"The MILLIONAIRE Investing Advice For EVERYONE" | Kevin O'Leary

I say start small, start small! Dip your toe in the water, see how it works, get a feel for it. So why are people not investing? They're scared, disciplined, scared! Evan, no, they're scared. But it troubles me immensely now to realize that there's a hundred million people in America that don't invest.

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I want them to see the master elevator pitch—man! Tell us what Beanstalks is and why we should care. Well, Beanstalks helps you make the most important decision of your life: investing for your future. I realized, going through this whole COVID pandemic thing, so many of my employees haven't saved any money at all. There's a big difference between saving and investing. The whole idea is you take some number each week and you put it to work as an investment. You do it when you're young and keep doing it throughout your whole life, so when you retire, when you're 65 or so, you've got some serious money in the bank. We know from the past 50 years that the market returns are kind of 6 to 8 percent over long periods of time.

Now, what I'm shocked about is so many of my employees and the companies that I work with—nobody's saving anything. They're not even investing or saving! So I wanted to change that. In order to do it, I didn't want to make it complicated. You had to buy and sell stocks and bonds. So many people don't want to do that or don't know how to do it. Beanstalks makes investing really simple. You attach it to your bank account; you decide. I suggest a hundred bucks a week. Most people can do that, Evan, you know that.

Then it puts it to work in a series of very diversified exchange-traded funds, and those are built so that you can build a very diverse portfolio that just goes to work for you week after week after week after week. You can automate the hundred dollar transfer or you can decide what and how much you want to do. It doesn't matter. But I try to make it really simple because you've got to start now, now, now, now! Because if you do a hundred bucks a week and you're only making, you know, 52, 58 thousand a year, the average American salary, you'll end up with, hopefully, if the markets do what they do in the last 50 years, you'll end up with something like a million five in the bank! And that's what you can live off over the years.

You've given so many different investing principles, maxims, from never put more than 20% into equity than the gold, or you know the advice from your mom who spent a third of her paycheck. You're talking about 100 bucks a month. Your mom put a third of her paycheck into bail bonds for 40 years! Ideas like only spending interest on the principal, only buy dividend stocks. How much of the Kevin O'Leary strategy for investing is rolled into Beanstalks, or are you just giving it up to the AI to take care of it?

No, no! I have a philosophy about conservative investing. If you look at what's inside of Beanstalks, it's reflected in that. Obviously, you know, I've been an investor in Beanstalks and helped fund it because I couldn't find anything like it. But there's very conservative portfolios of companies with strong balance sheets to pay dividends, in many cases. And that matters because when you're investing, you want the power of strong balance sheets because they're the ones that don't necessarily collapse in a recession or a downturn like we just went through. But at the same time, you want the compound investing of dividends in a long-term strategy. That's what my mother taught me.

You know, if I could have turned my mother into an investment strategy, she would have been called Beanstalks. That's what would have happened, and that's the way I look at it. I'm really proud of the platform. I tell everybody I talk to now, all the millennials I work with: download it, check it out, look at it! It's free to download, have a look at it, and it's very, very simple. Try it and see if you can get into the discipline it provides of putting something aside each week.

That was another one of my mother's edicts: she did a third of his paycheck—you mentioned that, Evan. That's a lot for people! If you can just do 10%, that's spectacular! If you could just do 10%. But this idea of investing a little bit in yourself—there's always something every week, some piece of crap you don't have to buy that you don't need, that you're going to throw out in six months. Why do that? Ask yourself: imagine I'm on your shoulder every day looking at you as you're picking something up. You're about to buy another pair of sneakers, saying, "Don't do that! Don't do that! Invest in your future!" That's what Beanstalks is for.

I love it! So why are people not investing? They're scared, disciplined, scared! Evan, no, they're scared. They hear all these slick terms. You've got to be a stock picker. You know there's a lot of people that want to try and do that. I'm okay with that. But if you really want to invest, that's not day trading. You need to understand that when you're investing, you're trying to find positions you're going to buy and hold onto over a long period of time. So, you know, they don't—some people get intimidated, saying, "Well, I don’t know how to buy stocks and bonds. I don't want to set up an account for that." That's why I developed Beanstalks—to make it super simple.

I mean, basically, you download it, you tell it, tell a little bit about yourself, you link it to your bank account, you tell it what to take out and put into your investment account. It's a great way even to save cash because it gives you an interest rate on that. It's a savings vehicle. But more importantly, it's an investing vehicle! And people, I say, start small, start small! Dip your toe in the water, see how it works, get a feel for it. Put a few hundred dollars in, and then understand what's going on, and then invest for the long term. That's what Beanstalks is all about!

And is it just five bucks a month for the whole thing? Yeah, I wanted to make it real easy! You know, I talked to so many people about it, and there's all kinds of different schemes and costs and fees. I said, "Screw all that! Make it really transparent and easy." No matter how much you invest, it stays at five bucks a month. That's how it works, that's how we're starting it. That's how I foresee the future looks, and I think people want that. They appreciate the transparency. They see, "Okay, one price, one fee, and I could put in 200 bucks a month, I could put in a thousand a month, I can put 500, whatever it is!" Get to work, start investing!

Look, you know, I've been—I live in the financial services industry, and I realize we do very complex stuff with bonds and stocks and private equity and hedge funds and all that. But that's not the average person. They don't want to do that. They just want to find a way to safely invest and do it in a way that they can understand is transparent and makes it easy. That's the key—simple investing. That's the theme of Beanstalks. That's what I think I've achieved that, Evan. I think people just have a look at it.

So, I guess for people, is this only for someone who's purely starting up, who hasn't ever invested in something, or are you ultimately looking to replace financial advisors? No, no! I never want to replace financial advisors. But when you're starting out and you're only putting a few hundred dollars to work, you know, a week, there's not a whole lot of financial advisors that are interested in you. They want to get to you when you've got a quarter of a million or more.

And that's a good thing—there's nothing wrong with financial advisors. I support them in a lot of my businesses because I'm involved in the financial services industry. I'm worried about the people that are really starting or don't understand investing, regardless of how much money they want to put aside. This is a platform that, you know, lets you use the device that you know very, very well—your phone. Download an app, go to the app store, download it, have a look at it! You don't have to be embarrassed about it, you don't have to be confused. It's all laid out, it's for them! And it doesn’t matter, you know, that you're not sophisticated as an investor. What matters is it's simple and it's diversified.

And that's an important aspect of investing—diversification. We do that by using exchange-traded funds. We think we've got the right ones. We think we give you conservative goods—good companies that, you know, provide returns over long periods of time. That's the essence of it. How did you meet the co-founder? Well, I've had this problem—I've been starting about four years ago when Shark Tank started doing tours of high schools. We've been all over the country.

It was in my mind, but then when I started to see what was going on last year with my own employees and of supply chains that work with my over 50 companies, I was amazed! Practically none of them have savings or investments. And I'm saying, you know, they're young people, they're in their 20s. I'm saying, "Guys, this ain't gonna work! You've got to start taking care of yourself. You've got to start planning for yourself! No one's going to be there when you're 65; you're going to be there when you're 65." You've got to make sure you've taken care of your future!

And that's when I got on the Beanstalks bandwagon. I talked to Connor, the co-founder, said, "Connor, listen, I'm dealing with people every day. You've got to make it easy! Forget about these sophisticated trading platforms. They exist already. There's nothing wrong with it. If people want to try and buy and sell stocks like a day trader, that's fine! But that's not what I'm talking about here. I'm talking about helping people invest for the long term!"

This is not a day trading platform! This is a way to put 100 bucks to work a week minimum; that's what I recommend! And let it grow! Just watch how it works. And I've made it—I think it's—I haven't found one easier. To me, it’s the best platform to keep it easy!

And I think of all the people in the financial sector, you do, if not the best, one of the best jobs of just making complex things feel easy. Because it's overwhelming, it's stressful; people don't want to make a mistake!

Yeah, I built this for my kids. I mean, you know, they're in the same boat all of these others are. And I, you know, I showed it to them and said, "What do you think?" And the whole idea was can you make it so that I can set it up in 20 minutes? Because I'm busy doing my own thing, I'm in college or in school, whatever it is—make it easy! Make it like everything else I do. I do it on my phone. You know, a lot of people don't even use laptops anymore!

So this is a mobile app you can download. And I kind of use them and their friends as sort of a guide to see as we develop the features. All they wanted was make it easier! Make it easier! Make it easier! Make it easier! We worked on it for over a year, and I think we brought a fantastic app to the market. And believe me, it's easy!

Someone's asking, is the app global? Well, it's global in the sense you're going to own stocks from all around the world because we have diversification, but we're focused primarily on American large-cap stocks in the portfolios. And you can see they're very transparent. You can see the ETFs and decide what you want to do. It actually sets you up. But I believe you should have exposure to other markets too!

But most people want to be domestic, and the majority of the stocks are domestic, but they're really high quality, Evan. That's what matters! You want good companies; you don't want speculative, not when you're investing! I get it when people want to day trade stuff. That's fine, and many people do. But this is investing; it's different!

Someone's also asking, what's the difference between this and a mutual fund? Well, a mutual fund, um, you know, is something that I don't use anymore. I'm not saying they're bad, but I prefer the transparency and the tax efficiencies of exchange-traded funds. We don't use mutual funds inside Beanstalks because we don't like them as much as exchange-traded funds. You can see what you own in an exchange-traded fund! It's very, very tax-efficient.

You don't get big surprise tax bills at the end of the season. I haven't owned a mutual fund in years and years and years. To me, it's my opinion; they're old school, they're in the old days. The new trend is to get the efficiencies ETFs provide, and that's what's inside of Beanstalks: ETFs! And I think they're the fastest-growing. If you look at the growth of where money goes to invest in sectors, it's in exchange-traded funds. It's a very, very efficient, transparent way to invest.

And again, if you don't understand what a mutual fund is versus an ETF, we do that for you inside of Beanstalk! So try and make it really simple. So if I go and sign up, am I then asked a bunch of questions based off age, asset allocation? Like how does it then decide where to put my money? You know, you don't even have to do that if you don't want to. I mean, if you say you want to, you know, save into cash x amount and the rest you want to invest, it'll do that for you!

But we've made it even simpler than that. It basically asks you know who you are, what your objective is, what you'd like to do over time. Those are reasonable questions to ask! But again, we've made it incredibly simple. You don't have to sit there and say, "Well, I want a sectoral allocation of this percent for this sector, that percent for this sector." It's inherent in what we've done inside of Beanstalks. We've given you lots of diversification. We've given you an opportunity to be an investor in the markets in a way that I think—I can't think of an easier way to do it!

But again, the best way to get a feel for it, and then simply download it, look at it! It's free to download, check it out. I think we've done an amazing job in setting the steps up, and it won't take you very long—maybe 20 minutes to get set up! And then put your first hundred dollars to work and stay at it!

And remember, I want to be on your shoulder saying, "Don't buy that piece of crap, invest it in your future instead!" I love it! You need to have a little augmented reality, Kevin O'Leary! I should sell that like a bobblehead that says, "Invest in your future!"

Yeah! Yeah, I love it! That's what I should be doing! How did you guys come with the name? You know, there's the idea of growth. There's an old Jack and the Beanstalks adage, and I thought it was really cute. A lot of people remember it when their mothers used to read them that story when they were young. It's sort of a social media, and the way we spelt it, Beanstalks, kind of makes reference to stocks and indexes. It was cute; people liked it!

I mean, you're looking for a name that people can remember. Jack and the Beanstalks is easy to remember, and so far, the feedback's been fantastic! And that's what I like. I love hearing from people that try it. I mean, I, you know, spent a lot of time and money to set it up. Proud of that!

But this is part of my whole financial literacy platform. When I run around high schools now where I talk to kids, and you know, hopefully, we're going to have a much more buoyant program next year. Obviously, COVID has slowed things down, but people's interest in investing hasn't changed. That's why the markets continue to do so well!

There's a real focus on the markets now, and this is a way for you to get involved if you're thinking about the long term. You seem to have taken a lot more of an active role in this business compared to the other investments that you've made—not that you're not active! But this one seems to be extra important to you. Is that true, and how come?

Yeah, you're right! It's a good observation you're making there, Evan. It is. I spent a fair part of my week promoting it and trying to get it, you know, in people's hands. My mother taught me something once called karma. She said, "If you've been successful in life, you have to pay it back or pass it forward."

And I do that with a lot of my entrepreneurs. I've got a portfolio of over 50 companies now, and I spent time with them too. But it troubles me immensely now to realize that there's a hundred million people in America that don't invest! A hundred million! Like that's a huge number! And you have to ask yourself why. What happened? Did we fail them in financial literacy? Did we not teach them? We teach them everything else in high school—geography, sex education, math, reading skills—and we don't talk to them about investing? That's wrong!

So that's kind of one of my, you know, missions, I guess you'd call it. And any chance I get, like talking with you here today, to talk about Beanstalks and really what the underlying motive is, I'm very happy to do that! I really am! I just feel it's important, and I think I would, if at the end of this and a few years from now we had a whole bunch of people saving and investing, that would be a great outcome for me! And the easier I can make it for them, the better!

It's just one of those things that's beyond just a single company—it's kind of a mission statement. I love it! Now, I saw you run Start Engine as well, raising capital for investors. Are you still looking for investors as well for this business?

Yeah, I mean, you know, I'm a big believer in equity crowdfunding. It's a new form of financing—not just for Beanstalks, for all my companies! I mean, it competes with venture capitalists, it competes with private equity, it competes with hedge funds. I just think at times like this, you know, if you go back to 2007-2008, Indiegogo and Kickstarter emerged from financial crisis as a class, as a way to get entrepreneurs going.

And now, today, with equity crowdfunding, it's a new class of financing with one thing that a venture capitalist can't do for you: it lets your customers of your product or service be investors in the same! Which is really, really interesting! And so I'm a supporter of all that. You can learn a lot more about it—it's just going to StartEngine.com!

But I think that whole chain, that whole shift to equity crowdfunding is one of the great things that have come out of the stress we've gone through in this latest pandemic-related financial crisis, if you want to call it that. The hundred dollars a week target—how did you get to that number? Like, why is that the magic number you're recommending for people?

Well again, Evan, I wanted to keep it simple! Everything's about simplicity. People can remember the name Beanstalks. They can remember a hundred dollars a week. They can remember, you know, thinking about getting over a million dollars by the time they retire! Very simple themes I think are what are needed here! I mean, you really—you make the average salary of 52 to 58 thousand a year in the U.S. You know, you think about the global market— that's one of the highest incomes in the world!

But still, that's the average—52 thousand! You can put aside a hundred dollars a week! There's something you're doing during the week. You don't need to save that crisp 100 and put it into your future! I mean, I found the reason I said 100 is I feel everybody can do it. I challenge my own kids to do it! You know, it means when your grandmother gives you a birthday gift and a card and, you know, maybe it's 50 bucks, 20 bucks, whatever it is—save it for yourself! That's the whole idea of Beanstalks!

Is there an age limit? Can I do this for my 11-year-old son? I think you have to wait till you're 18. It's kind of important! The minute you open a bank account, you should be doing this! That's the way I look at it!

So you could, I think you do a great gift to your child if you started talking to them about investing! And you know, when they open their own bank account, savings account, you link them up with a way to start investing! Remember, I keep saying saving is different than investing! When you save cash, you make a nominal interest rate, right now it's very, very, very low because rates are close to zero!

But when you invest, you're investing in America’s future! And it’s companies that create products and services that people buy! Everybody knows Apple, for example! Everybody knows Microsoft! Those are the kind of companies you may want to own because you use their products every day, and they pay dividends! And those are the kind of companies that we have inside of Beanstalk! So that's the kind of investing you'll be doing if you decide to put a hundred dollars or more aside a week and start building your portfolio.

What would you tell entrepreneurs? A lot of my audiences are entrepreneurs. Some of them have made and had a lot of success; a lot of them are in the early stage of just trying to figure things out, and they're pouring everything they have into their business. And they might be saying, "Kevin, I don't know! It's hard to think about the future when I'm trying to make my business fly." What advice would you tell them?

You know what advice I tell them? You can save a hundred dollars! Even if you're working 25 hours a week or a day. I mean, all my entrepreneurs work all day long! But I also encourage them, look, get some diversification in your own portfolio! You basically got all of your eggs in one basket: your business! But there's nothing wrong with just finding a hundred dollars you can save a week because everybody can, and put it aside and invest it in a broad range of companies that we have through those ETFs I talked about earlier that are completely different from the company that you're working on.

It's something that you're putting aside, regardless of the outcome of your entrepreneurial journey. As you know, Evan, sometimes it doesn't work out! Sometimes you have to try two or three times. But investing is long-term, and it puts aside something that you don't have in your business, which is very, very concentrated. It gives you something called diversity, and I like that a lot in investing.

Someone in the chat was asking they're in debt right now. Should they get out of debt first and then start this, or should they start right now? Well, there's different kinds of debt. If they're in credit card debt, they really should get rid of that first because they're paying somewhere between 18% and 21% interest, which is brutal! But you know, if it's a mortgage, that's different! If you have a mortgage, that's about your assets—your home! And I would say that you want to invest beside that as well.

You want to start diversifying! So I don’t—I think getting rid of credit card debt first, then investing in Beanstalks is a good idea! But if you're already in a mortgage, you have a car loan that you're already able to support, you should at the same time be putting a hundred bucks a week into your future in a diversified portfolio!

And for financial education for America, if you could make one change, if you were made president and you can come in and make one change across America for financial education, what would you recommend happening?

I would adopt what Florida’s doing right now! You know, I have a home in Miami, and I've gone to high schools in Florida and talked to teachers and principals there. They are making it mandatory within, you know, grade school and in high school—at least in high school—to actually have financial literacy! Learn about credit card debt, learn about investing, learn about the concepts of this in the curriculum! It's so important!

They are the leader! You think about the educational system in America—New York, Florida, Texas, and California—they're the majority of our schools! We have about 110,000 schools! Why do I know that? Because I used to sell them software for reading and math with the Learning Company, and I dealt with almost all of them!

But we at that time had nothing to do with financial literacy, and I regret that immensely! When I had that opportunity, when I was the largest purveyor of educational software in America, I should have got that going then! It's my mistake, and I'm trying to make up for lost time doing Beanstalks now!

That's crazy! How long have you been in the education business? I just realized that!

Yeah! Yeah, I mean, I know that's just an inside out, 110,000 buildings! The whole way it works! But Florida's done it right! They're really, really saying, "We can't go on any longer leaving people!" Many people only get a high school education! There's nothing wrong with some of the wealthiest people in America only graduating high school!

But we got to teach you! You have to understand what debt is and what investing is! We have to do that! Florida recognizes that! Hopefully, that will be adopted into New York, and then Texas, and California! And then when you get those states, as I learned in the days of the Learning Company, you get everybody else because they kind of follow one of those jurisdictions or another.

But that's the majority of schools in those four states! And I think, you know, getting out there with the Beanstalks message and getting people to try it and try investing is very important for me!

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