Managing Money and Family: Kevin O’Leary’s Approach

The Dilemma of Family and Money

Many people often find themselves in a predicament when their family members ask for financial help. This is a complicated situation because you don’t want to undermine the value of your relationships with your siblings, cousins, or other relatives.

A Simple Strategy: Gifting vs. Loaning

Renowned investor and entrepreneur, Kevin O’Leary, popularly known as Mr. Wonderful, has encountered this issue countless times with his extended family. Through trial and error, he has developed a straightforward approach: he only provides gifts and never loans.

Instead of lending money, O’Leary agrees to a one-time gift. For instance, if a family member asks for $150,000 for a restaurant venture, he would give them a $50,000 gift, with no expectation of repayment.

To solidify the arrangement, O’Leary looks the family member in the eye or gives them a handshake to establish an unspoken contract. This agreement entails that the money given must never be expected to be paid back, and both parties must never discuss the gift again.

The Reasons Behind O’Leary’s Approach

1. Money’s Potential Impact on Relationships

O’Leary’s philosophy is grounded in the belief that money has the power to fracture families. Financial stress often puts strain on marriages and relationships, and O’Leary asserts that loaning money within the family does not strengthen these connections.

2. The Challenge of Pleasing Everyone

O’Leary suggests that attempting to financially support an ever-growing circle of relatives is a futile endeavor. It is impossible to cater to the needs of an extensive network of family members, and this endeavor often results in tension and negative emotions.

3. Avoiding the Curse of Entitlement

Based on a lesson he learned from his mother, O’Leary believes that entitlement is a detrimental trait. By shielding loved ones from risks through monetary aid, he argues that they miss out on personal growth opportunities and end up living lives of mediocrity.

Embracing Personal Freedom

For O’Leary, his entrepreneurial pursuits were never solely motivated by monetary gain. His ultimate goal has always been to achieve personal freedom. This freedom allows individuals to dedicate their time to meaningful activities that genuinely matter to them, leaving an impact on others.

Time is of utmost importance to O’Leary, and he views each 30-minute block of his day as valuable. He only engages in activities that interest him and contribute to his goals, disregarding any unnecessary distractions or noise.

O’Leary has seen the benefits of his approach manifest in his own children. By instilling the values of hard work and independence, they have achieved success in their respective careers.

Summary

In conclusion, the relationship between money and family can be a tricky one. However, Kevin O’Leary’s strategy of gifting rather than loaning provides a potential solution. By setting clear boundaries and expectations, O’Leary emphasizes the importance of preserving family relationships and avoiding the pitfalls of entitlement. Ultimately, his approach seeks to empower individuals and enable the pursuit of personal freedom.

Source: Kevin O’Leary: How I handle family members who ask for money and the one rule I always enforce