Wouldn’t it be fascinating to spend one day in the life of a billionaire? How about three?
Earlier this year, I had the incredible opportunity to play shotgun in the daily life of John Paul DeJoria—co-founder of haircare empire John Paul Mitchell Systems and beverage company Patron Spirits—for my new CNBC series Follow the Leader. (And yes, it was everything you would imagine and more: private jets, a personal chef, fancy cars, fine dining and even a blinged-out bomb shelter.)
But to say DeJoria was an inspiration to be around, as well, is an understatement—he went from homeless in his early 20s to become one of the world’s wealthiest people, with an estimated net worth of $3 billion. Even now, at 71, he’s still thinking about launching additional businesses. Here are four lessons I picked up during our time together that can be effective wherever you are on your financial journey.
Don’t worry about being a “boss.”
I happen to love the word boss—to me, it implies strength in leadership—but when I asked DeJoria what kind of boss he is, he quickly dismissed the notion. He explained that the word “boss” reminds him of his early career days as an employee for a haircare company, working for managers who were tyrannical and unkind.
He vowed to never be like them, and to this day, whenever he delivers criticism, he does so carefully by first offering a compliment, then the suggested improvement, followed by another uplifting and inspiring word. He attributes Paul Mitchell Systems’ low employee turnover—since he founded it in 1980, he says it’s been less than 100 employees—to this respectful approach.
Being empathetic, and using kind words and a respectful tone even when you need to deliver criticism, can be effective in situations outside the office, too. (Think about negotiating a better rate on your cell phone bill when the service has been spotty or any type of negotiation, really, in which you’re trying to get more for your money or be refunded for less-than-stellar service.)
Reduce decision fatigue.
DeJoria has established a number of daily routines and systems that allow him to waste little time on recurring decisions, like what to eat and wear, and skip straight to more important choices. For instance, he primarily sticks to a uniform of a black jacket and black pants—thus reducing morning “what will I wear today?” inner debates—and his at-home personal chef caters to his dietary needs and tastes. (He’s a big fan of fruit smoothies and vegetarian dishes.)
While hiring a personal chef certainly isn’t in everyone’s budget, you could eliminate decision fatigue around food by always reaching for a Greek yogurt (and varying the toppings) in the mornings or sticking with a salad for lunch. Even better: You can take repetitive decision-making out of the equation in your financial life by automating good habits like saving, investing and shopping in bulk.
Avoid unnecessary debt.
When DeJoria was launching Paul Mitchell Systems with his friend in 1980, a $700 loan he’d been counting on fell through. He ended up asking his mother if he could borrow $350. That, along with $350 from his business partner Paul Mitchell, helped the two buy the initial haircare inventory they needed to start selling door to door…to door to door. A lot of rejection ensued. But DeJoria and his business partner didn’t give up. He was intent on making the business profitable. After all, he owed his mother money!
In hindsight, DeJoria is thankful the loan never came through. It encouraged him to take matters into his own hands and helped him avoid taking on additional debt. Since that day DeJoria has refused to take on debt. He told me he proudly runs his operations on cash.
Watch your money.
When you’re worth billions, you’d think it’d be easy to feel like there’s always going to be more where that came from. But DeJoria makes a conscious effort to pay close attention to his financial accounts. In his home office, I watched him carefully open bank statements and review his checking and savings balances. He even dialed Vanguard himself. (Needless to say, I’ve never seen a checking account balance as big as his.)
From day one, DeJoria struck me as someone who values direct contact in business and life, and that includes being in close contact with this finances. That’s a crucial habit for anyone trying to build their net worth.
Photo Credit: Lisa Singer/CNBC