‘Don’t aim to get rich quickly – aim to get rich slowly’
Continuing our series on success stories, Mike Pero explains how his $1500 investment became $15 million by 2004.
Christchurch-based real estate entrepreneur Mike Pero says he made his first $1 million without realising it. ‘‘It would have been around 1997, I’m guessing,’’ Pero said.
Pero founded Mike Pero Mortgages in 1991, which is now owned by Australian company Liberty Financial. He also founded Mike Pero Real Estate, where he is still chief executive.
A $1500 investment to start his business in 1990 rolled into $15 million by 2004, Pero said.
‘‘The mortgage company had been going for about seven years and I had sold a 50 per cent share to South Canterbury Finance, founded by the late Allan Hubbard,’’ Pero said.
The then-largest New Zealandowned finance company eventually collapsed – triggering a $1.6 billion bailout.
But Pero said money loaned from SCF allowed him to grow his business from a small ‘‘Ma and Pa’’ operation to a national scale. ‘‘I had no idea of the value until I came to buy them out around 2003.’’
At that point, Pero said, his business was worth $10m. ‘‘I was gobsmacked.’’
He later sold the company for $15m.
‘‘A $5m gain, almost overnight, seemed like a reasonable proposition.’’
Pero said he had a set of rules he ‘‘subconsciously’’ stood by.
‘‘I know that everything that glitters is not gold. I never make assumptions. Plan for the worst, hope for the best and take what comes.’’
Pero said his advice to a young entrepreneur was to plan carefully and prioritise time by ‘‘picking the lowest-hanging fruit’’.
‘‘Read books from those that have done well especially people like Warren Buffett, Sir Richard Branson, Sir Michael Hill and others but at the same time don’t think that getting rich is going to be a walk in the park.
‘‘It’s a long and winding road with snakes and ladders along the way.’’
Pero’s worst investment? Airlines, he said.
‘‘I’ve done it twice, 16 years apart. Thought I learned from the first time – I didn’t. Passion overtook logic.’’
Before his life in real estate, Pero was training to be a pilot for Air New Zealand.
His first investment in aviation was in 2004, when he bought a 25 per cent stake in regional airline Origin Pacific.
But he quit the board just 10 months later and lost about $3m when the company collapsed.
He also tried to charter a flight over Mt Erebus in 2009 for friends and family of Erebus victims, but Air New Zealand slammed the idea.
It was important to know when to stop investing.
‘‘I would probably refer to it as gambling or greed. Invest your money wisely. Easy come easy go.
‘‘Don’t aim to get rich quickly – aim to get rich slowly. Those that earn their millions tend to hang on to them.
‘‘Those who win Lotto tend to lose it almost equally as quick.’’
Money did not buy happiness, but it sure helped.
‘‘Money does help provide a better standard of living and help relieve stress. After all, it’s one less thing to worry about.
‘‘Sometimes I feel average and sometimes I feel poor. Depends who you are around. I was recently in Malaysia and hearing some of the daily incomes made me feel sad for them and made me realise how lucky I am and how lucky we are in New Zealand.’’