"The danger of money in a family" — Shark Tank investor Kevin O'Leary shared insights on raising non-entitled children

During an interview with Lewis Howes of The School of Greatness podcast, Kevin O'Leary, a prominent investor on Shark Tank, shared insights into the challenges that money can pose in family dynamics. According to O'Leary,

"Something about money you should understand and everybody should think about is the danger of money in a family is entitlement.

In the December 28, 2024 podcast, he argued that entitlement, fueled by financial security, can harm a child’s development and hinder their growth. O'Leary’s own experiences and approach to wealth seem to have shaped his perspective on how to raise children without instilling a sense of entitlement.

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Shark Tank Kevin O'Leary’s approach to raising non-entitled children through money management

The impact of entitlement on personal growth

O'Leary highlights the damaging effect that entitlement can have on an individual's future. The Shark Tank investor explained,

"If you entitle somebody and you de-risk their future, you have actually cursed them. You've cursed them. You've almost guaranteed that they will fail, that they will never launch."

In his view, financial security should not come at the cost of personal responsibility or self-reliance. By removing challenges and providing everything for a child, parents might unknowingly prevent them from learning valuable life skills. O'Leary’s own experience serves as an example of how hard lessons early on can foster resilience and independence.

O'Leary shared a formative memory from his college graduation, where his mother delivered a crucial message:

“The dead bird under the nest never learned how to fly.”

This was her way of telling him that financial support would cease once he graduated. The Shark Tank investor remarked,

“She said, there’s no more checks... I’ve paid from birth to last day of college, that’s my deal, and you get nothing else from me.”

Her decision to withhold financial assistance after graduation forced O'Leary to learn to fend for himself, an experience he now credits with shaping his future success.

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Structuring wealth for future generations

O'Leary’s approach to wealth involves careful planning to ensure that his children do not become dependent on financial handouts. When he had a significant liquidity event, he set up generational skipping trusts, ensuring his children would have financial support through college, but not beyond. As O'Leary explained,

“After they graduate, nothing, zero.”

This decision was motivated by his belief that children should not rely on family wealth to build their futures. He implemented this system when his children were young, sharing his plans with them even when they were only four and six years old. The Shark Tank investor recalled,

"I said that to my kids and they were four and six, they just laughed at me."

Although his children initially did not understand the implications of this decision, it set the foundation for their future. The trust was designed to cover their educational expenses, but upon graduation, they would be expected to stand on their own.

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The wake-up call for his son

O'Leary recounted an important moment when his son realized the value of hard work and responsibility. His son, who was not improving himself academically, learned about the family trust and its limitations. O'Leary shared the conversation he had with his son, he said:

“You don’t have to worry. You’re going to get to finish high school. But it doesn’t look like you’re going to get to college because your marks are terrible.”

This direct discussion served as a wake-up call for his son, motivating him to improve his academic performance. The Shark Tank investor underscored the significance of this conversation:

"That was the wake up call and it may sound cruel and people may say that’s terrible."

However, he emphasized that this approach was crucial for his son's development, as it eliminated any illusion that success could be achieved without effort. Ultimately, his son graduated and is now employed as an engineer at Tesla. O'Leary reflected,

“Today he has started his first week as a full-time engineer at Tesla after going through the whole system and graduating as an engineer.”

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Catch Kevin O'Leary and the rest of the Shark Tank investors in action every Friday at 8 PM ET on ABC. Viewers can also stream full episodes on Hulu.