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Shark Tank<\/em>\u00a0investor Kevin O\u2019Leary doubled down on his belief that true wealth requires at least $5 million in liquid assets.<\/p>\n \u201cYou\u2019d be amazed, how many wealthy people that say they\u2019re rich do not have liquidity,\u201d O\u2019Leary said on Fox Business<\/a>.<\/p>\n O\u2019Leary said he practices what he preaches, keeping at least $5 million of his own wealth in Treasury bills\u2014short-term U.S. government securities that can be quickly converted to cash.<\/p>\n The Canadian businessman argues that true financial security means being able to access your wealth at a moment\u2019s 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\u2019t count toward real wealth.<\/p>\n Financial experts say the strategy has merit. Tech entrepreneur and FinlyWealth<\/a> co-founder Abid Salahi told GOBankingRates<\/a>, \u201cOur data shows that clients with a higher liquidity ratio \u2014 typically 20 percent<\/a> to 30 percent of their total assets\u2014are better equipped to handle financial emergencies and capitalize on investment opportunities.\u201d<\/p>\n O\u2019Leary acknowledges that hitting that number is no small task. \u201cIt\u2019s very hard to get five million liquid because in this market that makes you $250,000 a year pretax,\u201d he said. \u201cYou 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 pretax. That\u2019s why it\u2019s the magic number.\u201d<\/p>\n This isn\u2019t the first time O\u2019Leary\u2019s made this claim. He had the same sentiments back in November<\/a>. Even when you are tempted to spend or loan the money, he advises people not to. \u201cThat is not what it\u2019s for,\u201d O\u2019Leary continued. \u201cIt\u2019s there to guarantee your financial freedom and that of your family for the rest of your life.\u201d<\/p>\n O\u2019Leary is not alone in that thinking. His former Shark Tank<\/em> co-star Mark Cuban<\/a> said that the first step to getting rich is having cash available. \u201cYou aren\u2019t saving for retirement. You are saving for the moment you need cash,\u201d he wrote on his blog<\/a>.<\/p>\n In 2020, billionaire investor and Bridgewater Associates founder Ray Dalio declared that \u201ccash is trash,\u201d but by 2023, he had walked back on that position<\/a>, stating, \u201cCash offers a good return without price risk. It also keeps my money as dry powder, so cash looks \u2018pretty good\u2019 to me.\u201d<\/p>\n O\u2019Leary sees the $5 million threshold not as a finish line, but as a foundation: \u201cI tell all my entrepreneurs, \u2018That\u2019s your goal.\u2019 \u201d<\/p>\n \u2014Amaya Nichole<\/em><\/p>\n
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