Moneywise

Tue, Jun 3, 2025, 2:03 PM6 min read

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Rampant inflation has cooled off significantly in America. While it remains slightly elevated, the Federal Reserve continues to hold its target interest rate. But if you think now is the time to upgrade your lifestyle, “Shark Tank” star and investor Kevin O’Leary has a wake-up call.

“We're looking at a downsized America,” he said in a November interview with Fox Business. “Three years ago, even 24 months ago, you'd get a mortgage at 4.5%. You're lucky to get one at 8% today.”

But the impact of high rates extends beyond the housing market. Edmunds reports that borrowing rates for new vehicles in the third quarter of 2023 hit an average of 7.4%, a figure not seen since 2007. In Q3 2024, it sat at 6.11%.

O’Leary summed it up by saying that if you are in your early 20s, your lifestyle will be “about 20% less.”

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The blunt reality is that while the headline inflation figure is no longer at 40-year highs, price levels remain elevated. In April, the U.S. consumer price index jumped 2.3% from the previous year.

Since the U.S. central bank is committed to using monetary policy to bring inflation down to 2% over time, O’Leary believes more rate hikes could be on the way.

Despite this intimidating financial climate, you’re not totally in the dog house so long as you adjust your finances accordingly. Here is how you can do just that:

If the prospect of a “downsized America” has you wanting to readjust your financial plan, consider hiring an advisor to help get you on the right track. Finding a financial advisor that suits your specific needs and financial goals is simple with Vanguard.

Vanguard — an investment management company — offers hybrid advisory services that combine advice from professional advisers and automated portfolio management to make sure your investments are working to achieve your financial goals.

With a minimum portfolio size of $50,000, this service is best for clients who already have a nest egg built up but are ready to grow their wealth with a variety of different investments.