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46KO: No, they??are just larger reflecting that the market is ten times thesize. The deals tend to be in the millions in the US and in the hundredsof thousands in Canada, but there are great opportunities on both sides. C: O'Leary Funds has the tagline "Get Paid While You Wait!" referringto a policy of only purchasing securities that pay yields. Why is thisgood business? KO: When I was young and my mother was working at Kiddies Togs, sheused to come home and invest a third of her pay cheque. She used to saytomy brother and I, "Never buy a stock or bond that doesn't pay interestor a dividend. You always have to get paid for everything you buy."That??is how I live my life. I realized that it is such a simple investmentphilosophy. While you are sitting around waiting for the markets to goup, at least you??are getting your dividend which is equivalent to sixpercent. So she was absolutely right, and when I founded O'LearyFunds just to put my own money into, I realized there would be tensof thousands of Canadians who agreed. We now have over a billion anda half dollars being invested and every security we own has a yield. C: You advocate conservative investment values, yet equities areinherently risky. How do you reconcile that? KO: Well, I have 20 different funds and there are all kinds ofmandates, but essentially I put securities into two baskets. There arecompanies that are growing free cash flow every quarter and paying adividend, and there are companies that are not. I never own the onesthat are not. I only own companies that are growing free cash flow,paying their dividends, and increasing their dividends. So what I endup with is the thesis that a company that is profitable, even though itsprice may be volatile, doesn't go out of business, and continues to pay.I tend to own things like Telcos and diaper companies and pipelinesand railways and storage facilities. things that are not correlated withrecessions. They??are not exciting, they??are very boring, but they pay alot of cash. The older I get, the more conservative I am. I don't wantto take risks. So when people say buy gold or get this hot new miningstock, I don't even hear them. C: Like Donald Trump, the boundaries between your TV persona andyour business dealings have become obscured. How do you preventbecoming more brand than substance? KO: I look at it this way. there??is no grey in making money. You makemoney for your shareholders or you lose it. So what I want to be measuredon above everything is not my performance on TV, but rather theperformance of O'Leary Funds. Currently we're the top performingCanadian equity fund in the country in Canadian dollars, and we have oneof the best global bond funds in the country, always in the top quartile.These are things that are measurable, there??is no brand to that, it's justperformance. I love what I do on television. I meet amazing people andit keeps me hopping, but I keep my feet grounded in O'Leary Funds. C: Since you wrote your book, you??have separated from your wife. Withthat new development, do you think it's possible to achieve thebusiness success to which you??are accustomed, as well as success inyour personal life? KO: I think you can, and I did so for 21 years. I was an entrepreneurfor over two decades, was successfully married, and raised kids thatI??am very proud of. Our separation is very amicable, so it's not a badsituation by any means, but the pressures of being an entrepreneurand the time constraints probably were a factor. However, my wife wasat the book launch with my kids. We??are still a family unit, that's howwe look at it. It is unfortunate, and I try to deal with it the best I can,like any adult would. But there is pressure. Certainly television is verytime consuming and is probably a factor in what happened. C: In a recent interview, you spoke about raising kids, saying that youwould give them an education as long as needed, and then set themfree with no money so they can earn it on their own. Was that true? KO: Yeah, it is. I??will tell you an anecdotal story that I think isimportant. My dad is 81. He lives in Geneva and just celebrated hisbirthday. I go over there a lot to see him and I take whatever child isavailable so he can see his grandkids. My daughter is currently in NewYork but my son is in Toronto. So my son and I get on the flight, andhe says to me, "Why is it I always have to go left and sit in the backand you get to sit in the front with the good food and movies?" And Ianswered, "Because you have no money." I think that??is a veryimportant lesson. He'll have to go and get that on his own. I think itwould be a huge disservice to just give him money. What motivationwould he have to go out and make it on his own? I see lots of reallymessed up rich kids and I don't want mine to become like that. I maygive my money to a cat. I haven't decided yet. C: What advice do you have for the next generation of wealth builders? KO: You have to be very disciplined about money and not be emotionalabout it. I look at situations where I'm looking at an investmentopportunity and it??is clear to me that it??is not a good idea. Maybesomebody used their family's wealth or mortgaged their homes to pursueit, and yet they have never tested the market. They??have never gone toan arm's length investor and asked "Would you invest in this at thisvalue?" I see them getting very emotional about it, but I don't see whereemotion fits in. Money has no emotion, it has no soul, and it doesn'tcare. It just takes the path of least resistance, trying to get a return. The Cold Hard Truthisavailable in bookstoreseverywhere, and catch Kevin on CBC's Dragons'DenWednesdays at 8:00.