EVERYTHING You've Been Told About Making Money Is WRONG! | Kevin O'Leary

[Music] Hey, Mr. Wonderful here! You know, one of the things about doing television, live television, particularly earning more early morning television—you got to get up early. I mean, this is live TV; very often the show starts at 6:00 in the morning. So let's work backwards. Let's say you're near the studio and you can maybe walk there in a few blocks. So you got to get up—it's sort of, you know, 4:00, 4:15. You've got to read the notes because the news changes overnight. I don't have to tell you that.

So here we are, it's real early, and just got out of the shower. But also, I got some fantastic "Ask Mr. Wonderful" questions; like, they just keep getting better every week. So, trying to find time to fit these puppies in because I want to answer them. So we're gonna do it right now. I got to shave, so we're gonna do it while I'm shaving, and then we're gonna boot it to the studio right afterward. So let's, let's start with—hold on one second—there’s our ears. You know things, you get out of a shower, you don’t want to let your beard go dry again. This is much tougher to shave it. Yeah, and that’s, you know, TV—you gotta look your best, no question about it.

What I really liked about this week is there's a lot of career-oriented questions in there, and I think we've got to get into that because many of you in your 20s are trying to make a decision about direction. You know, you're at college; you're trying to pick a career. Maybe you did arts, maybe engineering, maybe something else in sciences.

But I got a question from a 20-something year old named Saffron. Now, I love that name! I really love that! I’ll tell you why; you probably don’t remember this artist—excuse me, early morning—his name was Donovan. This guy was a huge hit during psychedelic times, and it's a classic iconic hit. Yes, it's all just mad about Saffron. Saffron's mad about me, bump bump bump—huge hit!

I don't know, I get off that derivative, but it reminded me of a song when I heard Saffron's question. So let's listen to her question first, of all. Let's get that done because I think it's a good one.

Saffron: "What do you got? I'm nearly 22. I almost have to meet two people. I need some more advice regarding my career. Constant business idea. I suffer from a lot of social anxiety, so I struggle a lot to the point where I couldn’t leave the house. Ideally, I want to work from home. I've nearly completed my bachelor's in creative writing at university. I've also always wanted to start a writing business as I enjoy copywriting, editing, and managing social media content. I've had writing experience for a few businesses and I enjoyed writing to help others. Do you think my writing degree is valuable? Should I pursue a master’s degree in the morning? Is it worth getting more certificates under my belt? How do I go about my writing career, and how should I start my writing business? How do I go about getting experience?"

So, Saffron, there's a lot of issues there. First of all, anxiety. Now, you may be able to go and get some help on that, but great artists sometimes are afflicted by things like that—anxiety attacks, etc. It's just sort of how some people's brains are wired. But obviously, the concern and uncertainty about your career, because a writer is really not a nine-to-five gig.

There are many, many versions of what writers are—in television and films. Screenwriters have a different gig than writing jokes for, let's say, a nighttime show or even a ghostwriter for books. Now, I’m not going to discourage you in this career because initially I always used to think, “Well, the only thing you should do is engineering because you're guaranteed a job.” But I've learned that writing, and I work with many different writers now—including the ones, the ghostwriters that work with me on books, the works of the people I work with doing television, the scripted series that I produce or whatever I’m invested in—there is a very big career in writing.

What matters about it is: are you any good? And unfortunately, you can’t determine that. The market does. Writers that are good get paid for their work; they actually have people that are saying, “That's so good, I can’t do it myself, I’m willing to write you a check and find you to continue to write for me.”

And it sounds like you might be that kind of person! I mean, but the only way to pursue this career is you gotta, A—get out of the house; you got to get rid of that anxiety issue, and you’ve got to go peddle you. You're the brand, you're the person, you're the writer—Saffron is the whole deal! And Saffron, I gotta be honest with you—either you're going to make it or you're not. It's very binary. I know that sounds kind of, you know, callous, but you’ll know in about 36 months—in about three years—you’ll either get gigs, you'll get involved in the writing industry, the word will get out about you.

I mean, that’s, you know, I think about the writers that I've actually written checks to—amounts as much as $50,000 to $100,000 to people who helped me write my books. Luckily, they've all been bestsellers, so the royalties come streaming. And I advance them fifty, and then they recover that and I have to pay them more as the book sells. But you'll know, you just will, and the market will know, and people will talk about you.

I love that question because I can feel your angst and the challenge of getting into the arts. But it doesn't mean it can't be a career. So, Saffron, get out there and make it happen! That's what it's all about—just mad about Saffron! I love that song.

Okay, let's move on, and you’re just a little richer. By the way, the water here is very hard; not easy to rinse.

Okay, next question—what do we got? Oh, I'm just, I'm loving every week! I keep the international aspect of this absolutely fantastic. Oh, here's Erin—ready? What do we got?

Erin: "Hey Mr. Wonderful, Erin from Australia! So, I mean, what you’ve got—public housing, I guess—all of that work for Uber Eats, which I can as my business. I got five hundred dollars saved in a girl somewhere. I'm just wondering if it's a good idea to try and invest that five hundred dollars into something or do I just—? I tried going into a bank account; it's just too easy to access the savings. You can’t believe I gave you Chris, so I stopped doing that and I've just been hoarding money in my closet. Sir, is that a good idea or a bad idea? I just want to know, what do I do with my $500? Thank you!"

Alright, I love that! Erin is part of the gig economy; he's making a living as an Uber Eats driver. Nothing wrong with that! I mean, it starts there. You just—you learn early what entrepreneurship is all about because you know you’re making all the money based on your time, you're moving around, and it’s not a bad thing—it's a good starter position; that’s for sure—because it really makes you appreciate stability.

But this idea of saving is important. So, Erin's got $500, you know, and he's debating what to do with it. It's very important that he’s even thinking about that—that he’s actually saying to himself, “I've got to start saving.” No matter what I do, I don’t care if I’m a Uber driver—whatever you do, you've got to take ten, if you can, fifteen percent, and put it away.

Now, where you put it away is very interesting because he's fighting with himself. Erin, you got to put the money where it can actually compound. I don’t know you’re in Australia; you can definitely open a brokerage account. You can put it in there and invest it. Probably at your age—because you’re young—stick it in the stock market. It’s going to go up, and it’s going to go down, but generally speaking, over a long period of time, you're going to make six to eight percent on average—maybe seven—which is much better than what you’re gonna get in that savings account, which is probably paying you less than one percent.

But what I love about your question is you’re having a hard time keeping your fingers out of it! So don’t hide it under the mattress, don’t put it in your pocket—put it in an account that’s much harder to get it out of! That means you can open up a brokerage account with five hundred bucks— you can do it! But you’re absolutely right, and you brought up a great point—the biggest enemy about investing in yourself is yourself. If you’re weak, you’ll keep dipping into your savings to buy stuff that you shouldn’t be buying because you should let that money sit there and compound.

In thirty years, if it was compounding at six or seven percent, Erin’s $500 plus all the money he's going to continue to put in there—even if he stays as an Uber driver for the next twenty years, it's going to be what you retire off! That’s basically what it is. I love the question, though! But I, Erin's honest—he knows that he’s his own worst enemy.

Let's take a quick toothpaste break here while we get our next question. And I got to keep an eye on the time because I got to get to the studio by six; we know that. Next question here is from Chris. Chris, what do you got?

[Music] Mmm, mmm—good question! Now, Chris is basically proving he's got a business because he's got revenue—that's the first step! Anytime you can be at six figures, you got something going on; you're solving a problem for somebody, and they're willing to pay you for it. How do you grow it? That’s basically his question! This is a big decision, and I'll tell you why—growth involves leverage. Leverage means more people. You have to start to manage people.

Now, some people are really good at it and others—uh, this is a skill set that either you are born with or you have to learn very quickly because in growing a business, you have to draw on new talent—particularly, it sounds like in Chris's case, to get more sales. So you’ve got to find great salespeople; you have to motivate them. Sales is a very hard job, and you have to manage them—if you can manage the business at the same time. And that, my friends, is what entrepreneurship is all about!

I say to Chris because he’s got a business and he’s got six figures and he wants to get to seven—he’s go for it, buddy! Go for it! Now, is your life gonna be more fun and easier than last year? No, it’s gonna get much harder! But that’s why they call it work! Is it worth it? Oh yeah, yeah, yeah, yeah, yeah! It’s definitely worth it! You’ll learn so much about managing people and growing a business and helping others grow their careers too.

But the key to Chris's success is the original six-figure sales—whatever you’re doing, Chris, keep going because you’ve got a business there, my friend. Let's take another question—I like that! Alright, here we go; we’ve got Garnett. Garnett, what do you got for me?

Garnett: "Hi Mr. Wonderful, my name is Garrett. I'm an entrepreneur, Gary, seven years old. I have two businesses that aren't really scalable but they make the money that I need. And so for that reason, I wanted to get into venture capital, save my portfolio, and maybe find something that is more shareable, scalable. My question to you is, do you think that there's a type of field, structure, company, or type of risk amount of risk I should be looking for for making my first investment in venture capital? I know it's a very risky space, so I am a bit scared going in. Or maybe is there a certain amount of my portfolio—percentage-wise—that I should have? Any advice you have would be extremely helpful. Thank you!"

Down Fang down—Garret, very understandably: risky venture capital! You know, I invest in just from the Shark Tank thing—in 30, 40 companies, and maybe, maybe a third of them work out, and Shark Tank’s a very powerful platform! So we can help people acquire our customers, so it’s great in the venture capital industry: only one in ten survive. That means you’ve got a 90 percent failure rate over a long period of time—that’s not good!

So I’m not in love with you investing in venture capital at your young age when you have money to invest at all. If you’re going to do it, Garret, the only way is you're the operator. You invest in yourself, you invest in a business, and you try and make it, because you’re gonna make a lot more money and solve for your own career than investing in a whole bunch—you’re going to need to invest in ten to get one to work out, and you're going to lose money in 90% of them—that’s terrible!

Why not invest in yourself at your age? You know, I remember when I started out, I couldn’t sleep at night; I was so worried. You’re always in fear of failure, but that’s a great motivational aspect of being an entrepreneur! You start spending your own money on yourself. The best investment ever in your life will always be yourself—particularly if you understand what capitalism is—you know that you’re taking a risk. If you’re going to take a risk, the person to risk on is you!

So unless you’re gonna invest in yourself, I’d invest that money in the market on a broad-based, diversified portfolio and let it make six or seven percent for you. But I’m not hot to trot to stick money in venture capital! The time in your life when you invest in venture capital is when you’re giving back after you’ve made a ton of money. Then you say, “I can put five to ten percent in a whole bunch of deals and help out the next generation of entrepreneurs.” That’s what I’m doing. But the real dough is sitting in a very conservative portfolio; that’s how I buy toothpaste! I gotta have cash, that’s how I eat, and I get it for my portfolio.

But anyways, thanks for that question! Let’s take one more here. You know, I’m keeping an eye on the time—4:50—by the way, what are we wearing today? I’m going to be wearing a Grand Seiko, red of course, red band. It’s a beautiful watch! You know one thing to understand about this thing is that a lot of people think the Swiss were the first to create the complications in watches back in the early 1900s—say, poverty!

It’s not true! It was the Japanese! They were the very first to make very complicated movements, and they still do today. You know, people think of a Seiko watch as an electric quartz watch—no, there are master artists within the Grand Seiko organization that make these incredibly complex movements with beautiful—this is actually poison oak lacquer! This beautiful red—you don’t want to stick this on your tongue; you want to paint it onto a dial like this, and it’s beautiful rose gold! I love this watch! Obviously, I wear it today. It’ll be terrific on TV.

I’m getting, you know, distracted here; I love talking about watches! You know that. Let’s get back to the questions because there are some great ones here! This is from Michel—Michel, my belle! Great Beatles song—here we go!

Michel: "Hello, Kevin. My husband and I are preparing for his military retirement. A few years ago, terrible experience trusting a family member in the financial planning and investment space. What is the best way to verify legitimate financial advisors? Thanks so much, Michelle!"

Whoa! That’s an interesting one, Michelle! You know, very often people make the mistake Michelle made, and she’ll never make it again. You think the safest place to put your money is with another family member—no! You want an arm's length relationship with an accredited advisor.

Now, many of the services that are online provide advisory information for free to you, so you can invest on your own. But if you require an advisory, very often you should have one—particularly if you’re investing in fixed income, like bonds and treasuries because they’re not easy to do on your own! Make it somebody that has nothing to do with your family—somebody you can hire. If you don’t like the work they’re doing for you, you can’t fire your brother or your sister or your uncle—they’re still gonna be your family members, and you’re gonna have bad blood between them. You don’t want to do that!

Now luckily, online, if you're a registered representative, if you’re a broker, for example, there are many online services where you can go find out that person's past. I’m not trying to be negative, but obviously not everybody’s great. But 99% of advisors are; but you can go online, look up their name, and find out who they work for and find out if there’s ever been any complaints against them, and that’s part of what you have to do to find an advisor.

I work with many different advisors, particularly in fixed income. They have a long track record of success; I've known them for years and years, they work for accredited firms, and I can monitor my county month, but they are not my family, and they never will be. Thanks for that question, Michelle!

Alright, let's move on here. I’m looking at the time—you know, one of the things you’ve got to watch out for when you’re just a little—if you’re hair-challenged like I am—you don’t want to avoid the Bozo the Clown look, where the hair is sticking out on the sides! So I have this little trimmer thing—I could see a couple of errant hairs that are gonna show up on the camera. So I just do a little—yeah, there you go! Probably need a haircut soon!

But anyways, looking good on camera—you better think about it! But you don’t want the bozo factor; you want to nip those little guys in the bud. There we go! Fantastic! Alright, on to another question here! Listen, this is a personal grooming show! You know, last one, which is good because we’re now, yeah, I got it! I got it, I gotta get going here!

This is Rosalie! Rosalie, can I think of a song for you, Rosalie? Yes!

Rosalie: "Hello Mr. Wonderful! My name is Rosalie Rivia, and let me just say this: you are Mr. Wonderful! You've got a very soft heart! Not—not the wing it, thank you! Rosalie, the television Mr. Wonderful was considered a hobby. You guys use that word a lot. What is considered a hobby? Also, I had a patent; I sent it to Walmart. Walmart wanted a million of them; I sent them the prototype. They wanted a million; I did not have that to give to them. I thought they'd produce any license, but they don't. So, I have to find a company, and I really—it’s hard to find that company. Thank you very much for this; I truly appreciate it! How can I find a company? Thank you!"

Alright, Rosalie! There’s a bunch of questions in there, but this is great! There are many people in your situation! First of all, what is a hobby versus a business? That's what Rosalie's first question. In my definition of that is—if you start a company, start a business, you start a product, you start something that you think should make money. If it's not making money after three years, that never was a business! It was a hobby!

And you gotta take it behind the barn; you gotta shoot it unless you want to just spend your time losing money! Because you know, great entrepreneurs, and I’m telling you—this happens to every entrepreneur; it certainly happened to me! Not everything works out; you gotta try things! The first two may not work, the first three may not work, and then finally you get a winner! You keep trying; that’s the whole idea—that’s the journey of entrepreneurship!

But when you get a product where Walmart—a big box retailer—says, “You know, I’d like to try that! That sounds like a good product, Rosalie, but we’re not manufacturers for Walmart; we’re retailers. We’ll sell it online; we’ll sell it in our stores. You gotta bring us the product!” Here’re the things you want to do. If you're dealing with a big box like that, you do NOT want to roll out your product to every store!

You can’t afford the cost of the inventory, and you don’t know if it’s gonna sell yet! You want Walmart buyer to help you with a test—maybe 200 stores! The way to go! Because you’re a female entrepreneur, that’s a plus for you, because we want to help more women get into business, and certainly, Walmart’s a great corporate client and customer for that and great corporate supporter that way!

We do a lot of business with my certain companies with Walmart; they’re terrific, they’re wonderful because they pay their bills, and they’re very big; they can afford to pay you! But, you’re probably actually getting into manufacturing; you’re probably going to have to go offshore to build this to make it cheap enough to sell. I’m not saying you have to, but you may have to. You need a partner, Rosalie! You need to find a partner that you trust that can help you actually go through the logistics of building a prototype, getting a mold, manufacturing the first—I don’t know—thousand pieces, and then sell them!

And once you find out what customers say about them, tweak the product a little bit, make it a little better, go through the process! If Walmart's gonna be your partner because they love the product, they'll work with you and you'll slowly build this up, but you're not going to do it sitting at the kitchen table unless you're doing everything yourself! It sounds like you don’t have the logistics skills—and look, don’t feel bad about it; I never did either! I found a partner early on that could do that—manufacturing, logistics, inventory control. I’m a sales guy; I’m a marketing guy!

I went to Bentonville; I met with buyers—I’ve met with Walmart! I know the journey you’re going through and many other retailers to that matter! But it sounds like, Rosalie, you're gonna need a partner. Look, I loved the whole "Ask Mr. Wonderful" this week! I love the international aspect! You know, it’s fantastic to talk to people all around the world! It’s a great tool, a dialog!

And if you don’t mind the whole shaving thing and everything, but I just gotta find time in the day—that’s the problem! I’ll answer these questions; I want to do it every week! So you’re gonna have to bear with me as we do these journeys all around the country! I don’t know where I’ll be next time, but anyways, it was fantastic!

And remember all those questions—if you think about it—we’re about savings, about a career, about manufacturing. They’re all inspirational in the sense that someone wants to advance! They want to start a business! Saffron wants to be a writer—that’s a career thing! The human condition is to march forward—not a destination! Remember this: it’s a journey; not every day is great.

Now, I gotta start my day; you know this is—I gotta put this on and hit the road! It’s always—I just love choosing the first watch of the day because it kind of sets the tone for the rest of the hours ahead. Once it goes on, my business—see you next time! That's enough! [Music] [Music]