"The ULTIMATE INVESTING ADVICE Everyone NEEDS TO HEAR!" | Kevin O'Leary

She invested in herself in something she really loved that appreciated in value. Innovation is disruption, and so whenever you have a Tesla or somebody that's trying to change the world, you're going to piss somebody off.

I don't want to work out today. I don't want to go for a walk. I don't want to start investing. There's always a reason not to do something, and it's your enemy.

It's always this: You talk about saving money and not spending any money, and that has to be part of your protocol, how you live your life. And you have to invest, not just save. I've talked about this dozens of times, but that means you can't buy anything. You're always taking a hundred bucks a week, which is what I say you should do, and investing it over the long period because the markets give you somewhere between a six and eight percent return over long periods of time.

Yes, they go up and down, but the whole idea I've been talking about is taking a portion of your salary. Let's say you only make 56,000 a year, the average salary, and you take a hundred bucks a week and you start investing it—not saving it in a savings account because that doesn't pay any interest anymore—but putting it into the stock market and letting it grow over 30, 40 years. If you do that and you have that discipline, you'll end up a millionaire in your 60s, where you really need to have some money to retire with, as much as a million and a half dollars.

So, I think that's a pretty pragmatic strategy. Where did I learn that? From my mother, Georgette.

But the question I'm always getting is, what about living? What about spending on things that you love? What about clothes? What about fashion? What about all the things that I want to buy? Do I have to just go Spartan? I can't buy any of that stuff? Not true. I want you to have a different mindset when you purchase things for yourself, and let me give it to you in a lesson that I learned from my own mother.

And I've told this story countless times. My mother, Georgette, was a working girl in her 20s. She worked at a factory owned by her father that made children's winter clothing. She would save 20 percent of her salary each week and invest it. But it's not all she did with it. She loved fashion too. She loved clothing; she liked to buy things for herself. But she had a different mindset about it. She told me years later—and this really changed the way I think about buying stuff—that she would save a whole year just to buy one jacket instead of buying a whole ton of cheap stuff that she would throw out a year later and maybe not even wear.

She would save up for one thing that she really wanted. She loved Chanel, so when it came to clothing, she loved Chanel jackets. They cost a fortune back then, but they were very high quality, and they look beautiful. Her thinking was they last forever in your wardrobe. Chanel never goes out of style.

Now, talking about style and talking about fashion in Georgette's mind was, it really is who you are. You're presenting yourself to the world, and you want to look good. You want to feel good about yourself.

The reason I tell you that story and why it's so powerful to me is, years later, when she passed away and I became the executive for her estate, I started getting phone calls from all the women in my extended family saying, "What happened to Georgette's Chanel jackets?" What do you mean, what happened to them? They're hanging up in the wardrobe.

"Well, I would like one of them." In fact, "I'd like them all." I began to realize that these jackets were classics. All the women were fighting over them. They all wanted the Chanel jackets. Why? They were worth more today than they were 30 years ago because they were one of a kind—in some cases, classic Chanels.

How brilliant Georgette was. How genius that was. She invested in herself in something she really loved that appreciated in value. That's what I'm talking about. I want you to start thinking that way.

Now, let's go back and listen to Ralph Lauren, a guy that understands style and investing. Listen to what he said years ago. You'll appreciate this. You get it right—he's talking about how you want to present yourself to the world.

So my whole theory about fashion is it's about you. It's how you want to present yourself. So you have two options: you can buy a whole bunch of crap you don't wear all the time—cheap clothing—a lot of people go that way, or you can start investing in pieces that are going to appreciate in style, that really mean something to you.

Now, I'm dressed up in a suit today, the one you see me in all the time. Why do I dress in this black suit? Well, it's my uniform. Years ago, a very savvy wardrobe director when we were shooting Shark Tank over 10 years ago said, "Kevin, you look good in a black suit, white shirt, black tie. Maybe a little classic Cuitramal like a tie pin. Make it a standard and you’ll never have to shoot outtakes." Because when you shoot Shark Tank and you change your outfit at the end of that shooting day, you have to do outtakes because those shows are put together, they're stitched together.

You might shoot one deal on a Tuesday and another deal on a Friday, and they end up in the same show. But if you change your clothing, it's harder for the editors, and you've got to do a lot more post-production work. By having the standard uniform I wear, I avoid all that wasted time. Great lesson for me, but it also became sort of my signature look in business: it's crisp; it's easy.

So, I invested in myself and my look. I have 25 of these jackets, 25 pants, 25 tapes, 25 black ties, 25 handmade shirts. It's an investment; it's not junk. It's very valuable to me. You should think about your clothing that way too. Think the way Georgette did: buy one thing you really love that you know you're going to wear.

But it's not just clothing, okay? I want to talk about another asset class. Let's take for example, watches. Everybody knows I collect watches. This is another situation where you can buy something for yourself, love it because you love the style of it, and then over time, during your life, it appreciates in value. Can it be material appreciation? Oh yeah.

Now, I'm wearing today a Rolex steel white face Daytona, an entry-level watch, not excessively expensive, but you know, a stylish piece from Rolex. Now I have many different brands, and I'm not endorsing Rolex one over another. I love Grand Seiko, I love Patek, I love Eddie More Piquet, I love all kinds—Mings, micro brands, Vacheron, you name it. I have these watches in my collection for a reason. I love to collect them, but I also am investing. I'm thinking long term.

Now how much are watches worth over time? I'm going to give you an extreme example. I want you to watch this video about a Daytona, which is why I wore this one today. Bought in the 70s for just around 400 bucks or under 500, anyways. And then what is it worth today? You might get a real kick out of this.

Now this is an extreme example, but I want to point out to you the idea of investing in yourself in pieces you love that can appreciate over time. I brought in a Rolex watch that I had purchased while I was in the military. I flew on Air America Airlines and Continental Airlines, and I noticed that most of the pilots that were flying those aircraft wore Rolex watches, and I was intrigued by them. I always wanted to purchase them, but they were very expensive.

Later, when I was transferred to another base, I did some scuba diving, and I knew that the Rolex watch was good for scuba diving. I found this particular watch where I could afford it, and I never used it. I looked at it and I said, "You know, this is really too nice to take down in salty water." I just kept it.

This particular model, being marked Oyster, is extremely, extremely rare. Basically, it's a new old stock watch, nowhere on it—the original foil sticker on the back of it. And the fact that we have all this complete documentation here also makes it maybe one of the very few in the whole world that still was never worn.

Your watch at auction today? 500 to 700 thousand dollars. Now, how crazy is that? 400 and change to 700,000 during a man's lifetime? Yes, it can happen. That's an extreme example, but my point is these watches appreciate. In fact, Paul Newman's—you heard reference to in that video—sold for 17.5 million. Your watch may not do that, but the point is over time, a beautiful timepiece that you love, that you invested in for yourself, goes up in value.

I'll give you another example: I love guitars. Now here's a guitar. This is a one-of-a-kind guitar. It was made for me by the guys at Benji Lock, one of my Shark Tank companies. It's a beautiful piece, EC 401, with this special paint—Mr. Wonderful screaming at you. I love that. But I also love to play it. Now, this is another excuse for me just to mess around, and I love doing it.

But I'm trying to make a point about another asset class: guitars. They're beautiful, they're fun, you can play them, you can learn how to play them. You know, just messing around.

But that's the whole idea. I love the guitar. Is this guitar going to be worth more 20 years from now? I think it will be. Now let me give you an example. Those of you that love guitars know what a Gibson Les Paul is. It's a classic guitar in rock and roll. You've seen it played by some of the biggest rockers of all time, designed by a guy named Les Paul.

Well, Les Paul recently passed away. He used to play at a jazz club called The Iridium in New York. I loved him, I loved all he did, and he was a Grammy winner as well—not only for music, but also for inventions around music, multi-track recorders, that kind of thing. Les Paul’s a legend for that.

I went to see him at The Iridium and I brought my Les Paul to ask Les Paul to sign my Les Paul, and he did. Here he is signing it. Now, what do you think that guitar is worth today? Not only do I still play it, I love to have it, but it's signed by Les.

To me, my whole point is to talk about investing in yourself and thinking wisely about how you spend your money. You don't have to be Spartan; you don't have to starve yourself from the joys of life. You have to think pragmatically: buy less stuff, but when you buy stuff, make it good stuff—make it investable stuff, whether it be a watch, whether it be a guitar, even something like a ballpoint pen.

Yeah, you can spend 29 cents on a pen and throw it away, or you can buy a collectible piece like this one—a Molé Blah. They only make so many of them, and over time they appreciate in value, and they're wonderful to have. This is a collectible. It's a design around Egyptian hieroglyphics; it's etched on the body of the pen.

Now you may say that's pretty stupid. I don't think so. It's stylish. I love to use it. It's functional, pragmatic, and it's appreciating in value. I gift pens to people in business—very rare pens, sometimes to celebrate a deal. They really appreciate it, and when they look back five years later when that pen has gone out of production, it's enhanced in value dramatically.

I want you to think that way. Buy less stuff, but buy good stuff that means something to you. That too, my friends, is investing in the future.

Hi, Kevin. My question is: What should I do with the 21,000 in my bank account? I'm only 20, and I have 21,000 because of a parent passing away when I was younger, and I was wondering if you had any thoughts on how I should invest it and grow it so that I have a nice size savings account after college. Also, what's your opinion on insurance? Investors, the rates vary, but you can't lose money. Thanks for your time, and have a great day.

Yeah, first of all, I'm very sad to hear about the passing of your parents at such a young age. That's sad. However, I think you're really thinking ahead. That's very smart. 20,000, 21,000—you want to put that to work. I prefer these days using ETFs—exchange-traded funds—and here's why.

These days, most online brokers will let you set up an account with no fees, which is fantastic because we really want to reduce our fees if we can. So you set up one of those, and then you wire in the 21,000. And if you're—you know, you're young, you're 21. So, generally speaking, the older you get, the more you want to put in more conservative investments like fixed income, like bonds, something like that, or these guaranteed certificates of deposit, which aren't great in my view because you're only making about 2 percent.

But that's not bad if you're just saving money. But you can get ETFs that are basically a basket of very short-term government bonds that yield about 1.9 to 2.1 percent. So the key is all of these services provide you with information about which ETFs to buy. I like ETFs. They're transparent, they're low fee, they're very liquid, you can buy and sell them.

So I would buy something like the SPY, which is the entire market—it's very inexpensive—you get the whole, you know, Standard and Poor's 500 stocks that make up the largest market cap companies in the world, basically. Then, maybe you get 50 in that, and then another, um, 40 in a couple of ETFs that are just short-duration government bonds and short-duration corporate credit—again, these are available.

And I always say ask an advisor because you're going to get one for free on these online services. You can just text them and they'll give you information. Say, "Look, I want to be sort of 50 in equities in expensive ETFs and maybe a 40 in short-duration government bonds and short-duration corporate debt investment grade—that's triple B—and then 10 cash. Most of these provide a cash account too, which has yield.

So then all the money is going to work. It'll be volatile; stocks will go up and down. But over time, because Emily, you're so young, I think you probably, you know, on average from the past, you're going to make six, seven percent a year on average on the equities and maybe two or three percent on the debt, and it'll grow, and it'll be ready for you when you retire.

And don't forget to add to it. You got to add to it—take 10 percent of your salary is what I always say. Thank you for that one. Let's go to our next question.

Thanks, Mr. Wonderful, for taking my question. The greatest technical innovations have usually been met with fierce opposition from large corporate competitive interests. Innovators like Nikola Tesla come to mind. What is your advice to innovators on how to confront or avoid similar opposition?

So, innovation is disruption. And so, whenever you have a Tesla or somebody that's trying to change the world—going all electric cars—you’re going to piss somebody off because maybe you're building gas-driven cars, or maybe you're already in an existing industry. Disruption is always met with resistance. That always happens.

But that's how we advance. I mean, it's really great when things keep moving forward. I think—I own a Tesla now. I was very skeptical. My son works at Tesla; he's an intern there, so he's beginning to learn his craft and he's very interested in how the future is going to look, as you sound like you are.

My advice to people that want to be mavericks is put your blinders on. Focus on what you want to achieve, and don't listen to all the noise. That noise is horrific, and just really, really bad, and it's always going to be eating at you. But you've got to stay focused on the goal.

I was taught that years ago by a mentor, and it's absolutely true: stay focused. Don't let distractors bother you; don't let them get you down. And invariably, you're going to be kicked to the ground as a maverick or an entrepreneur or anybody that's trying to achieve their own freedom. But you got to get up and keep going.

That's my advice. Great question though; I like that a lot. These are very thoughtful questions; it's terrific. Let's see what we got next.

Hello, Mr. Wonderful. My name is Justin, and I'm 26 years old. One year ago, I started a construction and development company with no loans or investors. So far, it's gone very well, and just in the last six months, we have had 1.5 million dollars in revenue with well over 200,000 in net profit after paying myself. We have incredible growth slotted for next year based on signed contracts.

My issue is I'm feeling guilty paying myself so early in the company life after hearing the sharks and other entrepreneurs' stories. I just want your opinion on when it is okay to start giving yourself a salary.

Thanks, Mr. Wonderful.

Justin, you're a rock star, my friend. Good for you. That's absolutely spectacular. That's what it takes—the guts to get out there and start. I'm really excited for you.

Now look, I got some advice here. Okay, number one, there's nothing wrong with paying yourself, particularly from what I'm listening to, you can afford it. But the key to that is you're taking it out of the company and investing it in something else—that's completely different.

That, Justin, is the concept of diversification. So you put it into an ETF, or you put it into the stock market, you put it into bonds, but it has nothing to do with your construction business. Because what you find in life is when you get too concentrated and you leave all the money in the business and something happens—and believe me, in life, people happen—you’re wiped out. You don’t want that to happen.

You're starting your diversification now. So let's say you pull out 50,000—basically have to live off it—but if you could keep 10 or 15 of what you're taking out and invest it in something completely different, like a portfolio of stocks and bonds, that's how you get wealthy long term.

But I love that entrepreneurial spirit. You are a rock star—absolutely fantastic. Clearly, you're very focused on what you're doing, and many others can learn from what Justin just said. I mean, he's focused on business and he did it without anybody else's cash—100 percent of your business? Spectacular! You know, it makes me feel great to hear that kind of thing.

And for all of the others of you listening, you got to be a Justin. If you really have that entrepreneurial spirit in your heart, you go and become a Justin. Absolutely great! I love that one. Thank you, Justin. Terrific.

[Music]

A brief musical interlude. Get much. I hope you get what you need with Mr. Wonderful, because I'm answering questions. Let’s go to Gavin here.

Hey, Mr. Wonderful. I'm 16 years old, and I'm an aspiring entrepreneur, and I think I have a good idea for a tech startup. But the problem is that I don't know how to code. I'm afraid that the need to hire developers will push away all potential investors. Should I take the time to learn code over the next couple of years, or should I go ahead and start anyways? Thank you. Any response would be appreciated.

Gavin, you don't have to be a coder to be an entrepreneur. The key is you've got to find coders that are going to work with you and for you. You're doing a startup—find a great coder. Because look, it's an extreme talent. You know, if you're good at coding, you're good at coding. If you're good as an entrepreneur, good as a manager, you're good at that. That sounds like what you are.

So you have a vision for a business—find a great coder to lead the team, and you give that person, that man or woman, some equity. They become effectively your partner if they have a belief in your vision. That's how all the great companies were started.

That's how Steve Jobs started Apple. Think about it—he found a fantastic engineer and worked with them. The two of them built that business to the largest company on Earth today. Look, there's nothing wrong with not being a coder, and you're probably not going to be able to. It's kind of like a, you know, something you were born with. You really have to have an unusual mind to be a great coder. That's what I've learned.

But I've hired hundreds of coders in my day at The Learning Company. We used to create software. I was a marketing person and I had to have coders to make Breeder Rabbits, Carmen San Diego's, and products like that. You have to understand what you're good at and focus on that. And I think it sounds like you're going to be terrific as a manager.

I want to talk about everybody's future. The scariest thing for me for anybody is to end up at the age of 65 with nothing in the bank. In other words, no investment strategy, no retirement fund, nothing. And you know the truth is, not everybody knows how to build a long-term diversified portfolio, and I totally get that.

You know, I was really stunned during the whole pandemic thing in March and April when I found out when we did the whole PPP payroll loan thing how many of the people in my organization, my employees and other supply chain entities that I work with—you know, all those people in their 20s and 30s—nothing put aside for the future. That is scary!

So let's talk about that because I don't want that to be you. You know at the end of the day you've really got to think about your future because I think no one else is going to do it for you. Everybody loves to procrastinate.

I don't want to work out today. I don't want to go for a walk. I don't want to start investing. There's always a reason not to do something, and it's your enemy. When it comes to investing, you really want to get over that quickly because you need the time value of money to be on your side.

So don't procrastinate. Start investing! Find a way to get discipline, put some aside every week, and let it grow for you. You're not doing it for somebody else; you're doing it for you. So when you end up in your 60s, you have something set aside.

When people say, "When should I start investing?" My answer is always the same—now. Now is the time! Why? Because it takes time—usually many, many years—for investments to grow and to build your wealth. So you've got to have a long-term strategy.

Investing can feel really overwhelming, especially when it's your first time. If you've never done this before, it can be scary. Ideally, you would have started yesterday, but there's no point in dwelling on the past. Let's get started today.

The most important step in the process is to make a commitment to yourself and your own future. More than a hundred million Americans don't have any investment accounts. That's crazy! That's one-third of the population doing nothing for retirement, doing nothing to grow their wealth—a huge problem.

You don't want to be one of them. If you start now, you can give your investments more time and really start to grow your money. Think about this: If you invest a hundred dollars a week every week—not just saving, but investing—assuming markets generate growth similar to the past 30, 40 years, which has been roughly around 8 percent, and you invested in a diversified portfolio and reinvested your dividends, you could have a million and a half bucks in the bank in 40 years with just a hundred dollars a week.

Is that too hard to do? The longer you wait, the less you will have in retirement. So it's best you get started right now.

Let's talk about the challenge of doing it—it's easier than it's ever been before. Why? Because a lot of technology exists to help you out. It's easier than before because you don't need to know a lot about investing to be an investor.

Too many people seem afraid to invest because they don't feel like experts. That's why I decided to create Beanstalk—to create an app that does almost all the investing for you, all of it, using your phone. And the Beanstalk application, it's really, really easy, and it costs only five dollars a month.

Now here's how it works: Step one, download Beanstalk onto your phone or click on the first link in the description below to get started. Step two, in the app, you'll answer some basic questions about your financial goals and risk tolerance levels and how much you'd like to invest to start and how much automatically each week or each month you want to set up.

The app will then let you connect your bank account—it's safe and secure—and then confirm how much you want to invest today. The minimum amount is a hundred dollars, and you decide after that how much you want to set up as an automatic recurring investment.

Although there's no minimum for the recurring investment, I recommend you take it seriously and commit a recurring investment. Remember, it's for you; it's your future. Step four, once you've done steps one, two, and three and approved the proposed portfolio for you, you're all set.

You can now let the investing happen. Once your money gets deposited, we invest it for you in a diversified portfolio that's right for you based on your profile. I have a team of experienced investment professionals that carefully craft and monitor the portfolios. They work hard on this so you don't have to.

They're the experts, and as the investments earn dividend income, the cash is also invested for you. That's what it's all about long term; that's great. So there's really no excuse for not starting today. You don't need to know a lot about investing to be an investor.

All you need is a phone, the Beanstalk app, and a bank account. That's what you need—a phone, the app, and a bank account. Download Beanstalk, B-E-A-N-S-T-O-X. It's all in the app stores. I mean how easy is that?

So you might ask: Why start now after the market's gone up? Here's what I tell them, and I've learned this the hard way: You can't time the market. Sometimes the entire year's return comes in just a few days, and if you're not invested in those days, you miss out. You have to get used to volatility—the market going up and down—but don't try and time it. Nobody gets that right.

Remember when the pandemic started? People panicked and markets dropped. Some people thought their investments were doomed. But what actually happened? The market came back, as they've done after every major drop in history. Am I predicting what will happen tomorrow? No, absolutely not! Why? Because nobody knows. I don't have a crystal ball, and neither do other investors and financial advisors out there.

The most important thing to remember is that investing is a long-term game. When I started putting money in the markets, I'd obsessively check my portfolio every hour until the closing bell rang. What a waste of time, energy, insanity! If you want your money to grow, you have to be in the markets consistently over time.

Volatility, corrections, and bear markets are all to be expected. If you look back at historical market data over the past few decades, you'll see that the line isn't straight, but overall, it does trend upwards.

Investments in health care have done really well in recent months, but high investment returns for some securities have been on just a couple of trading days. The key here is patience is a virtue in the investing world. You're not getting any younger. Let's face it.

Do I really need to start investing now? You might ask yourself. Can I wait a year until I make more money? Your 20s and 30s are prime earning years. Make the most out of them and the money you're bringing in now so you can enjoy your life later.

It's going to be a lot harder to put in extra hours at the office or start a side gig when you're my age, and you don't want to have to do that. You want a long-term plan. We're talking about it right now—prioritize your finances when you're young, and you'll get ahead of the game.

Why is this important? Let's talk about it: savings versus investing and the time value of money. If you start putting away a hundred dollars a week, as we talked about earlier, and you just saved that money in your bank account, assuming historical simple savings rates, in forty years you will have accumulated approximately two hundred and eight thousand dollars.

Now let's talk about investing that money. That sounds like a lot, but if you invest that money, and those are invested in the markets where the gains are eight percent a year, have been historically an annualized return of eight percent, think about this: in forty years, you will have accumulated over a million and a half bucks.

That's why it's important to start now—put your money to work for you. So when it comes to long-term planning, now is the time to do it.

I hope you've enjoyed this fireside chat today because I'm hoping it gets you past procrastinating, and you start thinking about yourself and your own future. And you find the discipline to put at least a hundred dollars a week aside. You know you can do it; you really can.

There's something you don't need to buy. Instead of buying it, invest in yourself. Invest in yourself for the long term. If you liked that video, wait till you see my next one. Don't forget to click right over here and subscribe.