Kevin O'Leary: Why Early Retirement Doesn't Work

"Shark Tank" star Kevin O'Leary says the FIRE movement — financial independence, retire early — isn't all it's cracked up to be. He knows from experience, so here's what he does instead.

The concept of FIRE — financial independence, retire early — is a growing movement that has ignited among young people. There is a litany of blogs, podcasts and Facebook groups dedicated to helping people retire early, sometimes even in their 30s or 40s, by practicing habits like extreme frugality, saving or investment.

But star of ABC's "Shark Tank" and self-made business mogul Kevin O'Leary isn't sold.

"This whole idea of financial independence, retire early doesn't work. Let me tell you why," O'Leary tells CNBC Make It. "It happened to me."

O'Leary sold his first company, Softkey Software Products (which was later re-named The Learning Company), to the Mattel Toy Company with nine other co-founders for $4.2 billion in 1999.

"I achieved great liquidity and I thought to myself, 'hey I'm 36, I can retire now,'" O'Leary recalls. "I retired for three years. I was bored out of my mind."

"Working is not just about money. People don't understand this very often, until they stop working," O'Leary says. "Work defines who you are. It provides a place where you're social with people, it gives you interaction with people all day long in an interesting way. It even helps you live longer and is very, very good for brain health."

Indeed, research has found that there are a number of health benefits linked to older-age retirement, including a decreased risk of dementia. And a paper published by the National Bureau of Economic Research found that social contacts are a side effect of employment that keeps workers mentally agile, and that even disliked colleagues and bad bosses are better than social isolation because they help keep the mind healthy and active.

It is worth noting, though, that not all FIRE participants necessarily strive for traditional retirement.

A previous CNBC report, for example, featured Tanja Hester and her husband. Though they quit their 9-to-5 jobs, for them FIRE was more about "[defining] for ourselves how much of a role we want work to play in our lives. ...I do a lot of stuff that looks like work but it's all projects that I feel passionate about," Hester said.

The financial freedom part of the equation is something that O'Leary has talked about in the past.

"I don't need more money," he adds. "I just want to do the things in my life that I want to do, and money allows me to do that," O'Leary previously told CNBC Make It. "I tell every entrepreneur, 'Don't focus on the cash. It's nothing about greed. It's all about personal freedom.'"

O'Leary has achieved financial success, but he still works hard, spearheading the O'Leary Financial Group, O'Leary Fine Wines and starring on "Shark Tank."

"I don't know where I'm going after I'm dead," O'Leary says. "But I'll be working when I get there too."

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‘Shark Tank’ star Kevin O’Leary: Retiring early ‘doesn’t work’ — here’s why | CNBC Make It.

[braidenchesnutt]

I believe the retirement crisis will get even worse. Many struggle to save due to low wages, rising prices, and exorbitant rents. With homeownership becoming unattainable for middle-class Americans, they may not have a home to rely on for retirement.

[devchatterjee]

Misses the point (as many financial experts do) yet again. FIRE does not mean ending work, it means ending required work.

[DonteeWeaver]

Having to option to retire early is the goal even if you decide to work forever

[lvega]

This is a guy who's obviously never had to work retail or fast food. Or even my own job, which although a 6-figure office job, has me in tears almost every day.

[jorgerascon]

He clearly doesn't understand the whole point of the program fire.

[benher]

Fire is about having the freedom to pursue your interests. If that's working till you're dead, you have that freedom but it's not a requirement. FIRE went completely over his head.

[cero]

It sounds to me like Kevin needs more hobbies

[JimmyHFinancial]

Fire means Retirement from working out of necessity.. work only for passion

[CheeseSlicess]

I took a year off work, and did not ever get bored. Not one second. I loved it.
I read a lot of books and did DIY. He’s only got his own perspective and that’s the only truth he accepts?

Just because he needs work to stay busy does not mean everybody does.

[Whooshta]

The Goal of FIRE is not to stop working and laying around all day watching TV. The goal is the flexibility to work on what you want, when you want, with whom you want. I strive for it, because I'd like to have my necessities covered so I can take time off 1-2 months out of the year, and enjoy the holidays with my family. There is no way I will stop working, I love to work, but I don't want to feel panicked if I take more vacation than my paid vacation days.

Of course FIRE means different things for everyone, but Mr. Wonderful totally missed the point.

[angelikalaser]

'Work definies who you are'
Interesting that the fillowing Images weren't of people picking up garbage or scrubbing toilettes.. 😉

[zoemayne]

This guy is tricking you guys into being slave. Don't stay in the middle class!

[richardortwein]

I’ll just say this
People should strive to retire from the rat race early, not the workforce
You should still work to keep adding value to society and to yourself as well
Work part time for a year, go on a month vacation and repeat.
You’ll enjoy your free time more this way. START A BUSINESS!!!

[PRTukaTuka]

This coming from a businessman... don’t quit your job folks!

Not everyone gets bored so easily, maybe you are just a boring person then.

[desco]

This video actually proves the point of FIRE. Mr. O'Leary proved it himself on a much larger (unicorn) type of scale, lol. Save and invest (he invested in his own business), build equity, stay focused so when you want to move on to something else you are covered.

I would say $3.7 billion from Hasbro was a nice buffer for him (much respect), to do what ever he wants, when he wants, with who he wants too...lol. Love Shark Tank!

Also, working until you die is super awesome, if that is what you see making you happy. How nice is it to have that option though :), what if you change your mind later? O'Leary is good. If he decides he doesn't want to do Shark Tank anymore tomorrow, he doesn't have to. That's the point.

Thanks for proving FIRE!

[mike]

The funny thing is motivated driven people who usually have the ability to retire early don’t want to While lazy bums Who would love to retire early and do nothing don’t have that option it’s a catch 22 lol

[gmlbs]

This title is misleading...I came to learn why early retirement doesn't work...😒 just because he was board out of his mind doesn't mean other will be too...

[RonyPlayer]

Thing is: he is talking about a nice job. Yeah, sure a job where you interact with cool people, build nice things and don't over-stress yourself is nice... Not all jobs are like this!

[lifeforgod]

FIRE just allows you to do exactly what you want to do. If Kevin wants to work for his life, its his prerogative. Not everyone wants what he does.

[COMMANDRofAWESUM]

I’d really like to play golf every day ... and for that reason, I’m out.