“Shark Tank” star and multi-millionaire investor Kevin O’Leary is known for his cut-and-dry, sometimes blunt approach to giving financial advice.So when he told his YouTube viewers what he believes is the magic number people need in their bank accounts to “survive the rest of your life,” some fans were shocked.The number in question? $5 million.
“You can take care of a lot of people making six or seven percent of $5 million,” O’Leary explained. “When you make that you have to set that aside and you don’t risk it.”By setting aside the $5 million and not touching it, O’Leary suggests, the rest of any income that you make can then be used as “risk capital” to invest or spend on less stable ventures without having to worry about it affecting your overall financial security.
Related: Kevin O’Leary Bites Back at Critics of His Controversial Tweet. ‘If You Don’t Get It, You Don’t Fit the Entrepreneurial Mold.’O’Leary’s theory is based on the idea that gaining interest on money invested will produce passive income that will create a safety net for individuals and their families.For example, on the high end of the investor’s estimate, a seven percent annual interest on $5 million is $350,000 of passive income.However, fans in the comment section slammed O’Leary for being tone-deaf, with many saying they live “paycheck to paycheck” and that the only people who can take his advice would need to “be wealthy first.” Others thought it was “reasonable.”
Related: ‘Shark Tank’ Star Kevin O’Leary Says He Wants to Build a $14 Billion Oil Refinery in the U.S.: ‘I Want To Do Something Big'”No problem. I’ll just go to my money tree in the backyard,” one person joked.”Everyone here is missing the point,” another offered. “Don’t take crazy risks until you have plenty of reserves. That’s it.”O’Leary and his portfolio of companies at O’Leary Ventures were impacted by the collapse of Silicon Valley Bank earlier this year, which forced him to move his financial assets into several different financial institutions following the failure.
“Going forward, I think a lot of bank managers are going to say, ‘Wait a second, I have no risk … because if anything goes wrong, as long as I stay within the baseball rules of banking, nothing can happen to me because the Fed covers all my depositors,” he said at the time.O’Leary’s net worth as of Wednesday afternoon was an estimated $400 million.Related: Kevin O’Leary: Inflation Has ‘Downsized’ Lifestyles in U.S