Shark Tank star Kevin O’Leary, best known as “Mr. Wonderful,” told his kids early and often the cold, hard truth about money: It doesn’t grow on trees and it isn't free. He’s also not leaving them any in his will.
“I put their nose in [money],” he told Entrepreneur.com. “It’s like training a puppy.”
The mutual funds magnate began teaching his son, Trevor, and his daughter, Savannah, the importance of respecting money at the tender age of 5, just as his mom did. (His mother also gave him a $10,000 seed investment to kickstart SoftKey International from his Toronto basement back in 1983. The firm, which eventually became The Learning Company, was bought by Mattel in 1998 for $3.6 billion, though it quickly proved to be a bad move for the toy maker.)
Teaching kids to be fiscally wise is a parental responsibility O'Leary takes very seriously and one he believes too many parents slack off on. “You have to introduce money into the family as a family member because it is. It’s a member of your family.” The shrewd and sometimes controversial self-made millionaire said he forces his kids to save “10 percent of all the gifts they’ve ever gotten and it’s sitting in an account and trust until they turn 18.”
His children also understand that just because they’re growing up extremely rich -- their brutally honest dad is worth an estimated $300 million -- doesn’t mean they’ll be spoiled trustafarians (trust fund babies), now or later.
“I’m not planning on giving my kids any of my wealth,” the Montreal native recently told Chatelaine, a Canadian lifestyle magazine. “They know when their education is over, I’m pushing them out of the nest. The bird you see dead under the nest is the one who didn’t think about the future: at some point its parents stopped feeding it. That’s a hard analogy but it’s true.”
O’Leary, author of Cold Hard Truth: On Family, Kids and Money (Doubleday Canada, 2011), believes that, to prepare your kids for the harsh realities of adult life, you have let them struggle out on their own from the get-go, especially children of well-off parents.
“I tell wealthy parents that if they don’t kick their kids out of the house and put them under the stresses of the real world they will fail to launch – they will become unsuccessful adults... The message is that once school is over, you’re out and good luck to you,” he told Chatelaine.
Harsh as it may seem, while he’s apparently not leaving so much as a penny of his riches to his children, O’Leary is planning to share more than enough with his grandchildren and great grandchildren. He also told Chatelaine he’s setting up “generational skipping trusts” for them, to help foot their education. “They will always be taken care of.”
Copyright © 2013 Entrepreneur.com, Inc.