"Get myopically focused on it" — When Shark Tank's Kevin O'Leary shared an honest strategy for paying off student loans

Shark Tank investor and businessman Kevin O'Leary outlined his plan to pay off student loans in a segment of Ask Mr. Wonderful on YouTube on October 28, 2019. The question came from a viewer named John, who wanted to know the best strategy for Millennials to pay off their student debt. In response, O'Leary made clear the need to prioritize loan repayment and said,

"John, the best way for Millennials to pay off their student loans is get myopically focused on it."

The Shark Tank investor pointed out that paying off debt should be the priority over all other financial choices since building up interest can undermine long-term financial wellness.

O'Leary based his argument on his own experience, stating that he took part-time jobs while attending school to pay his debts. He emphasized that financial independence is impossible when one has student loans, as interest payments eat up savings and investment possibilities.

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Shark Tank Kevin O’Leary’s strategy for paying off student loans efficiently

Start paying while in school

O’Leary highlighted that students should begin working while still in school to reduce their loan balance early. He pointed out that having a part-time job can significantly contribute to debt repayment, explaining,

"Even while you're in school, get a job slinging beer or waiting tables. That’s what I did."

He suggested that working during school years can help cover expenses and lower the need to borrow additional funds. The Shark Tank investor also cautioned against delaying loan payments until after graduation.

According to O’Leary, postponing repayment leads to increased interest accumulation, making it more difficult to clear the debt quickly. He advised that any income earned from part-time jobs should be directed toward student loans whenever possible.

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Minimize unnecessary spending

Kevin O’Leary also stressed the importance of reducing discretionary spending to allocate more funds toward debt repayment. He explained that many borrowers make unnecessary purchases, which could instead be used to lower their loan balance. He stated,

"Often people buy a lot of crap they don’t need—15 pairs of jeans, you need two. You don’t need 20 pairs of shoes, you need two."

His recommendation was to maintain a disciplined budget, prioritizing only essential purchases. O’Leary noted that cutting down on unnecessary spending would allow borrowers to direct every available dollar toward their student loans. He added,

"Take it and put every dime you can towards that student loan."

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Aim to pay off loans within 36 months

O'Leary provided a definite timeline for repaying student loans, proposing that with discipline, borrowers could pay off their loans in three years. He recommended putting a large percentage of income toward loan repayment, suggesting that people put 20% of their income toward paying down their loan balance.

The Shark Tank investor also pointed to the long-term cost of not paying back now, indicating that interest rates escalate over time and result in further expenses. O'Leary noted,

"Those loans are nasty. Interest rates go up over time, and you eat up so much of your potential by paying interest to somebody else."

His approach was to wipe out debt as soon as he could to have financial freedom and enable savings accumulation.

By following O'Leary's strategy—paying off debt early, cutting back on unnecessary spending, and dedicating a major portion of earnings to debt repayment—borrowers can speed up their journey to becoming debt-free.

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