Kevin O’Leary of ABC’s Shark Tank Shares Debt & Finance Tips
A recent CNBC article turned to best-selling author and Shark Tank co-host Kevin O’Leary for his insight on the do’s and don’ts of debt, outlining top tips that will have your financial future looking more bright. As the feature describes, “Americans hold $8.88 trillion of mortgage debt, according to a February report from the Federal Reserve Bank of New York,” which marks “the largest type of household debt in the country.”
According to O’Leary, homeowners should plan to have their mortgage and all of their other debts paid off by the age of 45, which he calls a “turning point” because “the game is more than half over” and that you need “to use the rest of the innings in that game to accrue capital.” A study released by the American Economic Association Papers and Proceedings indicates that more Americans are retiring debt with ever: “more than 70 percent of Americans between the age of 56 and 61 were in debt in 2010.”
Contrary to other forms of debt, such as student loans or a hefty credit card bill, “taking out a mortgage on a home that appreciates in value can be a smart decision. In 2017, homeowners with a mortgage saw the equity in their home increase in value by an average of $15,000 according to CoreLogic.”
O’Leary says that if you do plan to purchase a home and take out a mortgage, you should aim to pay it off as quickly as possible and try to pay 20 percent more than the payment if your bank allows it. Financial experts Suze Orman and David Bach agree with O’Leary’s sentiments, as Bach says he had clients that were able to retire when they were just fifty years old simply because “they had paid their mortgage off early.”
Not all experts are in the same boat, however, as they point to tax implications and “potentially lucrative investments in things like stocks or bonds” that could prove better in the long term than focusing solely on debt repayment. At the end of the day, it’s important to ask yourself a few key questions:
1. Where can you find the greatest ROI?
2. Are you willing to take risks?
3. How liquid are your finances?