Sunday 16 June 2019

I lost €15m and fought back

I know what it's like to make a million euros in a day. I also know what it's like to lose 10 times that almost overnight, writes John McGuire

John McGuire rented out his house and set up home in his office
John McGuire rented out his house and set up home in his office

John Maguire

I used to think I had the mental strength to deal with what- ever life could throw at me. I needed less sleep than almost anyone else, I worked harder, I was fitter, I was mentally tougher.

I would do things other people were not prepared to do, just to prove a point.

At the starting line of the Berlin Marathon, I chain-smoked five cigarettes while rubbing Tiger Balm into my legs. You should have seen the faces on the Germans -- me with my Irish flag and a smoke in my mouth.

I used to joke that only two things would survive a nuclear winter: cockroaches and me.

I set up a mortgage brokerage, First Credit, in 2002, when I was 29. By 2007, I had acquired numerous properties, and First Credit was organising more than €130m in mortgages a year and was making a gross profit of more than €1.4m a year.

I had just invested in two new companies, I had a net worth north of €10m and I was making a decent year's salary every month.

Then came the crash. Boom. The pendulum swung. By 2010, I was worth minus €4m and was losing €10,000 to €15,000 every month for nearly two years.

I had seen a 95pc collapse in my main company and therefore my main income. I had become a millionaire early on, then a multi-millionaire in my mid-thirties.

I know what it's like to make a million euros in a day, and I know what it's like to lose 10 times that almost overnight.

I know what it's like to stare at the ceiling every night for months and months on end, unable to sleep, because you can't balance the books.

I don't think it's right to take on the responsibility of an employer and a major borrower and accept the riches from the good times, but not be prepared to do everything an average person would not do to keep things afloat.

My focus through 2009 and 2010 was survival, plain and simple. Try to get back to profitability and replace my businesses that were decimated with new ones that would survive and thrive in this new Ireland we're now living in.

So I took it on, I fought it. I invested and I survived, but for two years I just worked. I didn't read a book or pick up the guitar or do anything that was good for the soul.

For most of 2009, I was able to keep fighting, but then at some stage the realisation came that this was the new normal.

Since then, and up until recently, I've done very little of note on a personal level, unless you can count annoying your girlfriend (which is quite good fun).

I made the decision to keep investing in new ventures and servicing my debt when I could not afford to do either.

The really hard bit is investing and spending money when you're losing money. You question your decisions every single day.

The smart thing would have been to take my spare cash and move to my mortgage-free place in Dubai with its private beach.

I put my plan together. It involved gambling everything I had on three new companies and two sites that I knew would eventually be profitable.

I sold everything that was not nailed down, then reviewed my positions. My monthly income was still at least €10,000 less than I was spending.

I had loads of vacant offices with no takers and I was living in a house that could command between €2,000 and €2,500 per month. So I advertised my home for €2,300 and decided if anyone paid me €2,000, I'd take it.

Three weeks later, someone else offered me €2,000. I don't think I have ever been so dejected to get an offer on a property. But I had made a deal with fate.

So I rented out my house, moved into one of my vacant offices and worked on rebuilding what had fallen. I spent the guts of 2010 living in a 200-odd-square-foot room with no kitchen, that I basically converted into a bedsit.

I guess I made it cosy enough. I moved out the office furniture and replaced it with a TV, couches and a mattress. Could have been worse -- at least it wasn't a Holiday Inn.

I still had very loyal staff but the income of the company was always less than the outgoings, and when it came to the end of the month I would have to withdraw savings to pay the shortfall in my mortgages, loans and business expenses.

The stress started to really take its toll towards the end of the year. By Friday evening, I would need four or five drinks before I could relax enough to talk. The only people I really wanted to meet were my brother Mike or Karen, my girlfriend.

I stopped caring about my appearance. I stopped keeping in touch with friends. My brain was skipping around so much, I wasn't able to relax long enough to read a book or watch a movie.

A lot of business and property people committed suicide at this time. I can understand the dark places your mind can get to when this unrelenting pressure is there and you can't see a way out.

Add to the mix a €10m insurance policy sitting in the bank, six months or a year without a proper night's sleep, a few children, school fees coming in, and the mind can start to see things in grey that are black and white.

I thought I was tougher than everyone, but when you take away a man's income, his car and his home, it can chip away at your confidence. And it started to wear me down. I started calling the office I'd moved into 'the cell'.

"I'm going back to solitary," I used to joke. Most of the time I was confident about what I was doing, but sometimes my head would get the better of me.

"Well done, you champion. How the f*ck did you manage to piss away €15m? Well done! Thirty-seven years of age, insolvent and living in a f*cking office."

Looking back now, the hardest part of it was not getting any sort of a break. As the office and home were essentially the same thing, I never got away from it.

I can say now with some degree of certainty that for the moment anyway, I have survived the recession. It took a severe toll on me. It has taken two years that I will never get back.

They were two years of the most awful stress, but it's true what they say. You do learn more from your mistakes than from the things you get right.

I now have a thriving commercial insurance brokerage called Pembroke Insurances. First Credit no longer specialises in mortgages. It's now First Credit Insurance.

Quotedevil.ie is my online low-cost car, home, van and health insurance provider. This company, I believe, will be my biggest ever.

I've opened the nicest bar in Dublin: Dax Café Bar, which is First Credit's old boardroom. The day we opened the bar, we had 15 customers. The next day I walked in and could not get a seat.

I have 40 staff now, and expect to create at least another 20 jobs over the next six to nine months. Hopefully, I'll get back to paying myself a decent salary, too!

I have seen the good, the bad and the damned ugly and lived to tell the tale. I hope to be able to impart some of the lessons I have learned to you.

And let me say this: I firmly believe that we are now being presented with the greatest opportunity of our lifetime, if we only have the balls to take it.

'Sorted! How to Survive and Thrive When Money is Tight' by John McGuire is published by Penguin Ireland and out now, €15.99

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