Get All Access for $5/mo

Kevin O'Leary Says to 'Survive the Rest of Your Life' You'll Need This Hefty Amount in Your Bank Account The "Shark Star" explained the concept of passive income based on interest rates.

By Emily Rella

Opinions expressed by Entrepreneur contributors are their own.

Christopher Willard/ABC | Getty Images

"Shark Tank" star and multi-millionaire investor Kevin O'Leary is known for his cut-and-dry, sometimes blunt approach to giving financial advice.

So when he told his YouTube viewers what he believes is the magic number people need in their bank accounts to "survive the rest of your life," some fans were shocked.

The number in question? $5 million.

"You can take care of a lot of people making six or seven percent of $5 million," O'Leary explained. "When you make that you have to set that aside and you don't risk it."

By setting aside the $5 million and not touching it, O'Leary suggests, the rest of any income that you make can then be used as "risk capital" to invest or spend on less stable ventures without having to worry about it affecting your overall financial security.

Related: Kevin O'Leary Bites Back at Critics of His Controversial Tweet. 'If You Don't Get It, You Don't Fit the Entrepreneurial Mold.'

O'Leary's theory is based on the idea that gaining interest on money invested will produce passive income that will create a safety net for individuals and their families.

For example, on the high end of the investor's estimate, a seven percent annual interest on $5 million is $350,000 of passive income.

However, fans in the comment section slammed O'Leary for being tone-deaf, with many saying they live "paycheck to paycheck" and that the only people who can take his advice would need to "be wealthy first." Others thought it was "reasonable."

Related: 'Shark Tank' Star Kevin O'Leary Says He Wants to Build a $14 Billion Oil Refinery in the U.S.: 'I Want To Do Something Big'

"No problem. I'll just go to my money tree in the backyard," one person joked.

"Everyone here is missing the point," another offered. "Don't take crazy risks until you have plenty of reserves. That's it."

O'Leary and his portfolio of companies at O'Leary Ventures were impacted by the collapse of Silicon Valley Bank earlier this year, which forced him to move his financial assets into several different financial institutions following the failure.

"Going forward, I think a lot of bank managers are going to say, 'Wait a second, I have no risk ... because if anything goes wrong, as long as I stay within the baseball rules of banking, nothing can happen to me because the Fed covers all my depositors," he said at the time.

O'Leary's net worth as of Wednesday afternoon was an estimated $400 million.

Related: Kevin O'Leary: Inflation Has 'Downsized' Lifestyles in U.S

Emily Rella

Senior News Writer

Emily Rella is a Senior News Writer at Entrepreneur.com. Previously, she was an editor at Verizon Media. Her coverage spans features, business, lifestyle, tech, entertainment, and lifestyle. She is a 2015 graduate of Boston College and a Ridgefield, CT native. Find her on Twitter at @EmilyKRella.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Starting a Business

He Started a Business That Surpassed $100 Million in Under 3 Years: 'Consistent Revenue Right Out of the Gate'

Ryan Close, founder and CEO of Bartesian, had run a few small businesses on the side — but none of them excited him as much as the idea for a home cocktail machine.

Franchise

The Top 10 Coffee Franchises in 2024

From a classic cup of joe to a creamy latte, grab your favorite mug and get ready to brew up success with the best coffee franchises.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Business News

'Jaw-Dropping Performance in 2024,' Says a Senior Analyst as Nvidia Reports Earnings

Nvidia reported its highly-anticipated third-quarter earnings on Wednesday.

Marketing

How Small Businesses Can Leverage Dark Social to Drive Word-of-Mouth Marketing

Dark social accounts for 70% of social media shares and is crucial for small businesses. Here's how you can tap into this hidden marketing opportunity.

Business News

'Do You Sell Cars?': Tesla CEO Elon Musk Trolls Jaguar Rebrand on X

The team running Jaguar's X account was working hard on social media this week.