Kevin O’Leary is best known as one of the judges of Shark Tank. But he’s also a personal finance and investing guru with a lot of advice to share for the everyday investor.
In this article, we’ll take a look at 8 pieces of investment advice from Kevin O’Leary.
Kevin O’Leary’s Investment History
Kevin O’Leary’s career as an entrepreneur began in 1986 when he co-founded SoftKey, a computer software distribution company. His venture was well-timed for the proliferation of personal computing, and the company eventually sold to the toy company Mattel for $4.2 billion in 1999.
O’Leary invested in and played roles at several firms after the sale, including Mattel, StorageNow Holdings (a climate-controlled storage company), and Genstar Capital (a private equity firm). In 2008, he founded O’Leary Funds Inc., a mutual fund investment firm that grew to $1.2 billion in assets under management by 2012. Most recently, O’Leary has been involved in cryptocurrency investments, including taking an ownership stake in the now-bankrupt exchange FTX.
Starting in 2006, O’Leary appeared as a venture capitalist on the Canadian television show Dragon’s Den, which was a precursor to Shark Tank. He then joined Shark Tank from its launch in 2009 until 2014. Through the shows, O’Leary gained the nickname “Mr. Wonderful,” which was partly a joking reference to his often blunt assessments of business pitches.
Kevin O’Leary’s Investment Advice
Kevin O’Leary has been outspoken about his approach to investing and personal finance. His advice can be controversial at times, but his ultimate goal is to help more people reach financial security. Here are some of O’Leary’s best investment tips.
1. Investing is a Way to Reach Your Goals
O’Leary reminds investors that making money through investing is a means to an end, not an end in itself. Money is about what you do with it and how you choose to structure your life, he says. “When you have enough financial resources, you can spend your day doing things that you want to do.”
This outlook is apparent in O’Leary’s focus on making sure that you have enough savings to retire comfortably. The more financially stable you are, the more you can enjoy your golden years.
2. Pick a Few Goals and Focus on Them
O’Leary encourages investors to pick out a few tasks or goals that are most important and focus on achieving those. He’s described how he puts a sticky note with tasks on it on his bathroom mirror each morning: “Once I’ve stuck it on my mirror, I am myopically focused to get those three things done. Before I check my email, before I do anything else, I nail those three things. You cannot believe how productive you get when that happens.”
This is a simple piece of advice that anyone can copy. Whether it’s a reminder to put money into an investment account, research a company, or learn about a new investing topic, you can add it to your own sticky note and make it a priority.
3. Investing Early is Best, But You Can Start Anytime
Kevin O’Leary frequently bemoans the fact that financial literacy isn’t taught in schools. “I know many people who are in their sixties who have nothing set aside for their retirement. If we keep on doing this and not teaching our kids how to invest, then we are on our way to failing an entire generation.”
But he points out that just because you missed out on investing early doesn’t mean you can’t start now. “The truth is,” he says, “changing your spending behavior can happen at any age. You can be in your forties, which is difficult, but you can do it.”
If you’re late to investing, it’s important to put more money away each month to make sure you save enough for retirement. Start as soon as you can and focus on what you can control, not the time that you may have already lost.
4. Save Your Money for the Long Term
O’Leary doesn’t offer a prescription for how much individuals should save and invest – that depends on your personal financial situation, income, and financial goals. However, he does offer a strategy for how you can split up the money you save each month: “Put 5% into your savings account, put 10% into your project account and the rest goes toward the long term,” O’Leary says.
O’Leary also recommends that individuals take a hard look at their spending. Small expenditures like a daily coffee can add up over time. Any money that you save and invest can work for you by earning compound interest.
5. Know When to Cut Your Losses
It should come as little surprise that not every business O’Leary has invested in – either on his own or through Shark Tank – has worked out. However, he’s upbeat about the fact that losses are just part of investing. “It’s hard to know which ideas will thrive and which will fall short,” he says.
The important thing for investors to keep in mind is that “you have to know when to cut your losses.” It’s much better to admit an investment didn’t pan out the way you hoped and move on than it is to stick with a money-losing asset. As O’Leary puts it: “You just have to take it behind the barn and shoot it.”
6. Stick to Index Funds and High-quality Companies
O’Leary may be best known for his role as a venture capitalist on Shark Tank, but he’s quick to point out that most investors shouldn’t try to mimic the investments they see him make on television. “Those are high-risk investments,” he says.
Instead, investors should look to index funds and large-cap companies that have strong business models. “The majority of my wealth,” according to O’Leary, “is built on owning very high-quality companies that have profitable business plans and generate cash.” O’Leary especially recommends dividend stocks for the stable income they provide.
7. Be Honest with Yourself and Others
O’Leary earned the nickname “Mr. Wonderful” by being brutally honest, and he sees this as fundamental trait that investors should have. “Be honest when you think that an investment is not going to work out,” he says. “When people look back at you, they’ll only remember that you’re the guy who never lied to them.”
Investors not only need to be honest with themselves and others, but also surround themselves with people who will tell them the truth. If you have an investment theory, it’s extremely valuable to be able to get an honest critique of your idea from people you trust.
8. Be Persistent
Investing can be hard and many investors suffer strings of failures between successes. O’Leary himself points out that he “went through some very tough times, right from when my mother cut me off through several business ventures I failed in.”
The important thing is to not give up. “I just got to keep getting up every day and stay in the race,” says O’Leary. “It’s very hard. But I’m glad I did what I did. I wouldn’t change a thing.”
Even when times are tough, it’s important to stay focused on your long-term goals and to keep pushing forward.
Conclusion: Kevin O’Leary Investment Advice
Kevin O’Leary is a successful entrepreneur, venture capitalist, and investor. He offers a mix of personal finance and investing advice with a focus on helping investors reach their long-term financial goals. Above all else, O’Leary encourages investors to start saving and investing as soon as possible and to remember that investing is ultimately a way to reach your goals.