- Daymond John is known for investing in young entrepreneurial hopefuls on ABC’s Shark Tank. The FUBU founder and self-made entrepreneur has a strong belief that you don’t need money or connections to get ahead.
Most people seem to believe that you need money—a hefty leg up from rich parents, or connections in the right industries—to be successful. That’s according to Daymond John, legendary entrepreneur and investor and a judge on ABC’s Shark Tank for the past sixteen years. (He’s the Shark who invested in Bombas socks and Ring doorbells, two of the show’s most lucrative deals.)
John is quick to dispel this notion as entirely wrong. “Literally nothing can be further from the truth,” he told Fortune in a recent interview. “You don’t need money to make money. You do not.”
To illustrate his point, John then pointed out the fallacy when it comes to people who fell into great wealth—and then squandered it.
“Why would 65% of athletes and lotto winners go bankrupt three years after leaving the league or winning the lotto?” he asked. “Why are the top 1000 wealthiest people in the world self-made men and women?”
Self-made success
John says that you make money by being creative and building community. Additionally, having a large amount of money at any given point is hardly a guarantee of long-term wealth, as many wealthy businesses have gone bust.
“If you needed money to make money, well then, we can call Kodak and Blockbuster and Blackberry and Red Lobster and Friday’s to see how that’s working out for them,” he stressed.
John should know. The millionaire made his name—and his fortune—with his streetwear brand FUBU, which he founded in 1992. By its 1998 peak, FUBU had grossed $350 million in sales. That was a hard-earned success for John, who spent “five or six years” waiting tables at Red Lobster as he was building the brand.
“Working at Red Lobster taught me about the ability to sell, and the value of being very meticulous,” John recalled. “The job taught me about how to treat people, how management works, and how you can enter into a large organization. 95% of people don’t care. And the 5% that care, they can move their way up the ladder.”
Investing before you spend
John’s thoughts on the impermanence of capital are reflected in his approach to investing, which he’s impressed upon his kids and written about in a children’s book.
“If you have $3, $3 million, or $3 trillion, the first dollar goes for what you have to pay for,” John told Fortune. Those are the necessities like rent and utility bills or medical payments. The second dollar should be invested, into anything from “a book, into a business, or into the public market.”
The third dollar can go toward fun. “Buy what you would like to have, but don’t have to have,” John said. “And if you don’t want it, put it back in number two. And over the years, number two will start flowing into bucket number three and number one. And that’s how you really simply look at things.”