Kevin O'Leary says nothing 'tastes as good' as compound interest in rant against $28 lunches

It’s rhetoric he repeated in July on the Money Rehab podcast. No matter how good that sandwich might be, he argued, there’s a better use for that money.

“You don’t need to spend $28 to get 60 grams of protein for lunch,” he said. “You can cook a chicken at home and you can bring it with you and eat it in a sandwich.”

The compounding diet

Bypassing that chi-chi frou-frou lunch, he argued, and saving that money will affect you down the road. The secret sauce, he told podcast host Nicole Lapin, was compound interest.

“Okay, honey bunny, let me answer the question,” he said. “Is there anything you can buy for $28 that tastes as good as 28 years of compounding at 10%?”

For the record, compounding $28 at a 10% rate for 28 years would yield just under $404. If you skip just one $28 meal a week for a year, that would result in a $21,000 nest egg at the end of those 28 years. That said, finding a sustained 10% return for that period of time is unlikely.

Short-term satisfaction vs. long-term goals

O’Leary’s argument wasn’t that people shouldn’t treat themselves from time to time. It was that regular spending can prevent you from saving money that is better suited for later in life, and that money can be put to work for you.

“I don’t want to call people stupid,” O’Leary said. “I want to point something out. Why do that when you can invest it in yourself?”

That hasn’t stopped critics from disagreeing with O’Leary, who first made the point a year ago on the Diary of a CEO podcast. Last month, Sen. Bernie Sanders said O’Leary was “completely separated from the reality that ordinary Americans are experiencing.”