Bank some savings, too.
Pay down your debt.
And ask for a prenup if you plan to get married.
In the cold hard cash crunch of January, the wealthy businessman-turned-television personality is promoting his latest book Cold Hard Truth on Men, Women & Money.
And his tips are as blunt as his comments on shows like Dragons’ Den (CBC), Shark Tank (ABC) and The Lang & O’Leary Exchange (CBC).
“Money can be a very powerful ally or a very powerful enemy if you don’t treat it properly,” says the 58-year-old entrepreneur-author, who’ll be in Halifax today for a book signing at 7 p.m. at Chapters in Bayers Lake.
O’Leary learned it could be an enemy early — as a seven-year-old boy hiding out in a European hotel with his mother and younger brother, fleeing a custody battle with his father.
“Economic terror,” he calls it in the book. “It changed my very DNA.”
“She was running out of money,” he explained during a recent interview. “She was just basically almost bankrupt and I could see the terror in her eyes.”
O’Leary learned another lesson as a teenager, buying an expensive stereo system on credit, losing his job and having to plead with relatives to pay off his debt.
The married father of two, who has homes in Toronto, Boston and Switzerland, says he never made that kind of mistake again.
But lots of people do. So many that he’s regularly inundated with calls and emails from the money-troubled.
“I keep getting the same questions over and over again, for example, about divorce or about how to raise children (to be responsible) with money so I’ve taken 50 of them and I’ve written an answer to them from my point of view.”
He gives financial advice for all stages of life but the book “isn’t being written to make you a millionaire,” he says.
“It’s to provide you with
survival when you’re in your 60s
and how to get there.”
That includes everything from infant expenses to university to marriage and divorce.
He’s already getting heat for some of his advice about divorce, specifically that people should try to go without divorce lawyers to save potentially crippling costs.
“The key is not to get the lawyers involved, even though you know your divorce is a certainty, until you actually have tried to work something out with your husband in terms of who’s getting what,” he says.
“The fight is extremely expensive and you know, I’ve seen divorce lawyers being used as marriage counsellors when they come and talk to them about how they’re feeling about the divorce. The lawyer doesn’t care about how you’re feeling, his job is completely different.”
But O’Leary also breaks down what may seem like minuscule costs, stressing that over a 20-year period, even workplace lunches or stops at coffee shops add up to tens of thousands of dollars.
“I particularly want young people to decide they’re not going to do that anymore. I find it insane that if you’re making minimum wage or close to it or you’re interning, making nothing, that you’re waiting in line to pay $5 for coffee. That’s crazy. That $5 accrued in interest over 20 years is extremely valuable, so I’m just pushing for at least awareness of what you’re giving up when you make decisions like that.”
He’s also pushing for mindful shopping, in stores and in love.
“If you’re bored, lonely, frustrated or sad, don’t go shopping,” he advises in the book. “Do anything in fact BUT shop.”
And if you’re planning to get married, insist on a prenuptial agreement or at least full disclosure of your partner’s history.
“I’m asking you to be as curious about your partner’s financial history as you are about their familial, sexual and educational background,” he writes, noting studies show money problems ruin more marriages than infidelity.
But the biggest mistake people make is not keeping track of spending, whether that’s on coffee or frequent trips to the mall.
“I have this concept called a 90-day number where you simply sit down for an hour and take all of the receipts that you spent money on (over three months) and put it down on paper and take everything you have as an income and just compare those two things.
“And because people don’t do that, they actually slowly creep into debt, debt that they can never pay back because it’s at 20 per cent on a credit card, so I find it stunning that no one wants to do such a simple exercise.”
O’Leary has staff to do that exercise. And he keeps track of every detail of his money, which is aplenty, even though he never talks about his net worth. He founded a children’s educational software company and eventually sold it for $4.2 billion. Today, aside from his television gigs, he runs O’Leary Funds, a $1.7-billion mutual fund company, and other enterprises.
He says he’s not a big spender or fan of “stuff” despite his ability to buy lots of it.
“I have a very simple philosophy on stuff. I ask myself, I don’t care what it is, do I need this? Am I still going to want this a year from now? Is this worth giving up real interest-earning cash for?”
But his wealth gives him “freedom,” something he believes the entrepreneurs who pitch their ideas and ask for investments on Dragons’ Den and Shark Tank are really after.
“The whole thing about money is not how much you have but do you have enough to be free. And that’s what I espouse in all these books I write. Are you able to do with your time whatever you want? And that could be different amounts to different people but I’m always trying to help people get to that place.”
Well, maybe not always. His Simon Cowell-like responses on TV have sent many would-be entrepreneurs packing and earned him a reputation among viewers.
“A fair percentage of them don’t like me,” he says. “I think it’s an unfair attribute because my attitude is you never have to remember what you said if you tell the truth, and in money there’s no grey. You either make money or you lose money, so I tell people the truth about money and some of them don’t like it but they trust me and that’s all I care about.
“I was on a radio show in Montreal and a grandmother came on and said on the air: ‘You know, Mr. O’Leary, you’re a bastard but I own three of your mutual funds because I think you’ll make me money.’
“I said, ‘Well, thank you.’”