Founder's Story - How to Make Your First Million Dollars with Kevin O'Leary | Special Bonus Episode

Episode Date: July 31, 2024

A SPECIAL BONUS EPISODE FROM "Making It With Jon Davids" iTunes: Jon (JonDavids.com) sits down with Kevin O'Leary — aka Mr. Wonderful. He's chairman of O'Leary Ventures and sits in the center chair on Shark Tank. Jon and Kevin cover a wide range of topics including personal and career growth and just how much "Mr. Wonderful" really makes.Check out Founder's Story on the iHeart Radio App or iHeart.comOur Sponsors:* Check out PrizePicks and use my code FOUNDERS for a great deal: www.prizepicks.com* Check out Rosetta Stone and use my code TODAY for a great deal: www.rosettastone.comAdvertising Inquiries: https://redcircle.com/brandsPrivacy & Opt-Out: https://redcircle.com/privacy

What's up, guys? John Davids here, and on today's show, I am talking with Kevin O'Leary, Mr. Wonderful from Shark Tank. Y'all know Kevin, so no introduction needed, but what I will say is this is episode 138 of the Making It podcast, and all the way back, before I even recorded one episode, I made a list of all the guests that I'd want to have on this podcast, and at the top of that list was Mr. Wonderful himself, so I am so glad to bring you my conversation with Kevin O'Leary today, and it's such a fun conversation. We get into entrepreneurship. We get into personal branding. How much money does Kevin actually make off the Mr. Wonderful brand? We talk business building, money making, and a lot more. You guys are going to love this episode.

That's coming up in just a sec. Before we get to it, if you're new here, my name's John Davids. I am the author of this bestseller right here, Marketing Superpowers. Build a brand so good that getting customers feels like magic. If you want to grow your business, make sure you pick up a copy. Your Audible, your Kindle, your Amazon. You can get a free sample at marketingsuperpowersbook.com. Go there, download a free chapter.

And of course, follow me across social. John Davids, I am everywhere. And now let's get to my conversation with Kevin O'Leary. You're listening to Making It with John Davids. Kevin, welcome to the show. So my first question, how did you make your first million? It's a great question, but the truth is you don't actually notice making your first million? It's a great question. But the truth is, you don't actually notice making your first million when you're so myopically focused on your business. It was my first company was soft key software products, and it turned into a learning company.

You know, it was a classic startup in a basement with a few people. And then it ended up being the largest educational software and reference publisher in the world. And we sold it for about $4.2 billion way back in 1990. And I remember the next day coming into the office and realizing, you know, I never thought about the money. And I've talked to many entrepreneurs about this. I didn't think about that. But the next day, I said, shit, I'm really rich. And I have a lot of cash.

What am I going to do here? It was my first multiple millions. And it happened all at once. And that's pretty well how it happens to entrepreneurs that because you actually start a business and all you're doing is pursuing money, you'll never succeed. You have to be so passionate about what you're doing that you're willing to work 25 hours a day, eight days a week, compete globally. And then one day, it just happens. And it's a derivative of the pursuit of freedom. That's what it is. You're doing it to set yourself free to pursue the things you love. Along the way, sometimes that becomes very lucrative financially, but it was never about the money. It was about being personally free to pursue what I wanted to.

But do you remember the moment where you checked your checking account one day and there's $4,000 and the next day there's $3.5 million? It was more than that. I do remember it. It was in Boston. And I wasn't the only one. There was nine of us, I think, that were still there as founders. All I remember is what am I going to do tomorrow morning? And so I did try retirement for a few years. It was really boring. I went to every beach on earth.

I went everywhere. And I just needed to get back in the game. How old were you when that happened, when that sale happened? I think I was like 34, something like that. It's a great time in life to realize that you can start a new chapter. Yeah, but you're so in the middle of your career. I mean, what do you do? I mean, do you really want... I love competing. I like being in the race. It sort of transitioned me from being an operator in a business to more of an investor. That's really what the transition was because then I started to do many, many deals and some of which were very successful and others that failed. But that's the nature of what venture investing is.

So I heard a crazy story. You tell me if this is true, but you were like really early to personal branding before the term personal brand exists. I heard a story that you called up the head of a television channel and said, you should give me a show or something like that. Did that happen? It was like that. I'll never forget how it occurred. I was working right after the sale of actually what happened was one of our largest shareholders was one of the private equity firms in Boston. And they said to me, Hey, listen, while you're deciding what you're going to do next, why don't you work with us to vet deals? And at the time, one of the hot deals was cable going digital, going over the top, going online, and you had to buy the license. And so he said to me, look,

why don't you go and buy up these licenses? And I said, okay, I'm interested in that. I'm kind of interested in media. Because we were doing multimedia at the learning company. We were one of the first to bring out interactive reading, read a rabbit and all that. It was all done with video. Because I originally started, my first business was a cameraman, soundman, editor. I mean, it was like a full circle. I was back to media.

So there I was. And I remember that night after the first options, I got called on to a television show. And just to talk about it with Janice Mackey Frere, who's gone on to become a very, very famous reporter for NBC, I think all around the world. I met her that night. And we got into a huge argument on TV, like just a huge argument. And I didn't even think about the cameras. I was just getting into it with her. And the phones were lighting up. And the producer came and said, wow, can you come back tomorrow? You were back for cable. Yeah, that was it. It was the beginning i jack was his name i'm trying

to remember his second name great guy and he just said listen that was crazy and you got to do it again jack fleishman jack fleishman jack fleishman what a great guy he was my mentor on television from that very first janice Mackey frayer, whatever that was, to where I am today. And I always think about Jack. What would Jack do? And Jack basically said to me, if you're going to do this, you got to be honest. You were just so brutally honest.

You didn't sugarcoat anything. And I said, I believe everything I said. And by the way, I was right. And he said, I don't know if you're right, but you certainly believed you were. And so that's how it's been for me. I don't care about what people think about me as long as I'm telling the truth. That's what I care about. And I saw you, I remember seeing you on CNBC talking to Joe Kernan and this was all back in the nineties. So you, you were sort of a natural television animal. Like you, you sort of a natural television animal,

like you sort of got the medium. Was that completely natural? Or did you have media training? How did that actually start? No, no, I, Jack said to me, Listen, Kevin, can you answer three questions in 60 seconds? That's what you have to be able to do. If you're going to understand this medium television, this would be for social to do if you're going to understand this medium television this would be for social media if you're going to go on live tv you have to articulate the opportunity 20 30 40 seconds that's it that's all you've got that was the best advice he ever gave me that's sort of what worked and i started doing that and i started working with chase producers on all the networks all the cable operators, long before YouTube or anything. And I think that was a very good training ground for me because I had to get up at four in

the morning to work on Squawk Box or whatever it was at MSNBC or FNN or CNN, FN or whatever. There were so many different outlets that were springing up and I was hitting them all. I was everywhere. And that was sort of in New York and I was learning. I was just learning how that worked. And then things started to change. You know, it just sort of, I will always remember this moment, Boston Logan Airport, but it was really tied to the first season or second season of Shark Tank. I was working in London, England, and I got a call from Mark Burnett to show up in California the next morning at Shutter's, which is a restaurant in Santa Monica. He said, I got a new show I'm working on called Shark Tank. It's a format that you know from England and Canada

called Dragon's Den, and we're looking for a real asshole, and you're it. I said, listen, I don't get it. He said, no, no, don't change. Tomorrow when we shoot the pilot, just be the guy I've seen on TV. I just want that guy. And I said, well, that is the guy. That's who I am. And we never looked back.

Hey, everyone. I'm not sure if you've heard, but our show Founders Story is now available on the iHeartRadio app. So check that out. iHeartRadio online or you grab the app. It's super easy. You can listen to all of our episodes wherever you enjoy your podcast, whether that's iHeartRadio, iHeartRadio app, Apple Podcasts, Spotify, and many more, but check it out. And so that thing took off and I had never been recognized anywhere. And I was in Boston, Logan with my daughter and my wife and we're boarding a flight and I went to the washroom. He was on my right, you know, you're standing at the urinal. He kept looking at me, kept looking at me. I'll never forget this. And he finally said, are you that guy on Shark Tank? And I said, yeah, I am that guy on

Shark Tank. Like no one had ever recognized me or ever said anything about Shark Tank to me. Because in the early years, nobody was watching it. A cat and a dog were watching it. He said, last night, you really screwed over some young entrepreneur. You took 51% of his business on his first round of financing. That's totally unfair. And I said, wait a minute. It's my money. I'll do whatever I want. And we got into this big narrative in the can. And I said, gee, a lot of deals get done in toilets, but not today. I'm going to thank you for your input, but I don't care. And then he walks outside and says to my wife, Linda, that asshole, Kevin O'Leary from Shark

Tanks in the can. And she says, I know. I have no idea you know it was just a random outcome that was the beginning of whatever celebrity is and and that was years after because you were obviously up in canada on on shows i mean i remember seeing you on squeeze play back in whatever i was i love that show the mandol Yes, I really learned my chops. She was tough. She was tough. She was very tough. She was nasty and tough and smart as hell. There was no going in hungover onto that show. I can tell you that. And so at what point did it click for you? Going sort of fast forwarding to the whole personal brand as we know it today, at what point did it click, okay, this is actually a business in itself? Kevin O'Leary as Mr. Wonderful is a business just like the learning company was a business.

It started when people started calling me to ask me to come and speak all around the world, saying, look, we want Mr. Wonderful in Abu Dhabi, London, England, in New York, in San Francisco. I was just getting, Nancy and I just got together at that time and she was starting to run brand for me. And that turned into a multimillion dollar business. I just said, wow, what is this? And it was a huge business. And then the television commercials came and then the advisory businesses came and then the agents came and it grew from there.

And we've started with this small group of people and it grew into a franchise, I guess. I mean, we entertain all kinds of products and services now, but I have one basic rule. You know, you pitch me on a wine or something or a product. If I don't use it, I'm never going to endorse it. If I don't actually eat the cooking, I'm going to say 100% tell the truth. I use this product because it solves a problem. And I'm eating this cooking because I like it. And that's really worked.

My mother said something to me years ago when I was like 15 years old, maybe 16. If you always tell the truth, you'll never have to remember what you said. She's right. That works across the whole platform. I just tell the truth. Now, does that make people unhappy? Oh, yeah. Yes, it does. Let me just, I happen to have an award here. I'm so proud of. This is the most hated man on television award. Yeah, we got Emmys, but I like this one. This is the most hated guy on TV.

I love this. I love this. Treasure it. Yeah, I have it. I love that a lot. So what is the Mr. Wonderful? I'm curious about that. So you said it started off as just speaking gigs and it's a full on, like, do you have a P&L?

Do you have an operating team? Do you have sales targets? How rigorously do you run it? Or is it really just more opportunistic? No, no, no. It's a multi-million dollar business today. It's got relationships with agencies, television, broadcast networks. I'm very proud of it. It employs a lot of people. It has P&Ls. It makes money and it's global. We have offices in Abu Dhabi. We do business all around the world. And we're involved in all kinds of different asset classes. We build data centers.

We do real estate, indexing, S&P 500. I mean, there's just a whole plethora of businesses that are basically built around this guy, Mr. Wonderful, that people know. Here's what I'd say to people. What is this brand? You don't have to like me. I only ask that you like me. I only ask that you respect me. I don't care if you like me or not. Do you respect me? That's it. Because I'm

going to tell you the truth. You may not like it. I'm just going to tell you what everybody else is thinking. I don't care that you're having a hard time with it because it's still the truth. It'll be the truth tomorrow. It'll be the truth the week afterwards. It's still the truth it'll be the truth tomorrow be the truth the week afterwards it's still the truth somebody's got to tell you the truth that's what it is i would say that 50 of the people just don't like that and would rather you know this is the argument i have with lori and barbara in the context of shark tank lori on my left barbara on my right i've worked with those women for 15 16 years i have a lot of respect for both of them. But what I can't stand is when I know they're not going to do the deal. I know right away they're not going to do the deal. Of course, I know they're not going to do the deal.

I've known them for 16 years. But they'll say, well, I'm not going to do this deal. But you keep going. You keep bankrupting your parents. You keep mortgaging your house. You go. You keep going. When I say your business is a piece mortgaging your house. You go. You keep going. When I say your business is a piece of shit, it's going to zero and you should stop doing

it right now and do something else. We fight about that all the time. And the only reason Barbara gets to Shark Tank every year is I buy her a new broom. You, and I will say this genuinely, you do say things like I talked to, you know, lots of friends watch shark tank and they will say things like, wow, that Kevin's an asshole. But I actually have rarely seen you been wrong. I could disagree with your opinion. Maybe I like this. You don't like this, but you're, I believe that it comes from a place of truth. Yeah. Why would I lie? I would feel guilty about telling somebody to go on. I

say, listen, Laurie, you shouldn't be able to sleep at night after what you did to that person. Shame on you. Shame on you. You gave them hope where there's none. I mean, these are the narratives we have after, you know, these deals walk out of the room. I just that's the way I operate. I want to walk. I want to go to bed at night and feel that I told the truth to everybody I dealt with. So let me ask you this. What separates the people who are successful versus those who are very successful? Here's what I mean. You could build a business, and let's just say you're a moderately talented entrepreneur.

You could build a business doing a million bucks or maybe two million bucks. And then there are businesses that get to 10 or 20 million or even, you know, 100 million plus. Is that a difference in people, a difference in opportunity, a difference in luck? You've seen so many businesses. What separates them? One thing, the ability of that entrepreneur to distinguish the signal from the noise. And when I say that, I mean on a very simple basis. In today's world, when you start a business or you're running a business or you're managing a business or you're an investor, I don't care what you do, 90% of what's coming at

you all day long and all night long is noise. 10% is the signal. It's what you have to execute on. The best analogy of this is, you know, great ideas are a dime a dozen. Executional skills are impossible. So if you have the ability, and my greatest competitive advantage is the ability to look at somebody and in a few minutes determine whether they have that innate ability to separate the signal from the noise. And when they can, they can be wildly successful. And, you know, it's sort of saying, okay, you're running a business. You've got to achieve

three things today. You're going to get phone calls and texts and people are going to call you about stuff. But if that's not on mandate for you, if that's not one of the three things you've got to get done, it's noise. And you can't even let one ounce of energy be spent towards that until you finish dealing with the signal. Now, if you understand what I'm talking about, you get it. If you don't, I do not want to invest in you because you are going to fail and live a life of mediocrity. I get it loud and clear.

And I've seen it also on Shark Tank where people will come in and they'll start talking about a whole lot of sizzle. And it's like, what are the two or three numbers that matter? And they never get to it. And that must be so frustrating because you know exactly what that signal is. And they're just going on about the noise. They are. But sometimes they can't help themselves. The thing about Shark Tank that people don't realize, we don't see those deals before they come in. They're hidden from us as they have to be by law. And they practice 100 times in front of a mirror. But it's different than walking out on that carpet with 20 plus cameras running, you know, a billion dollars sitting in front of you,

an opportunity to start your business. And there you are on that carpet alone. That's your moment. Not everybody can handle it. Is there a deal that you passed on that you look back on and say, maybe I should have done it or an entrepreneur that you kind of gave up on too quick? You know, it's a great question and often asked of me. And I say, I don't cry over spilt milk.

I don't get every deal. I don't get it right every time. And what I've learned, and this is really, I think, important if you want to do this, if you want to support entrepreneurship. This year, I'm in the middle of the season. I've already done, I don't know how many deals. Let's say I do 11, 12. And I think I've got four that are absolute winners. And in the next four to five years, I'm going to get 100X on them. That never happens. Never. It's always that long shot deal that I just did because I thought, okay, she's great or he's great.

And I'm just going to take a flyer and do 250 or half a million bucks. It ends up being 1000X. I just didn't see it coming. And nobody did. Or maybe it was serendipitous. Or maybe that something changed in the market. But it's the ones you don't see coming that give And nobody did. Or maybe it was serendipitous, or maybe that something changed in the market. But it's the ones you don't see coming that give you all of your returns. And it's the ones that you think are surefire winners that end up being dogs. And that's why you need

to be diversified. You need diversification in a huge way. And you've got to do multiple deals because you just don't know. And anybody that says, oh, I'm really good at picking these things, particularly in venture investing, is full of shit. It's the power law. It's always going to be in the law of the numbers. And the one, as you said, the one that you think is going to hit, it probably is not going to hit. In fact, that's what happens. And I would say over 16 years, almost 70% of the winners have come from companies run by women, which has been another interesting attribute. They don't even know each other. And they're in almost all 11 sectors of the S&P in almost every state. So I mean, I love that adage. You want something done,

give it to a busy mother. Right now, look at Sarah Poo at BlueLand. She's just killing it. When she exits that deal, it's going to be the highest IRR in Shark Tank history. And who knew? She was crystallizing cleaning fluids. The most boring idea I've ever heard. The thing's on fire because people don't like plastics anymore. Quick break so I can tell you about my new book, Marketing Superpowers. Build a brand so good that getting customers feels like magic. You know, I have spent over a decade working with over 20,000 influencers, Instagrammers, YouTubers, celebrities,

seeing how they connect with audiences, seeing how they build their own personal brands, and kind of dissecting exactly how it works. And then a lot of these people wind up launching businesses, and they do so well. How are they able to do it? Is it just because they're famous? No, there's a lot more to it than that. I have dissected it. I have analyzed it. I have put it in a book for you called Marketing Superpowers available right now at marketingsuperpowersbook.com. Now, this is not a book about becoming an influencer. It's about the influencer playbook and how they launch brands, building a community, building a movement, building a connection with your customer like no other.

Get it all at marketingsuperpowersbook.com. You can also get a free chapter there and tons of bonus content when you buy the book. Available for e-book, audio, and of course, get your physical copy, Marketing Superpowers. Get your copy right now at marketingsuperpowersbook.com. If you were starting a business today, obviously you're very busy, you got a lot going on, but if you were 20, 25 years old, 20 years old, you were starting a business, where would you look? I've really come to the conclusion that what makes a business successful over the last five years is our people. And this is a remarkable change in my life.

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Redeem your 50% off rosettastone.com. Use my code today for a great deal. You do them and give them anything. Thinking because the facts have changed. So it's a very good question, but here's the answer. If you had asked me five years ago, and I teach in colleges, Harvard, MIT, Waterloo, McGill, all these places. I used to say, look, here you are investing your own money or borrowing money to pursue an education. You should think of three different careers. Number one, engineering. Number two, engineering. Number three, engineering. And at night, you should take some engineering classes. Everything else is a waste of time. I don't believe that anymore.

And I'll tell you why. If I look across my portfolio, my global portfolio, even what we're doing right now, talking together, my number one increase in costs is social media and customer acquisition. Artists, storytellers, videographers, photographers, editors, animators, I used to pay them 20 grand a year. Now I have to pay some of them half a million because they are the key to the new digital economy. So if you're a creator and you can create and storytell, you're incredibly valuable today. What a reverse of just what I used to think. So now when I look at managers, when I meet new people that I, and I was just talking to Nancy about this yesterday. I said, make sure the next person who comes on the team has got the ability to be a writer. I want the yin and yang, the chaos of art versus the discipline, the black and white of business. I want to see someone that

dances on the weekend or plays guitar or paints or does photography. Someone that can show me they're balanced in their mind to solve business problems creatively and chaotically from the arts. This is really important. I don't want somebody working 25 hours a day. That's useless. I want somebody that's able to solve problems and tell stories and create an environment where we can acquire customers on an economic basis and hold on to them. So CAC and ROAS, customer acquisition costs, and ROAS, return on ad spend. I spend millions of dollars every week on advertising. I need talent there.

So you ask me what the great career is, is binding in any discipline, the arts, the chaos of art, with the discipline of business, which is binary, black and white, either you make money or you lose money. Putting those together, that's the future. business people in general is once you have the audience, once you've figured out a way to hijack the attention, selling them the product, assuming you have a half-decent product, that's almost the easy part, which is a big difference from, as you said years ago, it was like, how do we create the greatest invention? The problem now is that anybody can create an invention with AI and all the technology that's around today. Yeah, and that's true. That's why customer acquisition has become even more important. The first thing I look at on a new deal is, tell me who's running social media for you.

Show me your CAC and ROAS metrics over the last 12 months. And I'm really good at analyzing that. I've got a great team. I mean, that's the whole deal. I mean, the competitive advantage I have is I have millions of followers. So when I buy into a business, I start promoting it. I start spending on unpaid social on my own platform. I say, look, here's a company I bought, product to service. I'm a major shareholder in it. I bought it because here's what it does.

And I put that out on my own platforms. It's sort of a weird transition that's occurred to me. I work with all the television networks, but I also have my network, which I have to feed every day to over 9 million people that are watching. And it's got to be well-produced. It's a major business. It's a network. And I collaborate with, here we're collaborating right now. I'm going to work with you. I'm going to post some of this stuff or Nancy will on whatever, I don't know which platforms we'll stick it on, but I'm going to promote you. And because I'm enjoying this conversation, I'm going to put it out on my platform. That's what matters. Yeah. What do you think your superpower is? Obviously, like today, looking at you,

you're a global celebrity. You've got all these, you know, the audience is kind of one thing. But take the audience aside. If it was just Kevin O'Leary starting from scratch, what is it that you're very good at? I tell the truth. There's room in the narrative, in any narrative, for the truth. And the world really needs that these days. There's so much BS and noise out there. Somebody has to call it like it is. Sometimes it's not a popular position, but I don't care.

I never, ever, ever waver from that. And even in the darkest days of financial crises and the FTX scandal and all that stuff, I just told the truth. And I said, here's what happened. Here's what I know. And it was just a shit storm. Unbelievable shit storm. That was rough. I told the truth and it played out to be factual. Yeah. I remember watching you on what looked like the longest, most painful, maybe it wasn't painful for you, but it looked painful watching it on Squawk Box. It felt like

15, 20 minutes of you just being hammered. How do you deal with that kind of, I mean, even you put something out on social media, you get hammered. How do you deal with all the constant negativity coming your way? I remember that interview. In fact, that's so legendary that it got turned into a Harvard case. Harvard published that about the whole FTX thing and brand and what happens and all of that stuff. It was Becky Quick, Andrew Sorkin, Joe Kernan. We talk about it when we get together sometimes. I remember it.

It was really long, but every question came and I just answered it with the facts. Maybe Joe didn't like it or Becky didn't like it or whatever, but it was a fact. I was at the center of that scandal. I was talking to Sam Bankman-Fried frequently and I just told him what I knew. And then I got called in front of the Senate to testify. I did the same thing. I said, here's what I know and here's what I knew. And then I got called in front of the Senate to testify. I did the same thing. I said, here's what I know. And here's what I think happened. And here's why I think it happened this way. And it was an absolute shit storm. It was 24 hours a day, nonstop. And I thought it would go away after two days. It lasted like for two months. It was crazy. And in the end, it was the facts that prevailed.

And everybody went back. All that stuff went to the record. They pulled that stuff up in the Senate from CNBC and at Harvard. That's out on the internet everywhere. It's a record that in perpetuity, but it was the truth. And I think that goes back to what my mother said when I was 15. Just tell the truth. I was telling the truth while the fire was coming at me.

I was being roasted like a chicken. But I said, why would I ever change what I do at this point? I mean, hopefully, I'm going to get out of the other side of this oven, which is what happened. I just remember when the storm moved away and the sun started shining and people were calling me up saying, hey, listen, that was incredible. Can you come and do this or do that? We want to talk to you about Bitcoin. We want you to be involved with this company, that company. It was an extraordinary journey. Prefer not to do that again anytime soon, but it's part of who I am today. FTX, everyone has been made whole as far as I know, right? That's come back. It isn't settled yet. There's lots of litigation, but the last offer I saw was 120%.

Wow. So, I mean, it's a remarkable situation. I don't know how and when it's going to get paid out. I mean, I lost millions on that deal. I never traded in that account. I said, I want to be paid in crypto. And that's what happened. And I had to pay my taxes in US dollars.

It was crazy. The whole thing, it was a remarkable journey. But in a great way, and I think about now, and I testified to the Senate about stable coins, digital payment systems, the era of the crypto cowboy is over. It's completely over. And now I'm an investor in WonderFi up in Canada, M2 in Abu Dhabi. I own a piece of Circle that issues USDC. I'm buying into the infrastructure of a compliant basis. I love crypto. I love digital payment systems. And I'm part of the narrative again. And it's someone who's come through the gauntlet of all of the crypto cowboy days,

Binance, SkyCZ, and the slammer. I mean, all those crypto cowboys, they're gone. And it's a good thing. Yeah, because they sort of mess up the system. You're trying to run it and look at it like a legitimate business and asset class. And meanwhile, you got these crazy swings and all that kind of stuff. So it's probably better now. Ethereum ETF just came out. We're talking about it 48 hours after it was issued. That's another step up in terms of integrating crypto into the global financial services system. I think it's a fantastic outcome. And I think this will continue. I'm going to stay. I'm 18% weighted in crypto right now. I'll probably get past 20%. That's a full weighting sectoral weighting. I'm a believer. Yeah. Well, just one more question on that, though, when you're going through that, like, I'm just curious, on a personal level, is your armor, like you're good with it? Or are you actually having sleepless nights? And like, what's going to happen? No, I don't have sleepless nights. And it's another lesson from the mom. She was not a

stock analyst. But she was very financially astute. And she taught me in my teen years, a very basic lesson about how she invested. She said, never more than 20% of your portfolio in any one sector like tech or energy, and never more than 5% in any one stock or position, and you will survive forever. It was the best advice I ever got. And I never got weighted down in any one thing because Georgette said, she's in my head now. She's on my shoulder. I was saying that position is over 5%. Sell it down, which I do.

I mean, I own a Tesla. My son got me into Tesla early before it split. The thing was like a huge position. I sold it down to five. Every time it was over five, I sold it down, sold it down, sold it down. My cost base is zero. I'm still a shareholder. I mean, the whole idea is this strategy is about diversification.

I mean, that was a very wise woman. And when she died, she had hidden her money from both of her husbands. And I was the older brother. And the executor called me and said, you've got to come down here. Your mother died a very wealthy woman. And you're the executor of the state. I said, no, she didn't. We're middle class. She said, you got to come down here. I looked at it and I called my brother and said, you're not going to believe this. And we distributed that money to our family. It was just crazy. Wow. How much of like, just talking about wealth building for a second, because there's a

lot of people listening who obviously motivated and ambitious. How much of, like, just talking about wealth building for a second, because there's a lot of people listening who are obviously motivated and ambitious. How much of wealth building do you think is skill versus timing, fortune? And what I mean by that, I just want to be clear, I'm not talking about being able to make a million bucks or two million bucks. But when someone gets to the echelon of, you know, running a hundred million dollar company or what have you, do you think that really is skill? Or do you think there's a certain element of you've got to be in the right place at the right time? It's mostly common sense. And it has to be something you're passionate about. But it's a really interesting question you're raising because just 24 hours ago, right around 24 hours ago, my wife inherited something from her family. And she generally is not that interested in... She's very smart. She's done her work, took a broker's license years ago. But she generally leaves it to managers. And she pays the management fees. And that's fine. And I don't do that. I manage our own

capital corporately and my own personal and my trust and all that stuff. But she said to me, you know, listen, Kevin, I want to manage this myself. I said, OK, let's take this cash and put it into a diversified portfolio of ETFs because I'm an ETF guy. I still do. I index ETFs. That's one of O'Shares is a business recently sold to Alps. I'm very proud of it. Still involved in the indexing of the indices. And I said, look, you can take this and diversify it. Let's put a third into the S&P. Let's put another third into international stocks. And let's put a third into fixed income. And in an hour, I showed her how to do it online. And she figured it out

in two seconds. She said, this is good. I'll manage this myself. This morning, she went online for five minutes and checked out what happened in the market. I mean, you know, it's not that hard. It just takes a discipline of doing it, of having that discipline of doing it. And I think financial literacy is very, very important. And I wish we would teach kids not just about debt and credit cards, but actually how to build to take 15% of your income as soon as you hit 22 years old and start indexing into the market, which is going to give you over your lifetime a 7%, 8% return. And if you have the average salary of $70,000 a year, you'll end up with a million and a half bucks in the bank

for retirement. Nothing wrong with that. That's what I believe in. Yeah. I'm always amazed just general financial literacy that people, they know what a bank account is, they kind of maybe know what a mortgage is, but you start talking about ETF to the average person. I talk about the Qs or everything that I'm in, the SPY, and they have no clue what I'm talking about. And they associate investing in the stock market with gambling. And that's got to change. I showed her how to look up the contents of an ETF by simply clicking on its symbol. She said, okay, it's weighted, you know, 40% in Asia, 60% in Europe. I get it. I want to see the top 10 holdings. Just scroll down there. It was Nestle, one of the top holdings in Europe. And she said, yeah, this isn't so hard. I said, no, it isn't. You just have to do it. It's all

the information's online. Being digital today is a wicked competitive advantage because I think she spent 40 minutes setting that portfolio up. And now she knows how to do it. And I think she's probably going to go back and take money back from some of her managers. That's what's going to happen because she's saying, wait a second, I can do this. I can do this. And she's comparing performance versus managed accounts. You say, wait a second, I can do this. You know, I can do this. And she's comparing performance versus managed accounts. You say, wait a second, I can do this myself. And she can't. She went to the school of Mr. Wonderful. Yeah, let's, let's go macro here. So just to kind of close out the conversation, here we are, it's July 2024. You know, a lot of stuff happening in the political space just over

the last two weeks. What do you see over the next, let's call it six to 18 months in terms of, and I'm talking everything interest rates and kind of US policy, like what do you think things are generally going to get better, a lot more shaky? Where's your head at? This is a great way to end it and a great question. I really like this question. And so when I was in grade school, I went to Stansted College right on the Derby Line border of Vermont. It was a cadet college. And we'd get up at five in the morning and we would march in the winter and take rifle training and all the history teacher. He really got me into it. And I started studying Bismarck and Kissinger and all of the Napoleon and all the influences of politics and outcomes. It really intrigued me. And because I loved it, I was scoring hundreds on all my papers. I was just killing it in history. And I said to my stepfather, I said, I'm going to do history. That's all I'm going to do. He said, no, you're not. You're

going to starve to death. You're going to do that. It's great to have this hobby, but you got to figure out a career and it's not history. It was great advice, but I never gave up my love for it. Fast forward to today, that love of history and Greek mythology and studying Bismarck and Kissinger and the First and Second World Wars and Churchill and all of that writing, it's all about policy now. I don't make money in politics. My secret competitive weapon is defining policy before it's implemented. So here we have a situation.

Let me give a specific example. If I thought right now that the outcome of the election was a pro-energy outcome in policy, that sector has been pounded like a piece of tenderloin meat. The P's are low, the cash flows are high, the regulatory environment is just brutal. And these companies have been compressed and almost ostracized because some of them are in hydrocarbons, some of them are in gas, some of them are in wind, whatever. So I'm listening to the speeches that are occurring as we speak to every talking head on business cable on the left, the right, the center and everything else. So you've got this Harris situation. She has not brought any policy forward yet. And in a way, she's very fortunate because she was a VP of no consequence. She never got any airtime for

three and a half years until now. So you don't know what she did. It could be nothing. But that's her advantage. She can redefine herself as not being a left winger. And she can redefine herself being the center and she could win the seven states that are going to determine who the president is going to be. On the other hand, and this is the lesson of Bismarck and Kissinger, listen to talking heads right now, defining her for her on the right. So if you're talking to Trump people, she's left wing, she's San Francisco, she's, you know, just the most radical, yada, yada, yada. She wants to go to straws.

So can she define her future in the center? That gives her 50-50 chance of winning. Or is she going to get slaughtered by being defined by the other side, which is what Bismarck never let happen. He always made sure whoever was backing in the German empire was someone that got the message out the way he saw it should be. This is history repeating itself. If I see her move to the center, I triple down on energy because it won't matter if she wins or loses. Energy is going to be pro-economic growth. And I'm going to capture that index at some of its lowest value in history. If I thought Trump was going to win, I should quadruple down because we already heard from Burgum. I spend all day on this stuff. I don't care who gets in the White

House. I care what the policy is. Now, if I hear her over the next 48 hours, just go left, go left, go left, and define herself as a left-wing radical, she's going to have a hard time. So she's going to have to figure this out. And I heard for the first time today something else I'll add while we're talking about politics. I talk to investors every morning before 8 o'clock, big institutional investors, all kinds of investors all around the world, Democratic investors, Republican investors, independent investors,

51% of the voters in America are independents. That's why you got to win them. But for the first time this morning, the first time I heard buyer's remorse from a very big Democratic fundraiser and investor, big guy. And I said, what's going on? He said, you know, I'm starting to think we should have run a process. We should have taken advantage of all the press we would have got. She could have come out on top, but we, and we didn't coronate her. And then we would have felt better about this risk we're having and trying to redefine her this morning. You know, just an hour ago, I saw a lot of talking heads saying she had nothing to do with the border. I don't know if she can pull that off. She was called the border czar. Maybe she can.

Social media has got all that digitally. If it was Bismarck's time, he would have just decreed she wasn't the border czar. But can't do that now. So, I mean, it's a long answer, but you see where I'm going? History repeats itself. And if you're a student of history, it helps you make economic decisions. It does in a big way. But what I love about your answer, and I hope people picked up on this, is that it's not

about Trump or Harris. For Kevin O'Leary, you're going to win either way. You're not going to hang your hat on one of the teams and put all your chips in there. You're going to be fine either way. Do you have, I mean, I know you know, speak about this necessarily, but do you have a preference or are you, do you actually think either one could win and we could all do well regardless? I'm a very lucky guy.

Here's why. I care about companies that have between five and 500 employees in America. They create 62% of the jobs. I support entrepreneurship. I have unlimited access to the hill on both sides. I can walk into the Elizabeth Warren's office, or I can walk into someone on the red, on the right. It doesn't matter because all of them support entrepreneurship. Even AOC supports entrepreneurship. Who doesn't want the American dream to succeed? I'm an ambassador of the American dream. I'm agnostic to politics. And it gives me a wonderful place because I can have these narratives with you and any senator, any governor. I've never met one that said to me, I don't want to create jobs in my state. So that's what I do. For example, I'm very critical of the Chips and Science Act. I read it.

I told the secretary, I don't see a single line in here for small business. And we create 62% of the jobs in America. You gave a trillion dollars away to the S&P 500. And there are only 40% of the jobs and half of those are overseas. Then I look at the Inflation Reduction Act. Not a paragraph in there for small business. I'm an advocate for small business. If you're going to give away that much money, $2 trillion, you've got to give at least six cents on the dollar to small business. That's a bipartisan narrative. Now, why would I ever step away from that?

Kevin, you are very good at what you do. It's been a pleasure. Thank you so much for joining today. Take care. I really enjoyed it. You're a great interviewer. Can't wait to see this thing. Thanks for listening. Hope you enjoyed this episode. If you haven't already done so, make sure you subscribe to us wherever you listen to podcasts and let me know what you think of the show. You can get me on Twitter at real John

Davids, R-E-A-L-J-O-N-D-A-V-I-D-S. Of course, hashtag making it. We'll talk to you guys next time. Thank you for tuning in to Founders Story. Keep exploring, keep dreaming, and join us next time for more inspiring entrepreneurial journeys.