‘Shark Tank’ Star Kevin O’Leary: Investing Is About ‘The Pursuit of Financial Freedom’
Written by
John Csiszar
Edited by
Gary Dudak
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Investor Kevin O’Leary, perhaps best known as “Mr. Wonderful” on the TV show “Shark Tank,” is popular with the financial press due to his colorful and direct quotes.
On Jan. 12, 2022, O’Leary posted a tweet that is still getting discussed. It read, “Becoming an investor has nothing to do with the greed of money. It’s all about the pursuit of personal freedom.”
While there is certainly plenty of greed to go around on Wall Street, it’s important to understand what O’Leary means at the personal finance level. By classifying investing as a path to freedom rather than a path to excess riches, O’Leary is making an essential point about how he views money, and he thinks you should as well. Here’s a deeper look at O’Leary’s philosophy and how you can use it to invest more successfully.
What Does O’Leary Mean by ‘Personal Freedom?’
Saving, investing and pursuing personal wealth is not an inherently greedy act in O’Leary’s view. With this tweet — and many others over the years — it’s clear that O’Leary is trying to get investors to save so they can taste the power of freedom that having money gives, not just so they can say they have a pile of money in the bank.
In 2018, O’Leary told CNBC that a key piece of advice he gives entrepreneurs is actually to not focus on money — but rather to focus on freedom. As O’Leary explained it, “I don’t need more money, I just want to do the things in my life that I want to do, and money allows me to do that.” O’Leary went on to say, “You don’t do entrepreneurship for the greed of money. Because what does it mean to be wealthy in America? [It means] you’re personally free. That’s what’s important.”
O’Leary gives a personal example from his own life to explain what he means by the personal freedom that money offers. As reported by CNBC, when O’Leary was young, he was passionate about photography, to the point that he wanted it to be his career. But as that would be a competitive industry to just jump into, he first went to business school on the advice of his father, and then pursued a career of entrepreneurship. In O’Leary’s words, that allowed him to come full circle. “I’ve gotten to do what I wanted to because I was successful in something else, and that’s the great thing about entrepreneurship — you can pursue your dreams,” O’Leary said.
How Does O’Leary Recommend You Invest?
O’Leary has long been a proponent of cash flow and dividends when it comes to investing. Regular viewers of “Shark Tank” understand that O’Leary constantly stresses getting returns of actual cash in his pocket as a cornerstone of his investment philosophy.
O’Leary puts his investment philosophy to the test through his series of four exchange-traded funds, with the first being the ALPS O’Shares U.S. Quality Dividend ETF (OUSA). Stocks in this fund are screened for volatility, return on assets, free cash flow and leverage. While individual investors may not have the research capabilities that O’Leary’s team does, he does offer investment suggestions that all investors can follow:
- Invest in companies that pay dividends.
- Invest in low-volatility companies.
- Invest no more than 5% into a single name.
- Invest in companies that have quality balance sheets.
On a more holistic basis, O’Leary also has three suggestions as to how investors can improve their lives as a whole:
- Keep money and emotions separate.
- Eliminate debt.
- Be grateful for what you have.
Keeping emotions out of investing is a way to avoid making irrational decisions, which inevitably cost money in the long run. Eliminating debt is a way to stop throwing money away to a bank or finance company when you could be using it to save and invest. Gratitude helps keep your life in balance and prevents you from trying to keep up with the Joneses.
Is O’Leary’s Approach Right for Everyone?
O’Leary is a self-made multi-millionaire with a track record of investment success, so it pays to at least listen to what he has to say. Aggressive investors may not be satisfied with his cash-oriented, diversified, low-volatility approach, but those looking to preserve capital while still earning a return — and regular cash payments — may find value in it.
Whichever way you approach investing, O’Leary’s point about money providing financial freedom is spot on. When you have money, you have the freedom to do what you want when you want to do it, and that’s the true value that most people are looking for in their investments. If you can follow O’Leary’s lead and think of your nest egg as a tool you can use to live life the way you want, rather than just a pile of money, it might even encourage you to save more aggressively.
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