Kevin O'Leary (Shark Tank) on Tips For Growing Wealth, Labubu and FTX

27:06I've said this countless times. I have a company I invested in called Hello Prenup to help women get prenups, even while you're in love getting married. Screw that. Get a prenup because once real life hits, stuff happens. And so you've got to start thinking about when you're starting out and you're getting married, you're building a business together. I know it sounds callous, but it's not. You have to get money in that relationship to survive. And so that really matters. Women do something very bad. They give up their financial identity when they marry a guy. Why would you do that? You have to get your credit score back later after you're divorced 10 years later.

27:42That's insane. It's very hard to do. You keep your own accounts. You keep your own credit card. And he does the same. And you have a joint credit card that you contribute to each month together and you decide which things you spend on together and which do you own yourself you have your own investments and all that stuff marriage is a wonderful thing and you can build a family but you never give up your identity your financial identity or bad things will happen to you you've said to your kids that you want them to have prenups and not blend their finances with their partners oh they know they They know that already.

28:18Mine and ours. I don't even give them money. I mean, you know, I have a different philosophy. My mother taught me that entitlement is a curse. It is a curse, an absolute curse. You may not agree with me on this topic, but when I graduated, my mother came to my graduation and said, I have good news and bad news. I'm here to celebrate your graduation, but there's no more checks. And she said, the dead bird under the nest never learns how to fly. And I said, Mom, what the hell does that mean? She said, I'm done. I'm not paying you anymore. Because she was helping me right through college and everything.

28:57And that's because she had that portfolio we talked about earlier. I mean, she put my brother and I right through college. Who knew? I mean, that was, you know, but then she said, I'm done. You have to go figure it out on your own. She felt that if you de-risk somebody financially at a time in their life where they're making hard decisions about what they're going to do with their life, you curse them. And you must know at least a few screwed up rich kids. I do. And I know exactly what happened to them. They are totally screwed up. They've been de-risked. Their parents give them money every month.

29:33Like they're 40 years old. They haven't done anything because they didn't have to. That's a curse. What a miserable waste of a life. And so after my big, you know, my first liquidity event, I went across the river in Boston and I set up a generational skipping trust. It's a very simple metric. It does not provide to anybody anything after they finish education. But from birth to last day of education, full free ride. Full free ride. Everything paid for. Even out of wedlock after I'm gone. but if you drop out of school or you don't make it to college, you're cut off. I remember my son was doing really poorly in high school.

30:16Came home one day in Boston. We were living in Chestnut Hill and he said, look, my friend has a trust. Tell me how mine works. I said, mom and I are going out for a movie. If we get run over by a bus, you don't have to worry. This trust is going to pay until you finish high school but it doesn't look like with your marks you're going to ever make it to college. He said, yeah, but I don't have to worry about it. I got a trust. I said, no, this trust stops paying after you finish your education. If you only make it through high school, I'm dead and you're broke. The horror in his eyes when he figured that out.

30:54However, it motivated him to get off his ass and use the next three years to milk that trust to get into college. Get his marks up and he did it, became an engineer, worked for Tesla, got one of the Tesla directors to write him a letter when he applied to Harvard, got in, MIT too. That's where he is right now.

31:16Hold on to your wallets. Money Rehab will be right back. And now for some more Money Rehab.

31:29I just got married last year. Congrats. I hope you've kept your financial identity. For sure. Do you have a prenup? Yes, of course. And think about all of our listeners who do not fall in the same trap that you mentioned, that women lose their financial identity. Not our ladies, but you and your wife have been married since 1990, right? So you have some years on me. No, no, definitely. You have 34 years on me. You guys separated, though, for two years. I let celebrity get in the way of my family, which, you know, that's one of the downsides of this. but I my daughter son you know said this is ridiculous you got to come back and I'm so glad they did and we worked it out and it's it's changed our you know I look at it I would say something for men who are thinking of doing this you will never have the same relationship with your kids if you separate from your family for a period of time you can repair it but it'll never be the same most you know because that's just the way it is and I've come to realize that but I'm proud to be back in the family unit.

32:30I'm very focused on making it work, and I do, and I've been that way for many, many years. The grass always looks greener on the other side. It always does. And I know that with certainty because so many of my friends are now going into their third and fourth marriages to women that are as much as 35 years younger than them. It's stupid. But it's not me. It's them. I say to them, you know, when I'm going to their fifth wedding or whatever it is, maybe it's you. It's not them. Maybe it's you. You're the reason that you're getting married for the fourth or fifth time. It's on you. And why don't you ask yourself, why do I need to marry?

33:10Like at this point, if you're in your 50s, 60s, 70s, and you've got kids, why don't you just date? Because you're really bad at marriage. and you're just geometrically decreasing your wealth every turn, even if you have a prenup, it's going to cost you a fortune to get married. Well, you have a prenup. It doesn't matter anymore. It's still expensive. The prenup for my wife and I, once you have children, prenups are pretty weak. Once you have a family, it's great to have them. The period you want a prenup for is that first three to five years because that's when the majority of partnerships break up.

33:49And often there's no child. The minute there's a child, it gets messy. So getting back together with your wife, was money a factor because divorce is expensive? No, the amazing thing was money has never mattered to my wife because we couldn't even afford pizza at our wedding. We actually served pizza at our wedding. We had no money, zero. I was in the middle of my first startup. We had a party at our house. It was fun, but we had no dough, zero. And so she was with me, and she was a fantastic mother because I could have never done what I did. I worked so hard the first 10 years. And as the learning company grew, it was in 52 countries.

34:34I was on the road all the time. I barely made it back for weekends, so she raised the kids. and slowly but surely things started to move and you know we started to make money and it was great but she still doesn't give a shit about it you know it's we don't need for anything and she certainly doesn't think about it's quite remarkable to you're very lucky to have a wife like that actually she doesn't outspend me i have to go buy her stuff you know like lately she's been stealing my watches. So I decided to buy her her own watches, which has been very good for me because she's not stealing mine anymore.

35:11But it's sort of, that's great. That's not what drives her. What drives her is family, family values. She's so proud of our kids and Trevor and the whole college thing. That's a good place to be in. That's the way I look at it. What would you tell Taylor and Travis to put in their prenup? Well, they're under such pressure as celebrities. She's so much wealthier than he is. celebrity as it did to me causes tremendous stress in in relationships and particularly to celebrities i mean he's a celebrity on his own but musicians tend to have a longer career than football players so he's got to figure out his transition she'll always be a bigger star than him and that's you know something you're going into the deal knowing but i think if they are successful, you know, getting a family going and they have a reason to support each other that way.

36:05I mean, everybody's second guessing what these two are going to do. Look, she's going to need more than a prenup. I mean, she's going to have to set up structural trusts that he'll never get access to. So, you know, that's just the way it's going to be. I think she's well over a billion liquid. So he's just going to have to deal with that. Well, she said no to FTX. Right, so she's got some smart people around her. That, unfortunately, is not true. Oh, tell me more. She did sign the contract. Sorry to tell you that. It went bankrupt before she executed on it. You know, there's not a lot about FTX I don't know.

36:45But her people spun a hell of a story. I don't blame them for doing it. But sorry, she signed it. So she signed the deal. Then they went bankrupt. So she didn't actually appear. Listen, I'm pre-programmed to tell the truth. I'm telling you the truth. That's what happened. So, yep, that's what happened. But no, she's not perfect. I'm not sure she read it. Her people probably did. But she was going to be a paid spokesperson for FTX. And she signed the contract. And they never concluded it because they had no cash. They went bankrupt. Okay, let's go back to an allocation. So we talked about your allocation, 20 % crypto.

37:21So far, I'm trying to keep tabs, 31 % real estate. Yes. What is your net worth? I'll do the math. I never disclose my net worth. You know why? And this is again from my mother and it's great advice. She's a big believer in karma. If you brag about money, one day you won't have any. That scares the shit out of me. You can go online and see all the speculation and all that stuff, but I've never disclosed my net worth and very few people actually get access to that information. I don't find it useful to stick that out there. And I think bad karma too. I'm not boasting about money, but I'm happy to talk about individual assets.

38:00The cards are now at just over 20 million in a holdco with three partners. So I'm a third of 20, including that card we just bought. And as we speak, I'm acquiring, or we are acquiring, two really remarkable pieces in Osaka, Japan. one of my partners is legendary in the hobby as it's called his name is shine matt allen is his birth name he is the number one collector on earth he is the number one guy that understands every card out there of value and the reason i did this is two reasons i didn't want to compete with him in buying that dual logo you know the kobe and jordan because shine thought it would go between$5 and$15 million, and he was right, almost to the penny.

38:53He was right in the middle, $12.9 million. By having him, when working together, we're not competing against each other, and we're now partners in this. But I've realized if someone said to me, go build an index of watches. I want to invest$5 million in watches. I know how to do that because I've been collecting watches for 40 years. I know every watchmaker. I know every watch brand. I know every piece. I I know every model. I know every caliber. I know every crystal. I know it all. I don't know that about collecting sports cards. He does. So I needed to find that guy, just like someone would have to find me in watches.

39:33And I have that guy. And now he's the guy in Osaka. And so, you know, every day we're strategizing on what's the next card, et cetera. and I think one day we will because you know I never saw anything happen like this with when we bought that card it's only been a couple of weeks my dms from kids all around America and around the world they're going crazy to see that card these are you know father-son relationships that are in the hobby I had no idea how big this is you talk to 10 people five of them have been collecting cards since they were seven years old. This card is the absolute El Supremo card of all cards.

40:13It's the dual logo with the gold logo. And there's only one in the world. So I've been thinking to myself, maybe there's a way when the laws provide for it to tokenize the index, to let people have ownership of the index that owns those cards. So they too can enjoy, you know the value of those cards over time yeah well that well we don't hold the cards anyways but it's in a vault you can't take that out of the vault you know why you can't let the signature fade so the only time i ever look at my card is on my phone like everybody else's collection they all look at the phone so if somebody has a thousand bucks how would you tell them to invest it at some point you have to you know have a certain amount of money before you get into alt so let's just say $1 ,000 or$10 ,000?

41:01If I had$10 ,000, I'd use Beanstalks and I'd just get a diverse portfolio of some crypto, some stocks and bonds that pay divs, and some T-bills. And then I just look at it on my phone every day. And it doesn't have to be Beanstalks. Any app that if you think you can pick stocks all day long, you can't. It's almost impossible. But an app could take$10 ,000 and It index you to those asset classes that appreciate over time. But the key is you need the discipline to put away every month something. I do the same thing. You have to force yourself to put something away every month for the future. Not only yours, but who's coming after you.

41:40Like if you want to take care of the future, you've got to invest. Well, something that you have talked about that we disagree on is the coffee debate. You have said that people who spend$5 on a latte are stupid. Yeah, I'm right. I disagree. Well, then you're wrong. It's that simple. Why, if you can't afford to pay off your credit card? I think in relationships, the little things matter. The notes that you would write. Well, let's have an argument I'm looking forward to. Let's do it. In finances, it's the big things that matter. It's negotiating your APR. It's making bi-monthly payments on your mortgage.

42:16So you're spending less. It's not the$5 latte that actually adds up. Let's do the math. $5 a day, five days a week is$1 ,300 a year. Plus 4.1 % compounded interest. Sure. But then instead, let's say you had a$500 ,000 mortgage at 6%. You do bimonthly payments instead of monthly. You're shaving off$150 ,000 on your mortgage. So what about focusing on the big things, not the little things? Well, I'm making a different point. I'm saying if you have a credit card balance that goes into the next month and you're spending five bucks on a coffee, you're crazy. Because that$5 could have been used or$5 a day.

43:01Usually it's more because you're getting two coffees a day. You're getting one in the morning, one at night. I'll give you permission to buy a coffee for five bucks if you have no balance on your credit card at the end of the month. 23 % interest. interest the reason I own all the credit card companies is people that are paying 23 percent interest why would you do that to yourself I can't make 23 percent in the market every year why would you let someone do that to you and so no no coffees for you except the one you make at home for 19 cents unless you pay off your credit card why can't we agree on that I think if you're in credit card debt for sure but studies have shown that if you allow yourself small indulgences you'll be more likely to stick to a financial plan because you're not in a deprivation mode.

43:49So I'm not talking about$500 shoes or watches. I'm talking about a$5 latte that keeps you on track. I forbid you to give people that advice. I forbid you. That's just horrible. You got to pay off your credit card. After your credit card. After credit card. I think the problem is that you are saying you can budget your way into wealth. you know no i'm not saying that i'm encouraging you to the bit you i like your idea of staying the big picture there has to be a point in your life when you have no debt it's got to happen in your 40s in your late 40s maybe early 50s if you want to retire one day and you don't have any income anymore other than your investments you got to get out of debt you got to pay off all of your debts including your mortgage maybe you got a 30-year mortgage 20-year mortgage you're going through your life, the 20 years are passing you by, you're paying off that mortgage.

44:41But you got to arrive at 65 years old, hopefully healthy, with a million five in the bank that you're actually living off, traveling with, enjoying your life, because you deserve it after working your whole life. But if you burden yourself with debt, you're not going to get there. You're going to have a very bad outcome in your 60s, 70s, and 80s. I lay that at your feet, Miss$5 coffee. You want to take that$5 and pay down any debt you have. You do not deserve a$5 coffee if you're in debt anywhere. That is... Right, but after debt. Oh, okay. If you paid off all your debt, including your mortgage...

45:23No, I don't think including your mortgage because that's actually debt. So I think rich people have a different word for debt. It is actually debt. I don't like the way you're calling a mortgage that's not debt. It's debt. Yeah, but rich people say leverage. rich people still use debt it's just called something else yes except wealthy people rich people use leverage particularly in real estate construction financing because it's been around forever but they have a i'll tell you a story about debt for rich people i met a billionaire sitting in a 15 dollar walmart chair on a multi-family home he's very i won't bring his name up because he never wants me to bring it up.

46:01And he came over from Poland when he was young, immigrated here. And he told me about his experience in real estate, that what he did with his wife when they came over is they bought a home, they scraped, they both, they're working, and they borrowed money from the homeland and they bought a really inexpensive house and they ate pasta almost every day until they were able to pay down the mortgage on that house. And they call that a pasta house. As soon as he paid off the mortgage, he started eating steak and he bought the house beside it. Then the new house was the pasta house, the one that he had paid off the mortgage in.

46:48He cut it in half and he rented out one side. so he lived in a small area inside this house i think he actually went to the basement and he rented the surface up and he called that his steakhouse but they started eating protein so he went from pasta house to steakhouse and then he got the next house and then he borrowed money on that and after he paid all that off it became a steakhouse and over time he did that till he was a billionaire because the asset value of the land and the houses went up over 30 years. All he did was run around the neighborhood buying houses and eating pasta when he had debt and eating steak when he had no debt.

47:31That's a good analogy, I think. So if you're going to use debt, you got to pay it off. You have to have the philosophy of paying it off. Yeah, not all debt is created equal. Mortgage debt and credit card debt are different. What about student debt? How do you feel about that? Miss$5 coffee? Rank it by highest interest rates. You can't cut off every small indulgence that makes you happy in this life and expect people to stick to a financial plan that's sustainable. Here's my - Wait, wait, wait, wait. Let's stop right there. Why does wasting money, why should that make you happy? Shame on you. Why?

47:59It's not about the coffee. If you don't like coffee, it's something else. It's a small indulgence. Why do you have to waste money at all? It's not about wasting money. It's about buying things that make you happy in life. What else are you doing with your money? Well, maybe you're an addicted person that has to spend money to be happy let's discuss that i'm not an addicted person but i think in every sustainable let's talk about crash diet they never last because you cut out every enjoyable thing but i'm just trying to say the mindset is your mindset your entire adult life is to pay off all debt so you arrive in a place where you got the mil five in the bank and you have no debt that is how you're going to be a happy camper well i think every millionaire and billionaire did not get rich by skipping coffee.

48:42No, that's different. But you're saying you're trying to compare what an entrepreneur does who takes immense risk. Right. By building businesses. Yes, but that's not easy. That's how you build wealth. You can't budget your way to wealth. You can budget your way to becoming a millionaire at a million five by simply keeping 15 to 20%. By not buying the coffee? Yeah, you can't buy the coffee. But you're building wealth through building businesses. I'm not saying, you're fixated on coffee. I'm just saying, why waste money? If something costs 19 cents and you're paying$5 for it, Why? Listen, I grew up in an immigrant family.

49:14I pick up every single penny I see because I was always told that if you don't pick up a penny, you're not worth a penny. So I get it. I always pick up a penny too. You know, I do the same thing. If I see it on the ground, I stop, I pick it up. Because if you don't, bad karma. Well, now we can agree on something. There you have it. I'm glad we did the whole circle on that one. You've said that there won't be any cuts this year for interest rates. Well, I would say 16th is right around the corner. That's when the Fed makes its next decision. I'm thinking 25 basis points, maybe, but maybe not. We have a lot of data between now and then.

49:46What I'm concerned about, you saw the Lululemon report, if we're getting into stocks again, but they missed their numbers huge, tariffs. So they're going to have to push prices. They're going to have to raise prices. And so a lot of companies have been holding back, waiting to see where tariffs settle out because the policy has been very unstable. It's all over the place. You know, Japan is at 39, then it's at 10, you know, all over the place. And we have to wait to see where it ends up. If it ends up being around 10 % reciprocal, I think everything's going to be fine. Somebody's going to be paying more.

50:14That's very inflationary, and it will be. But I don't think the Fed should be bullied by any administration into cutting rates just because the sitting president wants them cut. They all want them cut. I mean, it's just sport to bash the Fed. Every president does it. And so, you know, it's not unusual. But this Fed knows his mandates over in May. And as I've learned over the years with all different feds, they don't give a poo-poo what the president thinks. They don't care. That's not their mandate. Their mandate is to be independent. The whole world likes it that way. They make decisions based on what they think is right for the economy.

50:51And their dual mandate is employment and, of course, inflation at 2%, which we are a long way from right now. So if you're getting excited about rate cuts, I wouldn't. I say 25 basis points next. Yeah, I would think you might be right on that, but that will be the last one this year and maybe for a long time. It depends what happens in the back end of the year on inflation. Does it show up anywhere? And let's wait and see the next CPI report. Well, I worry about this idea of glamorizing low interest rates because we remember 2008 interest rates were on the floor because the economy was in the pooper.

51:28That was a really bad outcome. A very bad. Remember how many people got wiped out in real estate because of leverage in 08? That was bad. That's rich people debt. Everybody did. There was lots of poor people got wiped out because their mortgages. You know, it was bad. It was very bad. Okay. Well, if you were the treasury secretary right now, or if you were Powell, what would you do? Just for one day? I'd hold rates steady. I wouldn't do anything. Economy is doing very, very well. Employment's near full employment except California, which is, they're screwed up. They have 5 % unemployment here, but it's a mismanaged war zone state.

52:01There's nothing you can do about this place until you change leadership. At the municipal level and at the state level, it's a mess. Do you miss Elon in Washington? Look, I'm a big Elon fan. The guy has great executional skills, and he's done so much and still is. But I'm talking about the overall U.S. economy is in pretty good shape, and we just hit a new high in the S &P two days ago. so we do hit highs every 20 or so days yeah but you would think with all of the turmoil around the world and all of the concern we have about you know tariffs and everything else i think the economy is looking at about 24 months saying they like what they see and i think a lot of it has to do with the productivity of ai in every sector so you're bullish i am in fact my real estate strategy has moved to data centers that's what i'm building now in real estate and i've gone from climate control storage, multifamily, luxury condo into doing data centers, which is very complex, but interesting.

52:57And I am bullish. I have a pretty large portfolio of almost 53 companies now in almost 11 sectors, private. We're doing very well. Good sell-through. We're going into holiday now. I mean, it's going to be interesting. We'll see. So I'm an optimist. I never bet against America. It's stupid to do that. Look at the history. I mean, our number one export is not technology or energy. It's the American dream. This is the number one entrepreneurial economy on earth, and it has been forever. And it will continue to be because of the nature of democracy combined with the American entrepreneur, the American dream.

53:37That's why people come here. That's why you're here. That's why I'm here. And that's why it happens. and so I look at it and say to myself for those of you that are entrepreneurs and that's about a third of the population give it a shot like start your company when you're young because you can well time-wise you can afford it but the older you get the more obligations and responsibilities you have the harder it is so if you've got two kids a mortgage and you're both working and you decide you want to quit your job and start a business you can do it but it's a lot harder You've seen thousands, maybe more, pitches.

54:13What makes a good pitch? You know, a good pitch is an entrepreneur that, first of all, can take the heat, which is not easy, but that understands whatever they're thinking is going to happen, it won't go that way. They have to be able to pivot and they have to express to you. And there's two things I ask for now, just to make it short and sweet. You've got to know your CAC, customer acquisition cost, and your ROAS, return on ad spend. If you don't even know what those mean, no chance I will invest in you. And I also want to hear that you're using the inexpensive AI tools that are available now that your competitor is using.

54:49We use a lot of AI in our businesses now, particularly to generate social media content. It's cut our cost dramatically. So those are the things I'm looking for. And I will also never invest in a hot sauce. If I see another hot sauce deal, I'm just going to... My head's going to explode. Our Big Cag Energy sweatshirt. Before we go, can you sell me this pen? Yeah, let me look at it. All right.

55:21Oh, you obviously don't understand something about this pen. This is a piece unique. How did you get this? This is a one of a kind. This is the only one in the world with this logo on it. You'd be out of your mind to even write with this. This should actually be in a case. This could be priceless. I don't know. I mean, if you don't buy it, you're crazy. I mean, are they like watches? Should I hold one in both hands? Yeah, you should be like, if you can write ambidextrous, that would be amazing. But this is the legendary. I've never seen one. F-39 BP. I've only heard about them. How did you even get this?

56:03And if you don't think it's valuable, can I just take it? Do you mind? This thing is - Put it in your collectibles. That is fantastic. With your collectibles in the vault. That is how you sell a watch. Sold, Kevin. Yeah, absolutely. Still a salesman. That's all I do. I'm just a sales guy. That's it. You sell the sizzle for sure. We end our episodes by asking all of our guests for one final tip that listeners can take straight to the bank. Something that we didn't go over. Yeah. Well, I would say this to everybody that I've learned myself, and I wish I'd thought about this earlier in life. You should spend about 30 % of your day doing something that is not in your comfort zone.

56:43Something that you're scared to do or you're worried you're going to get embarrassed if you fail at it. Because, you know, we do a lot of things now about exercise or diet or all this stuff. but the number one muscle in your body is your brain and you don't use it when you get into routine and so i'm dyslexic so i have a very hard time memorizing stuff and i you know that live tv i don't have to memorize anything but i got offered a role across from timothy chalamet last year in a movie called marty supreme coming out christmas day and gwyneth paltrow's my wife but the script was like a telephone book and it really scared the shit out of me that i was going going to have to memorize all that like that's a lot to do and Timmy told me you got to memorize all of it not just your lines because when we start shooting this thing you have to know we're going to be out of sequence because you've never made a movie and this is what's going to happen to you the first day we shoot will be probably something at the end of the movie and you're going to say what we're not starting on page one so you got to memorize the whole script and know where you are in time and if you can't do that you're going to fail and I said fuck it I'm going to do it.

57:50I'm going to figure out how to do it. And I used all the tools that I could get my hands on to just help me, including all the software. Now that, you know, the other characters can be, you can actually practice with them online. It's almost AI like to learn where you are in the script and learn your lines, which I did. And I was, I hope I'm successful. I'll let you judge and the critics. I'm very proud of the movie. I mean, I've never done this before, but that's It's 100 % out of my comfort zone. But now I feel I could do that again. And so my whole point is, is it guitar for someone? Is it learning the violin?

58:24Is it painting? Is it photography? Is it learning how to play tennis or whatever it is? Something you think you can't do. That's the advice I'm giving people because it really makes your life better, makes you more productive, and you feel more confident about everything. You thought you were going to hit a wall. You couldn't do it, and you did. That's my whole point. Congratulations. Thank you. I'll buy you a latte. Yeah, no, listen, you know, go ahead, buy a$5 coffee when you're going into the movie theater. That's Kevin approved? Yeah, absolutely.

59:00Money Rehab is a production of Money News Network. I'm your host, Nicole Lappin. Money Rehab's executive producer is Morgan Lavoie. Our researcher is Emily Holmes. Do you need some money rehab? And let's be honest, we all do. So email us your money questions, moneyrehab at moneynewsnetwork.com to potentially have your questions answered on the show or even have a one-on-one intervention with me. And follow us on Instagram at moneynews and TikTok at moneynewsnetwork for exclusive video content. And lastly, thank you. No, seriously, thank you. Thank you for listening and for investing in yourself, which is the most important investment you can make.