Billionaire John Paul DeJoria says there's one thing to do before investing or starting your own company

Born into a poor immigrant household, John Paul DeJoria had very little from day one.

He spent time in a street gang as a boy, lived out of his car for a while, and even resorted to collecting discarded bottles to cash in at grocery stores in order to support his 20-some self and 3-year-old son.

He would go on to build Patrón tequila and John Paul Mitchell Systems hair products - which led to an estimated $3.1 billion fortune.

When Business Insider asked what money advice he'd give his younger self, he said: Create a cash cushion.

"Before investing or starting a company, make sure you have enough money saved for at least six months to pay bills or anything else that might come up financially," DeJoria told us.

"It's important to have a cushion of six months financial back-up before you invest or if something doesn't work out in your favor."

Not setting aside money in an emergency fund is a common, and costly, mistake. While it's easy to ignore the possibility of losing your job, a failed business, or a medical emergency, these are all scenarios that could quickly become expensive realities.

Everyone should build up an emergency fund, but having an accessible cash cushion becomes even more important if you're planning on investing or are considering the entrepreneurial route, both of which involve a higher level of risk.

Most experts, including DeJoria, agree that it's smart to have six months worth of savings tucked away, but you may need more or less depending on your situation.