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Cold Hard Truth On Men, Women, and Money

50 Common Money Mistakes and How to Fix Them



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About The Book

A new financial guide on how to avoid money mistakes at every stage of life, from bestselling author and TV superstar Kevin O’Leary—“a completely unique personality. He is able to say things that are sharp and funny but ultimately meaningful” (Los Angeles Times).

Don’t spend too much. Mostly save. Always invest.

This is simple advice, but it’s often the simple advice that’s easy to swallow and hard to follow. Kevin O’Leary understands that getting a handle on your personal finances can be challenging at any age. Whether you’re a parent struggling to explain savings to your children, a student contemplating a big loan to pay for school, a newly engaged couple considering joint bank accounts, or a baby boomer entering retirement, Kevin offers solid, practical advice to help you make—and keep—more money.

As a star on ABC’s Shark Tank, Kevin’s success with money management and in business is legendary. But he’s made mistakes along the way, too, and he’s written this book so others can benefit from his experiences. Each chapter is geared to a specific age or stage in life and focuses on simple changes you can make to avoid debt, save money, and invest for a brighter future. You’ll find real-life examples of common money mistakes and strategies for avoiding them, “Cold Hard Truth” quizzes and charts aimed at boosting your financial wisdom, and tips and tricks for making more money and growing it faster to achieve financial freedom.

The Cold Hard Truth on Men, Women, and Money offers an invaluable opportunity to walk through some of life’s biggest decisions with one of the sharpest financial minds today.


Cold Hard Truth On Men, Women & Money CHAPTER 1 Money Lessons I Learned from My Mother
In the same way that our relationship to food is shaped by lessons learned during childhood, so, too, is our relationship with money. It is often our parents, for better or for worse, who teach us our first money lessons. My mother, Georgette, was a master with money. She was born in Montreal to parents of Lebanese descent. And while she didn’t have a fancy business degree, she was thrust into the family clothing business at a very young age, after the sudden death of her father. In the Lebanese culture, businesses are usually passed down to the boys, but her brother, Norman, was too young to take over. So in the beginning, it was up to my mother and her sister to keep the business running until Norman was old enough to take over. Turns out, my mom was a natural at balancing the books. She met my father, Terry, through the family business. He was a charismatic guy and one of the company’s most talented salesmen—until his personal problems meant he lost every penny he earned.

Many marriages crash against the unforgiving shores of bad money management, and too often children bear the brunt of their parents’ financial decisions. My parents shielded my brother, Shane, and me from the worst of their marital woes, but my mother’s marriage to my father broke down largely over money matters. He was good to Shane and me, but he was a fun-loving Irishman who liked to buy rounds at the bar and gamble with his friends.

I was six years old when my mother was granted sole custody of Shane and me. She got remarried, to a man named George Kanawaty, who became a father figure to Shane and me—something my own father couldn’t be because of his addictions. After the wedding, we all moved to Illinois so that my new stepfather could pursue a Ph.D. in business. One day, fed up with the custody arrangement, my birth father threatened to come to Champaign-Urbana and bring Shane and me back with him. My mother had heard he’d fallen in with a rough crowd, so she didn’t want us going there. The plan was for my mom and both of us kids to fly to Europe for as long as it took George to reason with my dad in Illinois. But the trip required cashing in a big part of George and my mother’s emergency savings, which weren’t significant to begin with. When my mother married George, he was a student with $36 to his name.

Where there’s a will, there’s a way—and I have never met a woman with more will than my mother. The three of us flew to Lausanne, Switzerland, where my brother and I would be safe. After waiting it out for weeks in a foreign hotel room with two little children, and despite her determination and cool resolve, my mother finally burst into tears. She was at the end of her rope, in terms of both stress and finances. The money that was keeping her children safe from a man she didn’t trust to take care of them was running out. And both George and my mother had used up almost all of their resources. There was nowhere else to turn. Kids pick up every nuance of parental strife and store it in a place so deep in their subconscious that it affects them for the rest of their lives. I knew George and my mother didn’t have the money to hire expensive lawyers to fight this in court, and they certainly couldn’t afford to keep us hidden in Europe forever. I will never forget my mother’s fear, the look on her face when she realized that eventually the money would run out and she might lose her children.

Less than eight weeks into our exile, sadly, tragically, my father died of a heart attack at the age of thirty-seven. The custody struggle was over. Still, our precarious financial situation, and my mother’s panic about it, moved through my bloodstream in that one moment, and I think it changed my very DNA. I remember thinking, I never want to feel this frightened and powerless again. I never want my own children to experience economic terror. Early-childhood trauma is an awful thing, but in this case, it might have been an odd blessing for me. Looking back, I think that’s when the seeds of my own need to achieve financial security were sown.

Maybe you’re wondering why I’m telling you this story. The truth is that when I deliver tough-minded financial advice, I want you to know where it comes from. I’m a wealthy man now, but at various points in my life, I’ve experienced the terror of economic insecurity firsthand. I’ve shared this personal story with you to show that sometimes in life, people may be able to help you out of difficult situations. But there are other times when the only thing that can help you is money. But for money to save you, first, you have to save it.

Beyond saving money in case of catastrophe, my mother was also a savvy spender. Here’s the distinction: She was careful with her money, but she wasn’t cheap. I remember admiring a Chanel jacket she once wore to Christmas dinner at our place in Boston.

“Great jacket, Mom. Must have cost you a fortune.”

“Not this year,” she said.

“What do you mean?” I asked.

“Kevin, dear. This jacket is old. I’ve had it forever.”

This surprised me because the jacket was so stylish and beautiful, a black classic box cut. It looked like she’d just picked it up off the rack from that season’s new line, but she then told me she’d bought it in the late sixties, twenty years earlier! She spent, at the time, a small fortune—about $500—for that jacket. We didn’t discuss this further, but knowing my mother, she would have saved and thought about this purchase for a long time before actually following through. She would have tried it on a few times, with George there to give her feedback. But the thing is, she wore that jacket for decades. She didn’t dry-clean her clothes every time she wore them. She steamed them now and again, to maintain their shape and color. She never flung her clothes on the back of chairs. She always hung them up on hangers. Not everyone can afford Chanel, that must be said, but this example begs some serious math.

Let’s say you buy a bargain black blazer at the Gap for $100. It’ll probably stay in style for a season and pill and fade after dry cleaning it five to ten times. So in the course of twenty years of professional use, you’ll purchase a new black blazer every two years, say, for a total of $1,000—assuming the price never goes higher than $100. Using the math above, you could say my mother’s jacket, purchased for $500 more than twenty years earlier, saved her $500. But here’s the real value: The perpetually fashionable Chanel blazer would fetch about $1,000 today, according to vintage clothing collectors I’ve consulted.

So who saved more money? You, with your $100 blazer purchased every two years for twenty years, at the cost of $1,000? Or my mother, who bought one jacket, once, at a price of $500, wore it for twenty years, then sold it for $1,000? I want you to know this is coming from a man who balks at a designer price tag. I can’t believe how much good-quality clothes cost. And I also want to be very clear that I’m not advocating that you go out and buy Chanel if you can’t afford it. But I am asking you, with everything you buy, to consider value over impulse. I am asking you to examine all your purchases and begin to treat everything you buy as an investment. Everything. Even a blazer. I want you to start thinking about quality and the potential resale value of every single purchase you make. It’s a good discipline that will cut down on a lot of impulse and redundant spending.

That’s what Georgette did. Incidentally, that’s what my wife, Linda, does, too. We went to a black-tie function recently, and she pulled out a dress she’s had for more than ten years. It’s a classic cut, beautifully made, the kind of silhouette that never goes out of style. She’s gotten a lot of use out of it. And while my mother bought some of the most beautiful and expensive clothes I’ve ever seen, almost none of what she bought lost much of its value or stylishness over time. Her closet was well curated. She never bought too much or overspent. She was a smart shopper. Incidentally, my daughter, Savannah, has become a vintage clothing hound. She buys a lot of great pieces secondhand. I like to think she inherited her unique style from her mother and her frugality from her grandmother.

In 2008, my beloved mother passed away. It was devastating and unexpected: a heart attack followed by a stroke on the operating table. Days later, I was told that she had made me the executor of her estate. After years working for the United Nations, she and George had enjoyed a textured life, rich in experiences, travel, friends, and fine food, but their lifestyle was by no means overly lavish. They mostly lived on George’s solid UN income, so my mother’s money was hers to invest and spend. She never merged it with her husband’s. That money was all her own, and George didn’t even know how much she had. Keeping some money separate for you and only you is one of the best financial lessons I can impart to you. (I’ll talk more about that and what I call your “Secret 10” in Chapter 6.) But at the time of my mother’s death, I hadn’t given this idea much thought. Mostly, I never imagined that Georgette’s savings amounted to much. But when I opened the books and studied her long-term investment portfolio, I got a big surprise. She’d amassed the kind of nest egg with which most people could enjoy a worry-free, exciting retirement. By the looks of her portfolio activity, she mostly invested and rarely spent. She didn’t set aside considerable chunks of cash, just a steady amount every month, and only in stocks or securities that paid her a dividend or a yield.

When people talked about investing like this, I always thought they were talking about another era. But do you have any idea what happens to a portfolio over forty years that contains only bonds with interest and stocks with dividends? You have to see it to believe it. My mother’s portfolio was a sweeping, arcing line tracing value over time—it only went up—and her balance steadily grew and multiplied at an incredible rate. When I analyzed my mother’s secret cache, when I studied her slow and steady investment style and the healthy nest egg she’d tucked away for herself, here’s what I learned: With very little money and a bit of expertise, anyone can grow his or her money. My mother did it. So can you.

I received this Warhol-like canvas as a gift from a friend who said I was “obsessed by money.” I took it as a compliment! This now hangs on the wall at O’Leary Ventures Corporation.

(Artman Agency/Cyrille Margarit)

Spending, Saving, Investing: A Personal-Finance Quiz
To change your fortunes, abide by my mother’s three simple rules: Don’t spend too much. Mostly save. Always invest. Before we embark on this financial journey together, the most important tool you’ll need is information—about yourself, your goals, and your ability to achieve them. You have to know where you’re at before you head where you’re going. To test your self-knowledge about your own spending, saving, and investing habits, try the quiz below. There are no wrong answers, only honest ones.
1. At any given time, do you know exactly how much money is in your wallet, your checking/investments/savings accounts? Y/N

2. Do you go shopping with a specific list, buying only what’s on it with rare exceptions? Y/N

3. Do you refrain from putting consumer goods or groceries on a credit card, paying only in cash or with debit card unless absolutely necessary? Y/N

4. Do you resist last-minute purchases (such as magazines, chocolate bars, or gum) in the checkout aisle? Y/N

5. Do you research prices and comparatively shop before you hit the stores? Y/N

6. Do you skip or block the shopping channel at home to prevent making unnecessary purchases from your couch? Y/N

7. Do you pay off your credit cards at the end of the month, using them only for convenience or to gather reward points? Y/N

8. Do you keep your receipts carefully filed and promptly return items if you’re less than satisfied with them or find you don’t need them? Y/N

9. Are you aware of all available discounts, rebates, and coupons before making any purchases? Y/N

10. Are you able to avoid shopping when you’re stressed, bored, worried, or tired? Y/N
1. Do you set aside a certain amount every month for savings, never veering from these commitments unless it’s an emergency? Y/N

2. Do you save money in the highest-interest savings account you can find? Y/N

3. Do you keep minimum balances to avoid paying bank fees? Y/N

4. Do you understand how much you’re paying in banking fees? Y/N

5. Do you live within your means? Y/N

6. Do you make debt repayment a priority? Y/N

7. If you have children, do you have a plan in place to save for their education? Y/N

8. If you’re planning to buy a house, are you saving for a sufficient down payment (at least 20 percent)? Y/N

9. Do you cultivate good habits—such as bringing lunch to work and using libraries—with the express purpose of saving money? Y/N

10. Do you have money set aside in case of emergencies? Y/N
1. Are you ready to invest? Y/N

2. Do you have a clear understanding of your retirement goals? Y/N

3. Do you understand your appetite for risk? Y/N

4. Do you have working knowledge of the various financial products available to you, from stocks to bonds to treasuries to mutual funds, and the difference between yield, nonyield, dividend- and non-dividend-paying products? Y/N

5. Do you have a pension plan? Y/N

6. Do you understand retirement vehicles—IRAs, 401(k)s—and their attendant tax benefits? Y/N

7. Do you work with a trusted financial advisor who helps you navigate complicated investing vehicles? Y/N

8. Do you pay attention to financial news on a regular basis? Y/N

9. Do you invest only in things you understand? Y/N?

10. Do you react to volatile markets with moderation and patience? Y/N

If you answered yes to most of these questions, kudos to you. I hope this book reinforces some of your good spending, saving, and investment habits and helps you avoid forming bad ones.

If you’ve answered roughly half yes, half no, then these pages offer valuable advice to help you tip the scales back in favor of financial health.

If you answered no to most of these questions, then you are heading for financial trouble. But it’s not too late to change; in fact, when it comes to money, it’s never too late to change. Keep reading.

About The Author

Photograph by Matt Barnes,

Kevin O’Leary is one of North America’s most successful business entrepreneurs, as well as a star of ABC’s Shark Tank. Kevin founded and built SoftKey (later called The Learning Company), a global leader in educational kids’ software, and negotiated its sale to Mattel for $4.2 billion in 1999. Since then, he has successfully cofounded, funded and sold numerous companies in a range of industries, including storage, entertainment, and finance. Today, Kevin is the chairman of O’Leary Funds and O’Leary Mortgages, and the founder of O’Leary Fine Wines. He is also an avid guitarist and photographer.

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