Kevin O’Leary Reveals the Magic Number You Need to Actually Be Rich—It’s Not What Most ‘Rich’ People Think

The investor and TV personality says liquid assets—not property or business equity—are the true measure of wealth.

BY AMAYA NICHOLE, NEWS WRITER

Kevin O’Leary. Illustration: Inc; Photo: Getty Images

Shark Tank investor Kevin O’Leary doubled down on his belief that true wealth requires at least $5 million in liquid assets.

“You’d be amazed, how many wealthy people that say they’re rich do not have liquidity,” O’Leary said on Fox Business.

O’Leary said he practices what he preaches, keeping at least $5 million of his own wealth in Treasury bills—short-term U.S. government securities that can be quickly converted to cash.

The Canadian businessman argues that true financial security means being able to access your wealth at a moment’s notice, be it to weather an emergency or to seize an investment opportunity. A house, a private business, or illiquid assets may look impressive on paper, but in his view, they don’t count toward real wealth.

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Financial experts say the strategy has merit. Tech entrepreneur and co-founder of FinlyWealth Abid Salahi told GOBankingRates, “Our data shows that clients with a higher liquidity ratio — typically 20 percent to 30 percent of their total assets—are better equipped to handle financial emergencies and capitalize on investment opportunities.”

O’Leary acknowledges that hitting that number is no small task. “It’s very hard to get five million liquid because in this market that makes you $250,000 a year pre-tax,” he said. “You have a family of four and poo-poo hits the fan in your world and everybody loses their job, you can sustain a family on 250 pre-tax. That’s why it’s the magic number.”

This isn’t the first time he’s made this claim. He had the same sentiments back in November, stating that even when you are tempted to spend or loan the money, O’Leary advises people not to. “That is not what it’s for,” O’Leary continued. “It’s there to guarantee your financial freedom and that of your family for the rest of your life.”

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