Key to financial success is paying off debt ditching fancy coffees: Kevin O'Leary

The "key" to financial success is paying off debt, said self-made multimillionaire Irish-Canadian businessman and television personality Kevin O'Leary. 

"If you have debt, forget spending on things like fancy coffee drinks," the "Shark Tank" star and self-made multimillionaire said on an episode of CNBC's Make It.

Paying off debt is "key" to financial success, he stressed.

"If you have student loans, if you have debt, if you have things that you are paying interest on, you have to pay those off first," O'Leary said.

Kevin O'Leary said that the luxury of spending money only comes after paying off a debt.

"You have to pay debt off first before you spend $4 on a cup of coffee. Why would you ever do that?"

O'Leary delineates it is important to pay off debt, because the interests being paid on borrowed money can be expensive. Citing credit cards as an example, he said the average credit card annual percentage rate in Canada is 15.78%, and rates can go even higher depending on the borrower's credit.

Debt can also be a major obstacle in reaching other financial goals, like saving for retirement or making important financial decisions, including buying a home, O'Leary remarked.

"You have got to get rid of those expenses first, then you have the luxury of spending money on whatever you want. But not until you are out of debt!" O'Leary said.

O'Leary often says spending on coffee, in particular, is "such a waste of money," saying:"Coffee can cost you 18 cents to make at home if you want to. That's where you should make it, and put it in some kind of a thermos and take it to work."

For Kevin O'Leary, spending or indulgence should only come after all debts are paid

"Sure, you can buy coffee when you can afford it. Sure you can buy that extra thing you want or a new stereo or new jeans or new sneakers or whatever it is – all of that after you pay off your debt," he said.

O'Leary has said that personally, instead of spending his money on things like coffee, he prefers to invest extra cash.

"What I have learned to do, and what has really helped me in maintaining growth in my own personal investing is, anytime I pick up something I am going to buy, I say to myself, 'Do I really need this?' Because if I don't buy it, the money is going to be invested and make money every year for me while I am sleeping," O'Leary said during a past interview.