Confronting Kevin O’Leary | How He Spends $400 Million Dollars

By the end of the year, I'm writing off millions of dollars. That's a mistake. I make money selling potatoes with people's pictures on them. It's a huge hit. You're dead to me, and you are because I'm out.

What's up, you guys? It's Graham here. So, as some of you know, one of my favorite series out there is from CNBC Make It, called "Wait For It: Millennial Money." But there's a problem with Millennial Money in that it's only Millennials. So today we got our first ever episode of "Wait For It: Boomer Box" with none other than Kevin O'Leary from Shark Tank.

So I'm about to snap my fingers and he is going to appear right here next to me. So with that said, smash the like button and let's begin. Now, we're going to be flipping this around a little bit. We did a Millennial Money on me, but now we're going to be doing somewhat of a Millennial Money on you. Where would you say, first of all, you spend the most of your time living?

I have multiple homes around the world. I have one in Switzerland, one in Miami, one in Boston, one in Toronto, Canada. I try and have a home in any city I'm at for more than 60 days. So that's sort of how it works. So I have all my— I don't have to travel with stuff, and I prefer not to have mortgages on them. So I either rent or buy for cash, just so I don't have to worry about it.

So why did you start making YouTube videos? I mean, as you know, you've built a big franchise. I can help my Shark Tank companies with my YouTube channel. That was the idea, and I do now. Yeah, and so I started in earnest maybe eight months ago, and we had like 11,000, and now we have 270-something thousand. So I'm on my way to the million, and it's actually working.

You know, I do a lot of— I enjoy the community. One B, I always feature a Shark Tank company, and I'm totally transparent saying I invested in, you know, this company, and it's a great, as you know, feedback mechanism. You can try ideas and say, "What do you guys think?" and then read what they say, right? Because they're very transparent and honest, and maybe I do that deal, maybe I don't, you know, that kind of thing.

How many hours a day do you think you work? Ten hours a day. I get up before anybody else in my family, usually around 4:30, 5 o'clock, and I finish at 10 at night. And I take breaks, but you know, that's the one beef my wife has with me. You're always working. I see, yeah, but this is who I am. I mean, I really enjoy what I do.

And so, you know, but I work a lot. But don't ever think that you can just say, "Oh, you know, I'm now worth 50 million. I'm going to stop working." It never— doesn't work that way. Do you believe there's such a thing as work-life balance? No, no, I don't buy that.

And I tell my entrepreneurs, if you're going to take that life and you want to be an entrepreneur and build a company, there is no work-life balance. You sacrifice your personal life to pay for freedom later in life. When you're young and you're working, you know, 10, 12, 14 hours a day, you're giving up the soccer game if you have kids, you're giving up the picnic and all that stuff. But you're doing it so that when you're in your 50s and 60s, you choose to do whatever you like.

I retired for three years, and my mandate for that 36-month period was to visit every beach on Earth. Every beach. Every beach that was legendary, you know, in Cambodia, in Cyprus, in Tunisia. I hit them all. I got really bored.

Has it impacted your family and your relationships to have, I would say, work so much? I would say yes. I don’t think I have as close a relationship with my kids that I would have had, had I been a stay-at-home father, because I was gone all around the world during the Learning Company days. My big liquidity event was selling the Learning Company for 4.2 billion.

You know, I've done many deals since then, and nothing ever as big as that one because I don't wish to take that much risk anymore. Do you have any regrets, though, spending so much time working? Because I feel like I'm in a very similar spot where I love working.

I think you have a different issue now that you face in where you are in the continuum of life. You're not married, you don't have any kids, and so you have to decide if you're going to take that journey. I would argue it's worth taking. The regret I have is I wish I'd had kids earlier, but that was never going to happen because I was working so hard at that time.

The challenge you're going to have, and I say this to anybody in your situation, is when you get married, to whom do they understand who you are? Because if you don't have a partner that understands working 15 hours a day, you're going to get divorced.

What I learned about being in the wedding industry is 50% of marriages end within seven years, not for infidelity, financial, it's some— one side is outspending the other and doesn't respect how hard it is to make money. They break up because of financial stress. That's the reason.

So for your investments, do you invest in individual stocks or ETFs? 80% is ETFs, my own. I design the indexes, you know, shares. So OUSA is my largest holding, which is a very conservative— it selects the best companies in the S&P 500 that pay dividends. That's my biggest holding.

I have one called OGIG, which is OGIG, Inter Global Internet Giants. All— it's up 70% this year. It's all— it's not just the FANGs; it's the global internet giants. So JD.com, Wix.com, DocuSign, anything that has to do with the digitization of the economy globally, that's a big one for me.

Would you say you try to beat the market? No, I don’t try and beat the market; I try and preserve my capital. All my strategies are very conservative. So when you ask me the difference between Bean Stocks and all the other robo apps out there, Bean Stocks, in my view, is way more conservative, because it's the drawdowns.

When the market corrects 30%, I don't want to go down 30%. I don't want— I don't need to beat the market. What I care about is preserving my capital. Why dividends? Why not invest in growth stocks and sell off if you need to at a long-term capital gain? My expenses, my living expenses, come off that portfolio on a monthly basis because you can't really buy bonds anymore that make you 2.8%.

But you can buy stocks that get you around that on an annual basis. So that is sort of my investment strategy— own a basket. There's about 80 to 100 stocks in there that pay me a monthly distribution. And you know, if I want to travel, rent a car, whatever, that's what I use in cash.

How many income sources would you say you have right now? It's a great question; no one's ever asked me. Probably 30, yeah, 30 different, and they're all over the place. What would you say your biggest investments are? My financial services companies.

I've invested millions and millions and millions because they're very long-term. Yeah, and the reason I did Bean Stocks is I really wanted to reflect my investment philosophy; that was number one. And number two, I believe it's the simplest platform to work with if you've never invested before. There's nothing simpler than Bean Stocks, and that's really the market I'm going after.

What would you say your worst investment is? So I've had many. I've had many. What have you lost the most amount of money on? You think about startups. I just funded one last week for 200,000. Most of my startup deals are, you know, between 200 and a million.

So let's say I invest in 50 of them, which I have each year. Right now, actually, I had my first call. PwC does my accounting, and we go through the entire list, and they say, "That's non-performing, that's not performing." That's before— by the end of the year, I'm writing off millions of dollars. But every year, I get a monster winner too.

So I have 20% of my portfolio goes to zero each year, and so those are bad investments. They were mistakes, but because I invested in so many, I get a couple like Plated, which sold to Albertsons for 340 million dollars. Like, that was a huge win and paid for all the mistakes for years.

You don't have a lot of zeros in your book, but if you're going to be an investor and support entrepreneurs, you're going to make mistakes. So this year, I'll write off millions again. This is a tough year. Do you buy Starbucks? No. I have this— I have a problem paying a huge amount for a commodity that I know can be made for 18 cents. I just don't do it. It's just not in my DNA. I can't handle it; I hate wasting money.

I think it's bad karma. There's got to be a place, though, where you would consider yourself wasteful with money. There's got to be something. Well, there is. There is, and it's watches. However, it's not wasteful; the asset— you will never see this watch again. This watch is already— because there's so few of them in the world, this is an FP Journe Blue.

There are so few of them that it's appreciated in value a lot. The portfolio is worth way more than I paid for it, but I have too many of them. There are certain things that I just indulge in, but they're not valueless. When you drink that coffee, it's gone. This isn't gone; it's still here.

So, I— my mother taught me, you know, she used to say when she was a working girl, "I'm going to work for two years to buy a Chanel jacket." Most people would buy five jackets, lower quality maybe, and just throw them out. She wouldn't do that; she bought really, really high-end Chanel. She loved Chanel.

When she died, the women in my extended family went nuts for her wardrobe. I had to beat them off with a stick fighting for each of these classic pieces because she kept them in pristine condition. An old Chanel jacket is worth a fortune today, and that was Georgette's understanding of value— of buying things that have retained value.

And I say that to anybody— when you buy stuff that's consumable, that money's gone; it's ghost money. When you buy something like, you know, an FP Journe watch, even though I'll probably put it in my coffin when I die, but if I don't, it'll be worth to my son or my family a lot of money.

Yeah, this thing is appreciating in value. Do you feel comfortable talking about your income? My mother taught me something about net worth: never boast about money. There's a concept called karma, because if you do, you won't have any. So I believe her. Speaking of that, how much do you save every month, would you say?

You have a set amount, a percentage that you try to save every month? So everything I buy I ask myself, "Do I need this? Is this something I need?" Now, if I need more production equipment, I buy it. If I need a new TV studio, I buy it. My expenditures tend to be really big ones for things that I can make money off of. I don't buy a lot of frivolous crap.

I have a very basic outfit, you know, for Shark Tank. I have 25 of the same suits, 25 shirts, 25 black ties. But you would say then you save more than you would spend every month? By how much? Fifty percent? Sixty percent? Probably fifty percent. Okay, I don't think it's a good idea to spend all your income; it's a dumb idea.

What percentage, then, would you say is personal from that, and what percentage is business? Well, that's the thing: I own all my businesses, and so I think of it as all personal—just like I own 100% of O'Leary Productions. It has a massive portfolio of companies in it.

How many credit cards do you have? Probably 30. That's a great question. What would you say you use the most often? You know, I think that's a very interesting question; no one's ever asked me. Let's count; let's just count this. Let's just count. Let's see. One, two, three, four, five, six, seven, eight, nine.

So that's 21, and I pay off every single one every month. So my credit score must be amazing. What are your thoughts on mainstream media? Do you think it's going to become eventually obsolete compared with social media? The value of mainstream media is the brand they've built, and I think for a guy like you, who's obviously built a big platform on various social media platforms, start to think about the equity in your brand, because one bad posting can destroy you.

I'm very conscious now of who I work with; we vet everybody, including you. You came out great, but I was introduced to CNBC through you. That's why I think mainstream matters; the brand matters. Do you think you're ever going to be content with where you are? No, no, I'm never content. I'm going to be working till the day I die, and wherever I go after that, I'll be working there too.

So, I mean, I really enjoy what I do. I mean, that's the whole idea of being an entrepreneur is to be able to do the things that you really want to do. What is your advice for me? You're an advocate for financial literacy; you're an advocate for helping Millennials, you know, take the entrepreneurial journey. You're an advocate.

So how— your brand now, that you've got millions of followers, what you might want to consider is start doing advisory business. These companies have come to me and said, "Can we partner?" And I looked at and said, "Only if I become an investor," and it made sense. You could be doing that.

But also, are you working as hard on the other platforms as you are on YouTube? That's a mistake. I mean, why aren't you on LinkedIn? Why aren't you big on Instagram? Why aren't you doing stuff on Twitter? So, I mean, I don't think you're doing enough on social, actually, and you're concentrated— concentrated on one platform.

I tend to do one thing really well. I know, but I like thinking— one thing. You want criticism? It's going to be that you're not diversified enough, okay? And you're not diversified in your personal portfolio.

I mean, you want to be on the critical side— too much concentration on YouTube and not the other platforms. Everything else is pretty good, actually. You know, you’re doing well; you've got a great net worth for 30. Thanks.

So with that said, you guys, thank you so much for watching. I really appreciate it. As always, make sure to destroy the subscribe button and the notification bell. Also, feel free to add me on Instagram; I post pretty much daily. So if you want to be a part of it there, feel free to add me there, as on my second channel, The Graham Stephan Show.

I post there every single day. I'm not posting here, so if you want to see a brand new video from me every single day, make sure to add yourself to that. And lastly, if you want a totally free stock worth at minimum eight dollars and all the way up to one thousand six hundred dollars, Webull is going to give you that free stock when you deposit a hundred dollars on the platform. So let me know which free stock you get. Thank you so much for watching, and until next time.