In a recent interview on The Diary of a CEO, O’Leary sets his sights on a spending habit he says is rampant among Gen Z and could be costing them a fortune over their lifetimes: splurging on expensive lunches and daily luxuries instead of investing for retirement.

“I can’t stand when I see kids making $70,000 a year spending $28 for lunch. I mean, that’s just stupid. Think about that in the context of that being put into an index fund and making 8% to 10% a year for the next 50 years,” O’Leary tells host Steven Bartlett.

O’Leary breaks down the math to drive his point home. If a young person invested just $28 a week—the cost of a single pricey lunch—into a low-cost index fund earning an average annual return of 8%, they would have nearly $800,000 after 50 years. The implication is clear: Small, habitual expenses add up to massive missed opportunities for wealth accumulation.

The cost of small indulgences

O’Leary’s warning isn’t new, but it’s particularly relevant as inflation and the high cost of living squeeze younger generations. 

Millennials and Gen Zers, often living in cities with easy access to expensive coffee shops and delivery services, are especially prone to these “death by a thousand cuts” spending patterns. Surveys show millennials alone spend up to $1,000 a year on coffee—a habit O’Leary calls “financially dangerous.”

His advice is simple: Brew coffee at home, bring lunch to work, and redirect those savings into investments. O’Leary argues that these choices aren’t just about frugality, they’re about prioritizing long-term financial security over fleeting indulgences.

The rules of wealth building

O’Leary’s personal approach to money is rooted in discipline. “One of my rules is never outspend yourself in a 30- or 60-day cycle, ever. I don’t have any debt,” he tells the podcast host. He urges young people to track their income and expenses over a three-month period—a “90-Day Number”—to get a clear picture of their financial health.

He’s also adamant about the dangers of emotional spending. “We buy stuff with money, and, more often than not, this stuff becomes a vessel for more spending,” O’Leary writes in his book Cold Hard Truth on Men, Women, and Money. He warns that mixing money with emotions leads to poor decisions and recommends tricks like literally freezing credit cards in a block of ice to curb impulse buys.

Succeeding in business 

O’Leary’s financial advice extends beyond personal spending. For aspiring entrepreneurs, he says, projecting confidence is essential. 

“Can you project who you are with your eyes and the way you’re standing, can you project your confidence?” he asks. “You have to learn how to project yourself in front of your peers…If you don’t have it, you’re going to fail…it’s before a word is spoken.”

He also stresses the importance of clear communication and financial literacy: “You need to articulate your idea in 90 seconds or less; the ones that had that aura get there in 30 seconds or less. This is the killer—you got to know your numbers. You don’t know your numbers, you deserve to burn in hell.”

Is O’Leary’s advice realistic?

While O’Leary’s message is clear—ditch unnecessary expenses and invest early—critics point out that saving at the rate he recommends is a tall order for many young Americans facing high rents, student debt, and stagnant wages. 

Still, O’Leary insists that building wealth is less about income and more about habits. “Getting into the habit of saving from an early age is essential given that younger Americans can’t rely too heavily on Social Security for retirement,” he says.

His bottom line: “Be smart with spending. A person should not let emotional impulse lock them into long-term financial baggage.” For Gen Z, that might mean skipping the $28 lunch today—and retiring with $800,000 tomorrow.

For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing. Given the nature of AI tools, mistakes may occur.