How Not To Invest Stupid And Other Smart Money Lessons From A Shark Tank Billionaire

John Paul DeJoria went from living out of a car to becoming a shampoo and tequila billionaire. Some forty years after he struck it rich, he shares investing wisdom he’s gained along the way.

_{By Maneet Ahuja, Forbes Staff}

John Paul DeJoria in 1980 invested his entire $700 life savings into a business selling new shampoo he developed with hair stylist Paul Mitchell. The duo chose the now distinctive plain white bottles with black lettering because they did not have enough money to pay for color inks. At the time sleeping in an old Rolls-Royce automobile, DeJoria pounded the pavement, selling his product in salons across Southern California. As the 1980s rolled on, the Paul Mitchell brand became a big hit with salons and their patrons who were willing to pay premium prices for high-end hair care products. DeJoria became a wealthy man and began to diversify into new ventures, like he did in 1989 when he co-founded Patrón Tequila, selling the brand to Bacardi in 2018 for $5.1 billion. In 2013, DeJoria appeared on Shark Tank and was part of an Emmy winning episode, where he invested $150,000 for 20% of a novel Florida irrigation company called Tree T-PEE. DeJoria is also a major investor in the House Of Blues nightclub chain. After his initial success as an entrepreneur, DeJoria also began investing in stocks and real estate, and learned a lot over the past four decades about how to maximize his returns while minimizing losses. Forbes recently met up with DeJoria, now 79 and worth $3 billion, at Utah’s Montage Deer Valley Resort during Goldman Sachs’ “At The Helm” private wealth management conference.

Forbes: How did you get your start in investing?

John Paul DeJoria: I got my start investing as a little kid. I was around 11 years old and had a paper route. I found out I could open a savings account, so I went to Citizens Bank in Atwater, California. I think I had $3. But other than that, I never had the money to invest. So when I really got started in investing, whether it’s in the stock market or real estate or other things, I was more into my 30s after Paul Mitchell was finally underway making some money. I figured that I’m making enough money now, how do I preserve some of that for the future. What you should do in life to be successful is when you start making money, don’t do what so many people have done—they start making money, they feel it’s never going to end. Then the next year, it’s not coming in and they’ve already mortgaged their future with debt.

Before I made any investment, I made sure I had enough money in the bank for six months of every bill I had—movie theaters, popcorn, gasoline, insurance, every cost—so I knew if anything went wrong, by gosh, I’d be okay for at least six months.

The next thing I would tell investors is to realize you are the best investment you could ever make in your life. If you can invest in yourself, in education or something that’s going to benefit you or your family, that is the…