Farnoosh Torabi: Is it true that you had doubts about [Project Runway] when you were originally asked to be a part of it? And I also read that you didn't get paid the first season, is that true?

Tim Gunn: I received a cold call in my office at Parsons at that time [when] I was chair of the department of fashion design. It was a cold call from two of the producers of this new show. They said that they were looking for a consultant. And I said, "Fashion reality?" I said, "This industry has enough trouble without that."

I really didn't want to meet with them and they said, "Just give us 10 minutes." I had written down their names and I Googled them and I found out that they were the Project Greenlight producers. I thought, "Well they have a seriousness and integrity. So this could be interesting."

When I found out that they wanted to work with real fashion designers, I was instantly placated. My role on the show was in no one's vocabulary at that time. It happened days before the designers were arriving and no one said this to me but I just conjectured that the producers were afraid that the designers would go to the workroom and no one would talk, they would just work, work, work. But by sending me in or someone like me in, just to probe and to query, they would be assured of some conversation.

At the same time, I never dreamed I'd be in the cut of the show. I thought, as long as they have the designers responding to me, no one needs to see me, no one needs to hear my voice and you're quite right, the first two seasons I wasn't paid at all and I didn't know that people were paid for reality television.

I was at a GLAAD Media Awards dinner in Los Angeles and this gentleman came up to me and introduced himself and he asked me, "Who represents you? I said "No one." He said, "You have no representation?" I said, "Well, why would I need representation?" He said, "Contracts, payments." I said, "The only payment I got is from Parsons School of Design and no one's going to need to negotiate that and it's not like I'm getting paid for anything." And he said, "They're not paying you?" I said, "No, it's reality television." He said, "We need to talk."

He has been a godsend.

FT: Tim, you spent many years as a teacher and college administrator. It wasn't until age 50 that you embarked on this world of television and the red carpet and best-selling books. In what ways have you grown by all of these relatively recent experiences and what are you learning about yourself as you amassed all this fame and fortune?

TG: I have to tell you, I never expect [people] to know who I am. I'm on the subway a couple of times a day and I walk the streets of New York constantly. I'm surprised when people say hello. But I will say they're lovely. It's a huge honor to believe that I'm a positive role model.

I'm now 62 so this happened 12 years ago. This whole phenomenon is so surreal for me. I still have difficulty wrapping my brain around it.

I feel so lucky, so fortunate, there isn't a single day I don't thank my lucky stars. And I think part of it comes from having spent most of my life as a pauper educator. I mean I worked tremendously hard, I loved my work and it was so fulfilling, and I never dreamed I'd be a teacher, but it happened and then it ended up sticking.

I'm always talking about life's serendipitous path; you don't know where it's going to take you and you need to be ready. You need to be ready to seize opportunities and when something is percolating in front of you or besides you, you need to be ready to nurture it just to see what it might become because you just don't know. Otherwise we're just stagnant and nothing happens to us.

FT: You totally took a leap of faith with Project Runway. You were unpaid for two seasons.

TG: I never dreamed there'd be a second season, never. I mean Runway had a very rocky beginning in many ways. The producers and I had quite a number of conflicts and I'm happy to say that I won most of them. Among the conflicts, they wanted a sample room. They didn't think that the designer should make the work. They're going to do sample room with seamstresses and pattern makers and tailors.

And I said, "Wait a minute, if the audience doesn't see the designers getting real and metaphorical blood all over their hands, who would believe this? And who does Heidi [Klum] send home? If I were the designer I blame the sample room. I wouldn't accept responsibility myself."

FT: Now, on this show, guests often share with me their number one financial success story, their aha! moment, and it could be anything from a great investment to when they paid off all their debt. Maybe a time when they were able to be very charitable. What is one of your aha! moments?

TG: When I was, I refer to myself as a pauper educator, because I was. I mean even though I was running, having ended my academic career, I was running the largest academic department at Parsons and of the New School, the mother university, I was making nothing. Literally living paycheck to paycheck to paycheck and that's how I've spent my life, and amassing debts and my father died and left me, I don't mind sharing how much: He died and left me $50,000. This was in the '90s and it was a total surprise. I did not have the best relationship with him. In fact, my mother was even alarmed, "He left you what?"

I used it to pay off my credit card debt, which I then completely stayed out of debt and was committed to staying out of debt and then of course, well, reality television doesn't pay you a lot of money. It doesn't paying nothing but it doesn't pay a lot but I bought an apartment. I bought an apartment in 2009 when the New York market had just gone sour and I talked to my financial manager and asked, "You know I'm paying an exorbitant amount of money in rent. Do you think I can actually afford to buy something?" And he said, "Well, within the limits, yeah."

It's just business but the apartment has done nothing but appreciate. I took my 30-year mortgage and turned it into a 15-year mortgage. I thought, "I don't want the apartment to outlast me," and it's been just wonderful. I will also add, I have a wonderful, wonderful financial planner/manager who takes care of all my finances. Having been a pauper educator for so long and living paycheck to paycheck, I don't have a lot of wants.

I have basic needs. I certainly don't practice self-deprivation, but I don't take vacations, I don't have a second home, I don't own a car and never will, and I am responsible for my own wardrobe on any show that I do and I shop with a budget accordingly because I need a lot of clothes.

Farnoosh Torabi is a personal finance expert, the author of When She Makes More, and the host of CNBC's Follow the Leader and the award-winning podcast So Money.

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