@Kevin O'Leary Reacts: Living On $50K A Year In Brooklyn | Millennial Money

kevin o'leary here i'm going to watch a video called 50k a year living on 50k year in brooklyn new york i personally think that's impossible unless you're living in the park turning over rocks eating grubs for protein that is not a number you can land on in brooklyn so i'm really interested to see what make it found out so let's roll this thing and see what the story is 50k a year come on it's not even possible new york city is pretty expensive but i think if you know where your money's going and you recognize what your priorities are it's totally doable that's before tax so she's not really making 50 000 a year she's probably making about 40 000 a year real cash dollars so she's she's living off a lot less than 50. i feel like i've had a lot of different influences about money negotiating 401k investments not bad she's got savings in here i'm looking at a pie chart the latest typical monthly spend 28.94 food 340 transportation 145 debt repayment 130 see how much that is that's a chunk and then miscellaneous 420 whoo okay all right but the savings 880 i like that i like that i want to see if she's investing it in the long term because that's what you're going to need to end up with over a million dollars by the time you're 65 because you've got to get market returns they're sort of like six to eight percent a year over a long period of time that's what they've done market goes up and down but if you can get those market returns it's good but you got to invest i like to divvy up things depending on percentage so immediately after my paycheck comes into my bank which i use ally it just goes into the savings depending on how much i want i tailor my lifestyle towards not having that money because i'm just used to it okay the kid's smart i'll tell you why if you actually have targets in other words you're putting percentage spans and you can watch it on a weekly basis or every two weeks because you're probably getting paid for two weeks that's real smart because the way you go offside and end up with massive credit card debt is that you don't stay within those guidelines so she's got a pie chart and she's saving you know for emergencies classes gift donations and travel that's very smart the one thing i don't see here which is incredibly important if you're 23 years old is you got to put a hundred bucks aside every week for the long term in other words you're investing in your retirement minimum 100 a week so we'll see if she's got anything like that in here i graduated from ithaca college ouch she starts with 16 000 in student loans which reminds me if you're going to burden yourself with a loan that you got to pay back at probably five or six percent interest because that's sort of the going rate on student loans which is a huge interest rate these days when the 30-year bond is yielding less than 2 percent that's very very expensive you want to make sure you're investing in a really in an education you can get paid back on like go to college for something you know you can get a job in i've said this countless times there are three good categories to focus on engineering engineering and engineering try one of those and for a fourth choice go with engineering i had a lot of part-time jobs throughout school i'm really fortunate that i didn't have a lot of student loans i had a lot of scholarships and my family helped a lot through college very smart to do part-time during school that reduces the debt very smart it lets you actually have some cash flow i did that too i actually was a weight waiter and i worked at night and i worked in the record store whatever i could do in college to keep my loan down or even pay off some of it while i was there i'm starting to think elena's got her pooped together so to speak i think it's really important to get a jump on it if you can i still want to budget for it and get them paid off in the next five years okay paying it off and having a plan is very smart because they'll tell you while you have that loan you're paying interest that's an expense that's brutal so she's got a plan to pay it off in five years very good i like that i feel like dating as a young person is pricey i mean as much as i hate to say it it's a little helpful that i am a lady so usually if i go on like some first dates i don't usually have to pay i'm happy to i honestly am like sometimes i pay tip [Laughter] smart first date you don't have to pay yeah okay but eventually you don't want to become in debt to that guy unless you think there's something there so i've got the three date rule on that thing you go you can go up to three dates and let them pay every time or let the other significant pay but once you're past three i mean you know the only reason you go out a fourth time is is you know you're trying to light the flame and then you've got to become a participant in the cost you're going to kind of go 50 50. i don't think it's cool that no matter who you're dating that you let them pay for everything on the three date rule so you can let them invest in you for three days but fourth you gotta pony up just saying i also am on a bunch of email lists and newsletters that give you free events how long have you lived here almost five years oh okay nice like i'm actually friends with my neighbors like i'll tell my friends like oh yeah like i baked a cake with my neighbor or you know i went over to their house and they're like you know who your neighbors are i'm starting to like this gal i'll tell you why she's thinking about all the things she can do that she doesn't have to spend money on she's staying hip to what's happening in her local neighborhood she's talking to neighbors she's on social she's seeing what events that are around her are free very smart in new york you have to do that new york is so friggin expensive of course the city wants to suck every dime they can get out of you but at the same time people are hip too and they're doing their own things so like with my hair i honestly cut it myself or like my mom does it like and that's just because i i have pretty simple hair like i don't need anything super wacky she cuts your own hair so do i you got to save you got to save you know i have a little less to cut so it takes me less time that is really smart beauty you know is everybody wants to look as good as they can in some ways it's important that you do that but if you can minimize the cost that's really smart and hair is really expensive she's young she's 23 so she doesn't have to dye her hair that's coming later very expensive okay this is the part i'm really interested in what is the retirement plan she has one so let's hear what she's doing so i have the five percent and then my company matches it okay she has an ira the company matches it you must take advantage of that if you have a company that's giving you a dollar for dollar you have to do that that is like free money coming out of a helicopter to you and you have to do it that's one of the benefits of being employed particularly if the employer wants to help you build your nest egg that's really smart and very very important if i get a pancreas i definitely want to up that for the company to put in money like that's free money like i don't know why you wouldn't max that out if you have the financial means to so that's really important to me [Music] she's got two thousand dollars in robin hood that's great i prefer bean stocks that's the financial literacy platform that mr wonderful's investing in i'm really big on this whole thing we teach everybody everything in high school but we don't teach them about investing and of course they end up in debt when they get out of college not elena she has been way ahead of this game and now has two thousand dollars put away i like that a lot [Music] i do freelance photography on the side mostly headshots and portraits whoa i like that i'm a photographer too i think that's really great and also one thing i was going to say about your life is if you're really interested in pursuing your career whatever it is that you found that you're passionate about that's good but business is binary you either make money you lose it in a career you're always trying to help the company you're working with move forward but it's great to have a passion in the arts which is chaotic but it really helps to be a balanced person she's into photography i'm looking at some of her shots pretty good i think it'd be nice to make over a hundred thousand and i definitely want to hit that by 30. i know it sounds kind of ambitious very very good to have a goal in terms of what you want to have as an income a hundred thousand dollars a year in brooklyn is a good number it means basically you're keeping about 75 000 or significantly more than she's got now let's say after tax she's only got 40 000 free cash flow if she got to a hundred thousand she'd have 75 000 she could maybe even buy a condo at that point and put it towards something where she's building equity having that goal means you know on a regular interval you're asking your boss for a raise you don't get one unless you ask by the way you never get one unless you ask i've been doing this a long time people ask me for a raise it's because they feel they deserve it she feels she deserves it very smart i think if i make the right career jumps and i stick with my side hustles it's definitely doable i would want to donate some of it i'd want to use some of it like to travel or to buy more camera equipment and then a lot of it i just want to put to the side all the small things that it's easy to be frugal with it would be nice to have that little perk later but i think in general my budget will still be pretty similar even if i get a pay raise okay here's what i think she's still got a bunch of money on that student loan she's got to get rid of that should be the primary focus it's better to pay off the debt before you put a significant amount of money into investment because investments can go up and down in value as we all know the stock market has volatility but if you still have debt that's forever and that debt is for certain going to charge you interest so in a way when you pay down your student loan you are investing in yourself you're getting rid of it you get that burden that shackle off your back what i see here is she could probably get rid of that debt in about 36 months if she just focused all of the energy she's got into little things towards that debt and she'd save a fortune long term because six or seven percent interest that's nasty now it's not as bad as credit card debt at 21 but it's still a lot you know what i'm gonna give elena on a one to ten i was impressed i was very skeptical at the beginning but i'm going to give her an 8.2 and for me that's a huge score i'm not kidding she's doing a lot right the only reason she's not getting a 10 out of 10 is she's not paying off her student loan fast enough thanks for watching and don't forget to subscribe to cnbc make it and while you're at it download bean stocks check it out that's how you save for your retirement bea and stox

Channel: CNBC Make It

Views: 857,137

Rating: 4.8902988 out of 5

Keywords: CNBC Make It, Make It, CNBC, How To Make It, Entrepreneurs, Starting A Small Business, Business Success, Small Businesses, Finance Tips, Career Tips, Work Hacks, Lifehacks, Money Management, Career Management, Managing Business, Kevin O’Leary, Kevin O’Leary advice, Kevin O’Leary net worth, Kevin O’Leary cnbc, Kevin O’Leary investing, living on 50k a year, living on 100k a year, living on 200k a year, money diaries, r29 money diaries, millennial money, millennial money cnbc

Id: I31gTK5tYOY

Length: 10min 58sec (658 seconds)

Published: Thu Sep 03 2020