Wealth

Barbara Corcoran: A $320 coat was the ‘best investment I ever made’ at age 23—’it changed my life’

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When Barbara Corcoran started her real estate firm at age 23, she quickly noticed a difference between herself and her competitors.

“I realized that everyone successful looked the part,” Corcoran, now a 74-year-old millionaire investor, said in a recent TikTok video. “At the time, I was still wearing my old navy blue pea coat from New Jersey, and knew it was going to be a while before I could afford a new one.”

When she managed to rent an apartment to someone during her “first week in business,” she knew exactly what to do with the money, she added: “I put the $340 dollar commission check right in my pocket. I ran right over to Bergdorf Goodman to buy the fanciest coat in the store.”

Corcoran bought a wool coat with a brown and white print, high collar and a $320 price tag before tax, she said. Adjusted for inflation, it would cost about $2,235 today. Despite its hefty price, Corcoran says the coat gave her the one thing she “desperately” needed at the time: confidence.

“My new coat made me feel just like the big deal I hoped to become,” she said. “I wore my coat for the next four years, and it was the best investment I ever made. In my coat, I worked like crazy to become as successful as I already looked.”

Corcoran’s heightened self-esteem points to a larger psychological influence that clothes can have on a person called “enclothed cognition,” a term coined by psychologists Adam Galinsky and Hajo Adam. 

Their 2012 study of 58 students found that the subjects were more attentive and completed tasks with fewer mistakes when they were given a lab coat to wear, which, for most people, “signifies a scientific focus and an emphasis on being careful and attentive,” the pair wrote.

It’s always worth considering whether or not you will wear something frequently enough to justify the price tag before making a splashy clothing purchase, as opposed to renting it. In Corcoran’s case, she seems to have gotten good value out of the pricey purchase by wearing it regularly for several years.

The confidence boost clearly worked for her, too. Nearly three decades after founding her firm, Corcoran sold it to brokerage firm NRT for $66 million.

“The lesson I learned, and I never forgot, was that perception created reality,” she said. “Not the other way around. You’ve got to look the part of who you want to become.”

Disclosure: CNBC owns the exclusive off-network cable rights to “Shark Tank,” which features Barbara Corcoran as a panelist.

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