Coelho was born in Rio de Janeiro, Brazil and attended a Jesuit school. As a teenager, Coelho wanted to become a writer. Upon telling his mother this, she responded, "My dear, your father is an engineer. He's a logical, reasonable man with a very clear vision of the world. Do you actually know what it means to be a writer?" At 17, Coelho's introversion and opposition to following a traditional path led to his parents committing him to a mental institution from which he escaped three times before being released at the age of 20. Born into a Catholic family, his parents were strict about the religion and faith. Coelho later remarked that "It wasn't that they wanted to hurt me, but they didn't know what to do. . . They did not do that to destroy me, they did that to save me. " At his parents' wishes, Coelho enrolled in law school and abandoned his dream of becoming a writer. One year later, he dropped out and lived life as a hippie, traveling through South America, North Africa, Mexico, and Europe and started using drugs in the 1960s.