Power Players

'Shark Tank' star Daymond John's first splurge was a huge mistake—here's what he learned from it

Daymond John
Gonzalo Marroquin | Getty Images

The stars of ABC's "Shark Tank" are self-made moguls, and after getting their first taste of wealth, they were not shy to about splashing out. Robert Herjavec for example, spent $6 million on a private plane. Shark Daymond John's first splurge was no exception, and it was jaw-dropping, even by the Sharks' standards. 

After he had his first financial success, John recalls he went house-hunting in Miami and may have gotten a little carried away.

"I bought a couple of houses at the same time," John tells CNBC Make It during an interview promoting his partnership with Mattel on Silicon Valley Startups — an improv card game where players act as entrepreneurs pitching funny start-up ideas investors.

"I went to Miami to go shopping, and I bought two houses. They were like, 10 blocks away from each other.

"One on was a condo, and then I realized I wanted a boat, and with the condo, I didn't have a marina," John reasons. "So, then I needed to buy a house on the water, so I could buy the boat."

John recalls the extravagant financial mistake with a laugh.

"Oh did I learn from that experience," John says. "I got my a-- handed back to me, yes I did."

Indeed, John told Parade magazine that when he first came into money, he bought six or seven houses (two of those being the Miami digs in close proximity). John came from humble beginnings, and grew up New York City. His path to success included hustling biscuits and chowder at Red Lobster and being rejected by 27 banks in the early days of his clothing company, FUBU.

John launched FUBU in 1992 with just $40, but with grit and tenacity, grew it into a $6 billion fashion brand. In 1996, the company was on the brink of collapse, but John had a breakthrough and landed a partnership with a Samsung executive. By 1998, FUBU was doing around $350 million in annual sales.

During the decade that "Shark Tank" has been on the air, John has landed a number of lucrative deals and skyrocketed to entrepreneurial stardom.

He learned an important lesson from that frivolous first splurge: "You can't sleep in two beds in one night, and you just don't need it," John says. "My friends and everybody else enjoyed the houses more than I did."

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Disclosure: CNBC owns the exclusive off-network cable rights to "Shark Tank."

Kevin O'Leary's advice to his 20-year-old-self: Don't buy all that cr-- you don't need