

Fans of ABC’s “Shark Tank” know Kevin O’Leary as “Mr. Wonderful.” The no-nonsense investor got his ironic nickname from his less-than-kind approach toward entrepreneurs on the show.

But O’Leary is not without his sage advice, and the businessman has a long history of success to back it. His second company, Softkey, for example, once acquired The Learning Network for $606 million before selling it for $4.2 billion to Mattel a few years later. The money O’Leary made helped him become a leading venture capitalist, mutual fund manager and television personality.

See what the money guru has to say about wealth and money, and how it relates to your finances.

Related: 6 Things Mark Cuban Says You Should Do With Your Money in 2015

6 Money Tips From “Shark Tank” Veteran Kevin O’Leary

1. Adopt Common Sense Financial Habits

Sometimes the simplest advice is the hardest to follow. In a LinkedIn article, Kevin O’Leary wrote that when people ask him how to get rich, he always answers the same way:

“Don’t spend too much. Mostly save. Always invest.”

To help you evaluate your spending habits, O’Leary recommended finding your 90-day number, which is your total income over three months minus your expenses over the same period. If your number is positive, you’re among the small minority who are spending wisely. If your 90-day number is negative, you’re among a vast majority of Americans who need to re-evaluate where your money is going.

2. Avoid Carrying Too Much Debt

On “Shark Tank,” O’Leary offered this sound advice: “Never let them see you sweat — and never pay with credit.” The first part of the quote is excellent advice for contestants on “Shark Tank.” The second half is advice to take home.

Maintaining debts can be debilitating for your credit score. An astounding 30 percent of your score is based on your outstanding debts, according to myFICO. High debt then can make it harder to get decent rates on loans, costing you more interest in the long run.

Related: How The Shark Tank’s Mark Cuban Became a Big Fish

3. Control Emotional Spending

Some consumers shop to feel better or because they were recently paid and want to treat themselves. But the joy you might get from buying something new is short lived, whereas the debt you tackle can last much longer. That’s why, according to O’Leary:

“Mixing money with emotions is a toxic combination.”

When you go out shopping, be mindful of your mood. Are you shopping because you’re upset or need a distraction? Recognizing what causes you to spend money impulsively can help you cut down on unnecessary expenses.

Meanwhile, hearing on the news that a company is performing well and choosing to buy stock without conducting further research can cost you. Getting excited about a company is fine — choosing to invest in them at the drop of a hat is not.

4. Take the Pain Out of Frugality With a “Fun Money” Fund

O’Leary is a strong believer in austerity, but not in total self-deprivation. The process of tightening your belt, reining in your spending and living frugally to achieve a healthy financial lifestyle is not a fun process, but it shouldn’t condemn you to a life of joylessness either. O’Leary recommended creating a “fun money” fund:

“The key is to include spending on fun things in your budget. Set aside a manageable percentage every week in a fund that will let you splurge with cash. Go out for lunch, get your hair done, or use your fun money to go on a vacation — do whatever you want, as long as you pay for it outright.”

With a vacation or shopping budget, you avoid accumulating credit card debt and get to splurge without the grief of having spent money. As long as you can reasonably fit spending in your budget, there’s little reason why you can’t enjoy it.

5. Invest in Dividend Stocks

For investors, O’Leary recommended dividend stocks, which offer a steady flow of income that can grow the longer the stocks are held. In an interview with Business Insider, O’Leary said:

“I don’t allow my portfolio managers to buy any stocks that don’t pay dividends, and we have done very, very well.”

Since companies that issue dividends are stable and flush with cash, dividend-bearing stocks are relatively low-risk investments. If a stockholder chooses not to take payments but instead uses a DRIP — a dividend reinvestment plan — they can take advantage of the multiplying force of compound interest.

6. Invest Steadily for the Long Term

In his commonly blunt style, O’Leary told Business Insider that his advice to entrepreneurs visiting the show is: “Don’t be greedy.” The same philosophy can be applied to investors. Overwhelming evidence and wide expert consensus shows it is essentially impossible to “beat the market” for an extended period of time.

Anyone can have a good pick or a lucky run, but instead of trying to turn a quick profit by playing the market, consider developing a well-rounded portfolio to healthily grow your money over time. If you’re setting up a retirement plan, consider your risk tolerance and how much you can afford to lose at any given period of your life.

Related: 13 Million-Dollar Businesses That Turned Down ‘Shark Tank’ Deals

Whether you lock down a budget for shopping or ramp up savings, you can take hold of your finances this year. Learn how to better manage your investments, live within your means and take pride in your savings.