“Generate yield” — Shark Tank star Kevin O'Leary on why one should never spend the principal amount

Shark Tank investor Kevin O'Leary took to Instagram on December 20, 2024, to share a core principle that guides his investment strategy. The investor, known for his straight-forward approach has consistently advocated for disciplined financial practices. In his Instagram post, he stressed on the importance of generating yield/

Everything has to generate yield, whether it's a fixed income position or an equity," he wrote.

O’Leary elaborated on this approach, and stated that in his world one should "never touch a principal." Instead of that, they should "adjust [your] spending habits," and these should be based on how much the person can generate from their portfolio.

This philosophy, which he learned from his mother at a young age, centers on ensuring that investments continuously produce income. O’Leary emphasized the importance of holding assets that “drip cash,” such as fixed-income securities or dividend-paying equities. The approach reflects his focus on creating consistent returns rather than depleting the initial investment.

Kevin is known as "Mr. Wonderful" on Shark Tank and according to his ABC Shark bio, he looks for businesses that make money and are environmentally friendly.

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Shark Tank: Lessons from Kevin O'Leary’s Instagram

On his Instagram account, O'Leary frequently shares insights into his financial strategies and philosophies. In the latest post, the Shark reflected on a lesson he learned from his mother during his childhood.

“When I was seven and my brother was five, [my mother] would take us to the bank… She’d say to us, boys, never spend the principal, only the interest,” he wrote.

He noted that this yield allows him to fund his lifestyle, contribute to charities, and support his family—all without depleting the principal. He referred to it as, “chicken on a spit dripping cash.”

This isn’t the first time O’Leary has shared practical financial wisdom on Instagram. In another post, he highlighted his mother's advice on saving and investing, particularly her emphasis on dividend-paying stocks.

O’Leary’s yield-focused approach mirrors his broader philosophy on investments. As he elaborated, his objective is to make his portfolio work for him, ensuring that every asset—whether stocks, real estate, or fixed income—contributes to generating steady cash flow.

O’Leary believes in owning assets that appreciate over time while also providing regular income. This strategy ensures long-term financial stability, even in volatile markets.

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Key financial tips from Shark Tank's Kevin O'Leary

Kevin O’Leary constantly gives financial advice many of which were instilled by his mother, Georgette. He has noted several times that this advice guided him throughout his career. Here are some of his financial tips:

1) Always save a consistent portion of your income: O'Leary advises making sure that a percentage of profits is placed aside for future investments and treating savings as an unavoidable expense.

2) Invest in dividend-paying stocks: He suggests concentrating on investments that yield steady income since they can offer both stability and growth at the same time.

3) Avoid debt: O'Leary stresses the value of avoiding consumer debt and living within one's means. Maintaining financial management requires not spending money you don't have and paying off credit cards every month.

4) Let assets work for you: According to the investor, every investment—stocks or real estate—should produce a consistent flow of revenue. This way of thinking guarantees steady wealth growth while permitting financial freedom.

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Kevin O'Leary joined Shark Tank in 2009 and is known for his incisive criticism and catchphrases like "You're dead to me." On the show, he assesses business pitches by focussing on the idea's financial feasibility and the caliber of the people behind it.

Shark Tank airs every Friday at 8/7c on ABC.