'I Don't Have Any Debt' — Kevin O'Leary Pays For Everything In Cash But A Finance YouTuber Points Out It's Easy To Avoid Debt When You're Rich

Kevin O'Leary, the investor and Shark Tank star, doesn't do debt. In a September 2020 appearance on Graham Stephan's YouTube channel, O'Leary made it clear: "I don't have any debt. I've got to a point in my life where I just don't like debt. So I buy things for cash." But Stephan, a finance YouTuber known for his real estate investing strategies, wasn't about to let that slide.

"But don't you think that's because you already have so much money now?" Stephan asked. "For you, going and trying to borrow at 3% to make 5% might not be worth your time versus just the hassle-free option of paying cash."

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O'Leary didn't disagree. Instead, he pointed to experience: "Well, except because I'm older than you, I've seen a lot of things, and I've been through a lot of down cycles." He warned that many of his friends who took on too much debt ended up bankrupt. "Imagine being in your 40s and being wiped out. Having to go bankrupt changes your life forever. The only reason it happened to them is they didn't respect debt."

But there's no denying that having millions—or billions—makes it a lot easier to avoid debt. For the average person, a lower income means less disposable cash to cover major expenses or build savings, making borrowing a necessity rather than a choice.

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The Reality of Avoiding Debt

It's one thing to say never take on debt, but for most people, that's not realistic. Housing prices are skyrocketing, student loans are unavoidable for many, and even just building credit requires some level of borrowing. O'Leary acknowledges this, saying: "I tell every millennial, even though I don't endorse credit cards, it's very hard to advance your credit rating without having one."

But here's the reality: most Americans do have debt. Unlike O'Leary, who has the financial freedom to pay cash for everything, millions of people rely on credit just to get by.

• Homeownership isn't cheap. Business Insider reports the average mortgage balance in 2024 was $244,498, making it the largest source of debt for most households.
• Student loans are practically a requirement for higher education. The average borrower carried $37,853 in federal student loan debt, according to Education Data Initiative. 
• Everyday expenses add up. Credit card debt is a constant struggle, with the average balance for those carrying debt hitting $7,236, according to LendingTree.

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The Bigger Lesson: Debt Isn't the Problem—Reckless Debt Is

O'Leary isn't against leveraging money to build wealth. He just hates bad debt. He told Stephan: "You're being disciplined. You're buying assets that have income. They were buying boats, cars, and watches—and getting divorced. They loved their lifestyle. They went to zero."

Many people get into financial trouble because they borrow money for things that don't generate income. That's why O'Leary swears by his pasta vs. protein investment strategy, a lesson he learned from a billionaire real estate mogul. "He'd start by eating pasta, putting every dollar toward paying off debt. Once the building was paid off, he could afford to eat protein."

Debt: Necessary or Dangerous?

For most people, completely avoiding debt isn't realistic. Some financial gurus, like Robert Kiyosaki, take the opposite stance—he proudly claims to be $1.2 billion in debt, arguing that being a debtor allows him to pay little to no taxes. His philosophy? Use debt as leverage to build wealth.

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But O'Leary's approach is different: Only take on debt if it makes you money. He's not against borrowing entirely—he just believes it should be strategic.

• Real estate? It can be a smart investment if it generates rental income and appreciates over time.
• Business investments? Leveraging capital can help scale a company and create more wealth.
• Education? When managed wisely, it can lead to higher earnings.

And if you ever think about using margin to trade stocks? O'Leary doesn't hold back: "Never use margin in stocks. Never do that. Never, never, never, never. People think margin is free. When there's a correction, you get slaughtered. They'll sell you out in two seconds."

Debt isn't necessarily always the enemy—it's how you use it that matters. Before making big financial decisions, especially when it comes to investing or taking on leverage, consulting a financial advisor can help ensure that debt works for you, not against you. 

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