We do have the true rags to riches story but I haven’t often taken time out to reflect how within 25 years we achieved such fortune.
What I have always known was there was no luck involved. It was not luck that bought us to NZ from Hong Kong as kids. It was because our parents had the foresight to emigrate while we were young enough to learn a new language and adapt as locals while still young.
And it was nothing to do with luck that our parents had the discipline to save up to open a takeaway shop that was actually ahead of its time by opening 24 hours. We did not know at the time but they had a deliberate plan that involved me and my brother working up to 12 hour shifts while trying to study. We were learning the lessons of discipline, the value of money, the need for education and that hard work can provide financial reward.
We initially hated it. Our mates were out having fun but we were flipping burgers at 3am. But then something almost magical happened. We realised we now had saved enough money to buy nice things: a nice car, clothes and stuff, while still managing to save most of our hard earned pay. Now our mates were asking how come we had nice cars. They had not noticed the seven days a week we were working but now they were noticing the spoils.
And before we knew it we had enough money for a deposit on our first building. We were starting to feel bullet proof. While our peers were still on struggle street we were the owners of a building in Courtenay Place Wellington. But then came one of many valuable lessons. Only idiots celebrate owning a highly geared building with no tenants, while having convinced their parents to mortgage the family home as security.
We fell hard and lost the family home. But it was one of life’s tough lessons that shaped us. We decided as a family we could live in the building while working hard to pay off the bank. In a way we were possibly unwitting pioneers of the central city apartment trend. But we got through it, found a tenant, made the bank happy and made Mum and Dad happy by buying them a new home. We then geared up the building by just enough for a deposit on a second building, and so the expansion of our commercial property portfolio commenced.
We also learned not to worry about lack of tenants. If we could not find a tenant for a particular site we would do our homework and identify a gap in the local market. That was the strategy that lead us to owning a nightclub, a gym, a food court and a serviced office business. But only fools would think that making a fortune from property is as easy as repeating what was working well. When things were going too well it was our signal to change. So when the madness set in and every man and his dog were buyers, we became sellers, cashed up and waiting for the inevitable downturn so we could swim against the tide again and become buyers.
We also knew that the “eggs in one basket” approach to wealth creation was dangerous so we looked around for other options to complement commercial property. Why not invest in residential property as well? So we did, covering both bases as a builder through the Stonewood Homes franchise network and as a lender to residential developers.
But the commercial property trends were changing, some forced by earthquake risk, so we had to have a contingency plan. Well, tourism in NZ is a major player in our economy and tourists need hotels and NZ has a shortage. But to build from scratch is dangerous, so we targeted retrofitting office buildings. We are now on our fourth such venture with two more buildings now owned and being readied for hotels 5 and 6.
We’ve now got commercial and residential property investment strategies in full force but there is only so much growth you can achieve with your own money and bank loans, so the third of our three-pronged approach to further wealth building is to attract private investment. This is a relatively new initiative for our Group and we are still in development mode but we have a plan and its quite a simple one: a $2B private equity fund by 2023.
We do get annoyed when we hear people saying that the Chow Brothers have been lucky to get to where we are. There is no luck involved at all. Hard work, hard decisions, hard lessons learned, but no luck. We leave matters of luck to when we treat ourselves at the Casino.