Mortgage king believes work ethic is key

16:00, Jan 25 2014
Mike Pero
MIKE PERO: Credits his success to hard work.

His mortgage broking and real estate businesses have made Mike Pero one of the most recognisable businessmen in the country. But his success has not changed his views on money and hard work, he tells Greg Ninness.

Did you have much interest in money and financial matters as a child? Did you know how much was in your money box at any one time?

No. Right up until my late 20s I had little interest or understanding of money. All I did, like a lot of people, was live hand to mouth. I got my first hire purchase when I was 15 to buy a motorbike. A Yamaha RD250.

When did all that start to change?

I started the mortgage business in 1990. It was a small one-man band. The rest is history I guess.

Did you have any idea then what you were getting yourself into?


I had no idea. I couldn't comprehend having more than few thousand dollars in my bank account. That would have been a dream come true.

At that stage I'd left my airline job. I was working for Mt Cook Airlines in Auckland. I was a pilot and was training to be an Air New Zealand pilot. I was on the list for interviews in 1990 and the whole market changed when [Boeing] 747s came out and there were a lot of redundancies.

So I turned to a completely different career.

How did you get the idea for the mortgage broking business?

I'd sold life insurance in the 1980s and I thought I'd return to that. The insurance company I went to was doing mortgages and I thought, well, I could do that. Not through insurance companies but through banks.

How financially established were you at the time?

I already had two children. I had both children quite young. I got married at 21 and my first child at 23.

When I was 30 I was quite well established. But my flying career had cost me my marriage because I spent half my time in Auckland instead of [at home in] Christchurch. So I had nothing really and at 30 I had to start again from ground zero.

I suppose it was a good business to start up because you wouldn't have needed to buy stock or rent premises.

No, I didn't need to buy a container load of mortgages. It was just my own resources. I got my message out to all the real estate agents that I could help them close deals by providing money options. And they loved me. They'd bring their customers to me and say can you do this or that?

As you got the business established, did you start to feel financial pressures that you thought might overwhelm you?

No. I don't want to make it sound easy. It was one step in front of the other and the business grew. I don't recall any major pressures.

Are you all over the finances of your business or do you rely on experts for that?

My strength is marketing, but between me and my CFO, who sits about four metres away from me, we have a good understanding of where we are heading and what we are doing.

Have you had any financial disasters?

Yeah. I have. One in particular that cost me a lot of money. It was a small airline [Origin Pacific]. But you get knocked down and you get up again. I lost millions in that, but within three years I'd made it all back again through another business, a start-up business - Flight Experience and Pacific Simulators. We took that from nothing to a multi-million dollar company within three years and sold it.

Do you pay as much attention to your personal finances as you do the businesses' ones?

Yes, I'd have to say I do. The last five years as we went through recession, I was not exempt. We all went through hard times.

People might think you've invested most of your money in property. Is that right?

Yeah, most of it. I'm not into the sharemarket. I stick to what I know well. I don't have time to focus on it but I understand property and that's where I invest my surplus cash.

Commercial or residential?

Either, or. I just see what's going at the time and if it excites me I get involved.

How would you describe your spending style?

I'd consider myself quite conservative. I'm quite frugal, I don't live an extravagant life. I do OK but I don't have flash cars. Our cars are five or six or seven years old. I don't have luxuries like some people would think.

Do you try and pass on financial skills to your own children?

My kids, when they come to me and ask can they have some money, I say sure, what do you want to do to earn it? I do not give my children money. My children get treated harder than most kids. One is in business by himself, in a marketing business. He does really well and contracts back to me. Obviously we are a family, but we treat it as a business relationship.

Did you get that treatment when you were a child?

Yeah, I did. I had three jobs to buy that first Yamaha and that was hard work.

Did your parents expect you to do chores for your pocket money and stuff like that?

Hell yes. And I really appreciate it, because right through my life I've understood about earning money and not just receiving it. My daughter is looking for support for her university fees. And I said that's great. Let's sit down and work out how you are going to work your way through university. There's no way I will give her money.

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