“The biggest mistake teens make is the assumption that debt is free,” says Kevin O’Leary, financial expert and star of ABC’s “Shark Tank.”
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“People use credit cards in a way that’s really extraordinary. They assume that it doesn’t cost anything to put anything on credit.”
The truth is, however, most credit cards carry hefty interest rates if you don’t pay off the balance every month. In October, CNBC reported that the average credit card interest rate spiked to 17.01 percent from 16.15 percent a year earlier and 15.22 percent two years ago.
“The fact is, the interest rates on credit cards are astronomical. The returns there are so high, even I can’t make that when I invest,” he says, “which is why I invest in credit card companies.
“Don’t let me make money on you.”
Paying so much interest “is crazy,” says O’Leary.
Instead, “Don’t spend more money than you bring in. Very simple concept,” he says.
And instead of giving a teen a credit card, give them a debit card. “That way, they can buy things with a card — they don’t have to carry cash — but they can constantly check online how much money is left in the bank account. When there’s no money left in the account, they can’t buy anything, and that’s a good thing,” says O’Leary.
“That’s how you start to understand: Don’t spend more than you have.”
A 2017 T. Rowe Price survey found that 44 percent of parents are extremely reluctant to discuss money with their kids. But talking about money and teaching kids the basics should start way before their teen years, O’Leary advises.
“I think kids should be taught at the age of 5 onward where money comes from,” O’Leary says. “We do a very poor job in North America telling kids about finance. We teach them sex education, geography, math, reading, all kinds of learning skills, but we don’t tell them about debt. No wonder they get into trouble as soon as they get a credit card.”
“Debt is a bad thing. Understanding where money comes from is important,” O’Leary says. “Make money a part of the family at the dinner table. Talk about where it comes from, how you make it and how hard it is to have.”
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This is why teens should avoid credit cards, according to Kevin O’Leary | CNBC Make It.
the biggest mistake teens make is the assumption that debt is free people use credit cards in a way that's really extraordinary they assume that doesn't cost anything to put anything on credit the fact is the interest rates and credit cards are astronomical paid twenty one percent interest is crazy don't spend more money then you bring in very simple concept if you do spend more than you bring in it ends up on your credit card and you pay sometimes over twenty percent interest I would never let anybody charge me 20% interest on anything maybe it's not a good idea to give a teen a credit card here's a better idea give them a debit card that way they can buy things with the card they don't have to carry cash but they can constantly check online how much money is left in the bank account when there's no money left in the account they can't buy anything and that's a good thing that's how you start to understand don't spend more than you have
In this malayalam financial tips video, I explain the 10 most common money mistakes that have to be avoided in order to save money and become rich. These are money saving tips basically. These money mistakes have to be avoided by financial education so that money can be saved and your personal finance management can be better.
These are things you should never do with your money. If you want to be rich while you’re still young, then you’ll need to save your money. Do these things with your money instead. First thing to never do with your money, never keep your money in a bank instead of investing it. This one is a huge mistake made by many people including myself. With the power of compound interest, your money will become millions with time. $400 a month in 40 years becomes over $2.5 million dollars. You can’t save to become rich, saving $400 a month in 40 years will get you only $192,000. Second things to not do with your money, never borrow money you can’t afford to pay back. Credit card debt is a huge problem in America. Imagine paying 15% a year on debt you can’t pay back. This is why it’s important to pay back all your debts as soon as you can. This means not wasting money by going out or buying expensive things. Third thing you shouldn’t do with your money, don’t waste your money on trivial things. Bottled water is a huge waste and can cost you $500 a year. Expensive nights out at the club, casino, or a fancy restaurant is not worth the experience, a night out with friends or loved ones is much cheaper and better at a well priced place. Monthly bills that are too high like a gym membership or phone bill, reduce those if you can. Don’t buy random stuff from Amazon, it can become an addiction. The fourth thing to never do with your money is renting instead of buying in the long term, a mortgage can make buying very affordable. The last things to never do with your money is paying for college if you want to be an entrepreneur. Instead of wasting money on student loans, start a business today for little money. These are the things you shouldn’t do with your money if you want to be rich in life.
hi I'm Monken this is the monk way let me ask you one question do you wanna be rich while you're still young capacitor is yest and watch this whole video where you will stay poor if you don't do any of these things I mentioned and congratulations you will be rich very soon and just you know I'm not blowing smoke my net worth is over three hundred fifty thousand dollars right now subscribe hit the bell and leave a like for more interesting videos I make them every day and to join the contest to win a lifetime membership to my investing group work for four hundred dollars just be subscribed leave a like and write comments about anything I pick a winner every week last week's winner was unknown unknown enjoy your free lifetime membership to become rich as a young person you don't have to sacrifice everything but you do have to save a good amount of your money in my past videos I taught you that you can't become a millionaire in just 40 years with $400 a month investing in an index fund that returns 10% a year where turned out four hundred hours a month into a million but if you wanna be rich in the next ten years you have to save more than that so let's look at some things you should never do with your money one of the most important things do not do with your money is leaving it in the bank I can't stress it enough because so many people are doing this I'm even guilty of doing this for four years before I learned it invest the banker will ask me why I'm not investing his money every time I go to the counter four years is not bad but don't delay this long that necessary start investing at eighteen you cannot save to become a millionaire unless you have an amazing job this is why you must invest your money no matter how much you're making if you can save laundry dollars a month fifty dollars a month or even twenty dollars a month invest it or will be gone let's look at how much you have if you say $4 a month $4,000 a year for 40 years after 40 years you end up of 192 thousand dollars does nothing American investing in an index fund with just ten percent returns a year you will have over 2.5 million dollars that's 13 times what saving your money will get you if your parents taught you to save your money under your bed please don't take that advice it's a thing called inflation where things get more expensive by two to three percent a year over the next forty years your money will be worth almost three times less than today in fact 2.5 million will be worth 1 million in 40 years meaning if you leave any money in their checking accounts it just keeps going down by the year I want you to Google to SMP 500 right after this video you can invest in this fun with a symbol fee oh ho it has 500 the biggest American companies like Amazon and Google and return 10% a year over the past 100 years without 10% you will become rich much sooner than just saving your money it's not easy to change your mindset but I promise you this if you don't do this one day you'll regret it very much the second most important thing is to never borrow money you can't pay off recently I got a credit card and so far I've only used it for groceries maneuver rights for me and my girlfriend goobers pretty damn expensive my guess is cheaper than a car or taxis I know I can pay off every month so hasn't been a problem my credit has been slowly rising credit cards I'm not an evil tax you really need to get one right away a huge part of building credits it's time meaning the longer you have your card the higher your credits and you will need that credit to get a mortgage or pour money for a car or business one of the biggest problems in America has debts and credit card debt is the worst imagine paying 15% a year instead of earning 10% a year the money would never grow and you'll be broke in 40 years since a millionaire let me make this clear you won't get rich yep guess you can't pay off if you're in heavy debts right now make sure you're trying your hardest to pay it off this means not going out to eat now going shopping at all and spending the minimum every month this is living like a hermit it gets 15% a year will kill you I know it's hard to earn more money especially when you're in debts this is why your new job is to save money and hit start a side business even a YouTube channel might grow into another source of income for you my channel is almost two years old and make me at least $60,000 a year it is possible if you put in the time and efforts saving money it's actually much easier than a business so sacrifice fun for the next six months if you have your credit card debts once it's paid off don't ever borrow money you can't pay off by the end of the month have six months emergency money so you can always pay off anything you borrow and you should be fine the third thing to never do is racing that money on trivial things you don't need don't get me wrong you should definitely spend your money for great experiences that's not a bad thing no one's asking you to race your youth and never have fun I really hate videos that tells you to live like a hermit but some things are just not worth spending on let's forget a few things are not worth your money number one bottled water please don't go out and buy a new bottle of water every day or buy a 24-pack every week for your home this is the biggest waste of money ever in my eyes yeah filter if you don't love the taste of your tap water and get a cool water bottle for your bank I suggest a memo bottle it's flat and fits in any bank think about how much you waste on water pretty much a free substance if you buy five bottles a week at one dollar each twenty dollars a month down the drain looking at the price of a 24 pack of water on Walmart's we see that as ten dollars we need two litres a day and each bottle has found on your millilitres so we need four bottles a day this one pack lasts about a week that's 40,000 a month if you only drink bottled water you spent almost five dollars a year on just water to put things into perspective $40 a month at 10% a year we're going to $700,000 in 50 years it could be a millionaire by retirements just by not buying bottled water number two crazy expensive nights out at the club casino or a fancy restaurants again you shouldn't deprive yourself but some experiences are not worth the money you should really think about what you're getting and see if it's a good experience for you a casino will drain your account in one night for a terrible feeling of loss every time I go to one I tend to overstay after winning a bit and then lose it all after a few hours the only way to win is to not play or leave as soon as you win both are not a good experience the club will cost you hundreds of dollars maybe five tricks are marked up at five hundred percent or more so avoid places where drinks cost you more than rents if you can't find decent restaurants that won't break the bank which is fine every once in a while next time you're paying for a next experience think about what you're getting in return instead blowing $200 at a really fancy place you can't afford go to the family restaurants and spend 50 it's a nice atmosphere and you can go four times a month for the same price there are nice times to be had before a lot less money spent a night at home with some beer and some wine with your friends or loved ones might be a better experience a walk in the park movie dates or even video games with people you like can give you unforgettable memories at low cost number 3 monthly bills they don't have to be paid I'm talking about phone bills over $200 or gym membership you don't use for $50 a month if you remember my $40 a month investments turn into $700,000 think about what a gym membership is costing you in the long term if you don't go to the gym only go once a week think about getting a treadmill or running outside and think about what a foam bill of $200 is costing you everyone's difference so I can't tell you that you don't need that much data but you definitely only a new phone every year I stuck with my iPhone 4s for three years without hanging problems and now I upgraded to iPhone eights this thing will last at least four years and I can't replace the battery to last even longer what I'm saying this really evaluates where you're paying for every month if you really need that much data check for the best deal and step accepting what they offer you a simple way to save money is ISP asks for retention and say you're gonna cancel on us they offered something better I got 60% off my internet service this way it's not really immoral there's still profiting number for random stuff from Amazon I'm guilty of this one since I started using Amazon it's fun to buy new things I don't really need but realize how you could go too far and become an addiction especially the Bofors like Amazon Prime and free delivery next time we want to buy a new toy think about it and leaving in your cart for two days we use this thing at least once a month for next year if not don't buy it just leave it for a day before buying it will likely change your mind after that thing and the poor thing to never do if you want to be rich is to rent for the long term this one is a hard concept basically renting is not worth its if you can't afford a good mortgage with a mortgage and money you're paying for rents cashy buy the place instead this is because the interest rates on mortgage are usually pretty good especially compared to credit cards think of this example if you could borrow $400,000 right now at 4.5% interest rates isn't this an amazing deal if the stock market returns 10% a year in the next 30 years that's a five point five percent profit for free when you're buying a part of your money goes towards the house meaning you're not losing that money what other part goes towards the interest on the loan investing in real estate can be as good to stock markets this is because we will always need land and a place to stay while companies can go down within months once you're out deaths having good credit card for around a year and get afford to pay a bit more than your regular rents you should definitely consider owning instead of renting because in the long term they'll really help you become rich the last thing I want to share is student debts we've talked about credit cards earlier if they're crazy 15% interest student loans are not as bad this tip is not for everyone because college is technically a Safe Routes for some careers you definitely need higher education for example doctors but you've already an entrepreneur and work for yourself think about taking a break after high school it's really easy to start a business these days on Internet's look at my channel it's making me six figures a year right now I started this two years ago how long do you think it would take to get the six figures after college maybe sometime you thirties you guys start making $1000 a year this is very possible and I hope they inspire a few of you to give it a try with my story I'm not the most introverted person you ever know I'll lose energy with people so I tend to not talk to anyone I don't after this made me really quiet in general I decided to start a YouTube channel two years back I was inspired by a few investment channels like financial education they really taught me a lot and I thought maybe I could teach the same lessons but make it more simple I started with animation videos that I saw on a channel called give an investor my voice was extremely quiet first I put more effort into it and make sure every sentence that energy now two years later have 40,000 subscribers now making around 8,000 dollars a month on his channel at one point I started using Google's text-to-speech instead of my own voice meaning these videos could be made by anybody who knew about the subjects and these videos got the most views of all my videos I'm telling you guys this because it's a fact that anyone can start a channel and make six figures if you put in the hard work at a time this is actually 100% true because I didn't have to use my own voice and use the free editing software so if you have a business mindsets and you think you could do well on internets I want you to give YouTube a try instead of going to debts of over fifty thousand dollars start making two hundred thousand dollars a year doing something you have passion for I hope you guys got something out of this video how let me talk about real things I experienced in my life and I spent a lot of time on this one so please leave a like if you enjoyed it and share with one buddy my investing group is still 75 percent off for a limited time check it out below subscribe and leave a like for more of these videos I make them every day keep watching to save your money it's a mock way you