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Here's How Kevin O'Leary Really Invests Most of His Money

By Matthew Frankel, CFP® - Jan 6, 2021 at 6:17AM

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We've only seen the venture investing side of the "Shark Tank" star.

Most people know Kevin O'Leary as a venture capital investor from the popular TV show Shark Tank. But investing in start-ups isn't where most of his money actually gets invested.

We recently had the chance to sit down with Mr. Wonderful himself to find out how he actually invests his money. In this Dec. 21, 2020 Fool Live video clip, contributor Matt Frankel, CFP, and host Jason Moser ask O'Leary about his new investment app, Beanstox, which is based on his own capital allocation style. 

Matt Frankel: We've all seen the public side of your investment strategy on Shark Tank, which it sounds like that's a lot different than how you actually invest your own money. When you first scheduled the show, the number one question people wanted me to ask you is, how do you invest your own money that we don't see on TV? You said Beanstox is loosely modeled around your own investment style. So how do you invest your own money?

Kevin O'Leary: It's actually very much focused around my investment style. In fact, I couldn't find an app that invested the way I did so I got involved in Beanstox. When I was young, my mother taught me something very important about the concept of diversification. As a young working woman, she worked for a company that made children's winter clothing. She used to take 20 percent of her salary and put it into a diversified portfolio primarily of dividend paying large cap stocks and the other half was in Telco bonds. For some reason she was fixated on Telco bonds. In that era they were yielding five and six percent, five-year duration. When she passed away, I'm the older brother, I became the executive for her wealth, she kept this little account secret from both of her husbands her whole life, she was married twice. The executor called me up and said, "You've got to come down here, your mother has died a very wealthy woman." I went down there I looked at the portfolio and I called my brother, you are not going to believe this.

Jason Moser: [laughs]

O'Leary: I mean, she had this concept of setting something aside which became the core of my own investment philosophy. So people ask me, where is my real money? I love Shark Tank, but that's venture investing. It's very, very risky. That's not where my real money is, my real money is invested in a very conservative portfolio of ETFs that focus on large-cap, mid-cap, small-cap, tech, growth, and dividends. That's what I do and that's why Beanstox does the same thing. It's meant to be conservative, it's meant to preserve capital, and it's meant to provide diversification. I live off those trusts and so do my whole family and the charities we support, because they are designed to protect that wealth and we distribute six percent. You can decide what you want to take out, but you don't do that now, not in your 20s, you wait until you retire.

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