When Shark Tank's Kevin O'Leary revealed 3 financial habits that differentiate the rich from the poor

In an interview on The School of Greatness podcast with Lewis Howes on February 20, 2023, entrepreneur and Shark Tank investor Kevin O’Leary was asked what financial habits set the wealthy apart from those who do not focus on building wealth.

According to O’Leary, wealthy individuals avoid excessive risk, recognize their limitations in investing, and engage in philanthropy. These habits contribute to their financial stability and long-term success.

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Shark Tank Kevin O'Leary on the financial principles that set the wealthy apart

1) The wealthy avoid inordinate risk

The Shark Tank investor emphasized that wealthy individuals generally adopt a conservative approach to investing. He stated,

"You're going to find that the majority of very wealthy people are extremely conservative in how they invest. They don't need to beat the market. They've already done that. They just need to preserve their capital."

The Shark Tank investor further explained that while some wealthy individuals may invest in speculative assets such as Bitcoin or high-risk stocks, these investments represent only a small fraction of their overall wealth. He noted,

"You hear that they might buy Bitcoin or they may buy a speculative stock, but if you look at it as a percentage of what they're worth, it's nothing."

O’Leary also highlighted that most wealthy individuals avoid high levels of debt when investing. He explained that they generally do not rely on leverage to increase their investment potential and prefer to take a cautious approach. Instead of making highly speculative investments, they focus on long-term financial stability and capital preservation.

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2) The wealthy recognize their limitations in investing

According to O’Leary, many successful entrepreneurs excel at building businesses but may not necessarily be skilled investors. The Shark Tank investor stated,

"What happens is you find out later that entrepreneurs are actually really bad investors. They're very good at running a business, and they focus myopically on that their whole lives."

He observed that in many cases, the spouse of a successful entrepreneur plays a key role in managing financial risk and making more prudent investment decisions. According to O’Leary, while entrepreneurs focus on building their businesses, their spouses often take responsibility for maintaining financial stability within the family.

O’Leary also pointed out that wealthy individuals tend to delegate tasks that fall outside their expertise. The Shark Tank investor said,

"You'll find that what's successful about families is they know what they're good at, or wealthy people, and they know what they're not good at, and they don't try and do things they don't understand."

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3) The wealthy engage in philanthropy

O’Leary noted that many wealthy individuals allocate a portion of their wealth to charitable causes. He explained that financial success often leads individuals to seek ways to give back to society by supporting initiatives that hold personal significance.

According to O’Leary, philanthropy is a common practice among the wealthy, as many are motivated to contribute to causes that align with their values and experiences. He also emphasized that giving back serves as a protective measure against financial decline. He stated,

"If you believe in karma, and I do, when you do that, it kind of protects you against the horrific downside of something bad happening to you because you're just so greedy."

The Shark Tank investor warned that individuals who accumulate wealth without giving back may experience negative consequences over time. He explained,

"If you show me a greedy wealthy person, just wait 10 years. Then you'll just show me a person—somehow karma will separate their money from them."

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