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If you are looking for tips from one of the most successful businessmen of all time, you should take a peak at this video by Kevin O’Leary.  It’s his tips for 20 year olds, but I found them useful for people of all ages and walks of life.

Top 5 Tips for 20 Year Olds from Kevin O’Leary

Speaker 1: It’s about gold-digging, and I experienced that myself. I love women that are honest about why they’re after you, and very often it’s money, particularly if they’re 30 years younger than you are.

[laughter]

Speaker 2: What do you mean?

Speaker 1: Just saying, George. Just saying.

Speaker 2: He’s Kanye all of a sudden right?

Speaker 1: Listen, guy, I think it’s pragmatic and I-

Speaker 2: I know they are not after me for my money dude. I work work at CBC. Not after me for my money.

Speaker 1: You look at life and 50% of my friends and more of them are divorced, and examining that process very often is a result of bad financial management, in both ways, too much of it, too little of it. It’s a very toxic potion if it’s not managed properly.

In life, the number one thing that people screw up on is this, they buy stuff they don’t need, it’s that simple. Go look at your closet sometime, 80% of the crap at the bottom of your closet are clothes you don’t wear anymore, and yet you paid for them because you thought you needed them and you wanted them. Imagine if you could turn all that stuff back to cash or it better still you never bought it, that cash would be in the bank right now making interest for you or an investment that pays interest or a dividend, but no it’s sitting at the bottom of the closet, dead money, that’s what that is. That’s a huge problem.

Think about this, let’s say you actually owe 200 bucks on your credit card and you’re passing a hot little coffee spot, and you’re thinking about getting up the cappuccino for two dollars and 30 cents. Don’t do it, pay off the 20 bucks first, don’t spend money on stuff you can’t afford. It costs 15 cents to make coffee, you’re paying somebody two dollars and thirty cents, the rest of that could have been used to reduce your debt, that’s the whole deal. Don’t buy stuff you don’t need. Make sure you go through every single month in a way that you respect money, that you somehow pay back.

Here’s an idea for you, something a little different, when you set out your holiday season, instead of using a credit card I want you to try something completely different. I want you to take out from your account all the cash you’re going to spend on gifts, in other words, make your list, decide who you’re going to give to and let’s say you decide you’re going to spend a thousand dollars, go get a thousand dollars, real cash. It’s a little bit more but you get the idea. And you say to yourself, you put this in an envelope, “This is what I’m going to spend, I’m not going to put any gift purchase on a credit card.” And the reason I like this strategy, and I’ve used it all through my life, is it’s finite, this bundle of cash is all you’ve got to spend, and it makes you think, “How should I allocate it properly? What should I buy?”

When you go through your list, let’s say you’re married and you think about your wife, you’re probably going to spend most there, if you have kids you’re going to spend there too, then you get into your relatives and friends, not everybody deserves to have a whole lot of dollar spent on them, very often it’s the thought that counts.

Well, my problem with this new-gen issue is all these condos are what I call shoebox condos. 440 square feet two-bedroom or studio and a half, two tiny bathrooms, no parking, pure commodities square box of cement. There is no value in it to me anyways as an investor other than it’s like every other shoebox condo, why would you make an assumption that to me it’s a depreciating asset, the building in ten years is an old shoebox condo, and so I think it’s worth less.

Speaker 3: Why does nobody understand that, why do these condos keep getting sold, and I’m looking at the sign because I just moved back from the States a couple years ago and I’m looking at them and they’re saying they’re 90% sold, why are they still sold? Who’s buying them?

Speaker 1: Because, as I’ve learned with my own staff, in many of these companies if these Gen X or Millenium kids whatever you want to call them, is they don’t want to own a car, so that makes a lot of sense, they want to walk to where they work, they want to be part of what’s hip downtown in any city, and then Coover Calgary Montreal. Montreal condo scene has never been more boring than it is, prices are as high as a thousand bucks a square foot. I was just looking at some metrics yesterday, and so I think the trend is your friend if you’re a condo developer, I questioned the value long-term because to me a condo is just a piece of cement that gets old and crusty. The bathtub is old and crusty and the sink is old and crusty. Why don’t you just rent it and get a new uncrusty condo in five years?

Speaker 3: When rates rise is what you’re saying.

Speaker 1: When rents are rising, the value of your crusty condo is definitely going to go down, so I don’t like that scenario, but I think the best education will be for these people, they’ll realize, “Ouch that hurt.” Once you get stung once and let’s say you lose 20% of shoebox condo, you won’t be doing a shoebox condo again, you’ll be renting.

Education is very important because it gives you a chance to do several things, first of all, test your skills in a competitive environment because that’s what’s happening in education, you’re with other students, you’re changing ideas, you’re working together, and it’s a first for many kids that had actually work within society. And secondly it’s the contacts you make throughout your entire career, whether it’s just high school, whether it’s college or you go onto postgraduate work, these are lifelong relationships. You may not remember what you study, but you remember who you met, and for me, I look back and I think of my MBA at Ivy, these are some of my most important contacts in business today. I can call them up they’ll always take my call, they know who I am, we know each other, who we are, and what we do in different sectors. Education is very important but I stress it’s not a prerequisite for success, it’s just part of the journey.

Tim Schmidt

A Florida-based Entrepreneur, Author, and Life Hacker, Tim Schmidt decided to take control of his retirement portfolio several years ago by setting up a self-directed IRA. This blog shares his thoughts and opinions on the top of retirement and investments. You can follow his career and travels on his Official Website as well as on his Instagram page.