Investment: Lord Cruddas founded his financial services company with £10,000 in 1989
On the day multimillionaire entrepreneur Lord Cruddas sold a stake in his company for £180 million, he enjoyed a glass of champagne with his wife – and then went straight back to work.
Now 69, Conservative life partner Donna Ferguson says the best year of his life was when he turned down £50 million for his financial services company, CMC Markets.
He still owns a majority stake, worth £700 million, and lives in a £42 million house in Mayfair – a far cry from the Hackney estate where he grew up.
What did your parents teach you about money?
Very little because we never had money. I grew up on a council estate in Hackney where we had to put money into a meter for electricity and gas.
My mom used to get up at 5am to go to work to clean the offices. My father was a porter at the meat market by day and worked in a pub by night. He was an alcoholic. So even though my parents worked three jobs combined, money was tight.
Every penny my father got, he spent on booze and flicker. There were always fights about how much money he would give my mother.
We never had a car and I never went to a restaurant until I was about 20. We didn’t have central heating, so we only bathed on Sundays when we turned on the electric heating. Instead of buying packets of cookies at the supermarket, Mom bought a bag of broken cookies at the market.
At that time there was no child benefit and it was considered disrespectful to claim benefits. I don’t think we even had free school meals. My childhood experiences taught me not to waste money and the importance of supporting your family. The lesson was: whatever Dad did, do the opposite.
Have you ever had trouble making ends meet?
I left school at 15 with no qualifications. That was a big mistake. I should have left at 14 – I wasted a year. I got a job in town, worked for Western Union, sent telegrams and cash payments. I lived with my parents in council housing near Liverpool Street and walked to work. It was hard until I got my first pay package. After that I would earn £7 or £8 a week which I would give to my mother. She would give me back half, which would get me through the week. I learned that money can change your life.
Work hard, get more money in your pocket and you get more choices and opportunities. Learning that was liberating for me and that’s one of the reasons I’m conservative. I think governments should let people decide what to spend their money on. I believe in low taxes and tax benefits to invest in pensions and your home.
What’s the biggest payday you’ve ever had?
The day I listed my company on the London Stock Exchange in 2016. I sold 25 per cent of the company and took £180 million with me.
To celebrate, my wife and family came to the London Stock Exchange and we all drank a glass of champagne after the shares were listed.
I then went back to work. By then I was rich anyway and had been successful for a long time. So I just got started with it.
What was the best year of your financial life?
It was 2000. That was the year I turned down a £50 million bid to sell my business. I was 100 percent owner at the time. You try to turn down £50 million when you come from nothing. I did have a few sleepless nights, but I had faith in my company.
Since then I have made hundreds of millions of pounds from the company. It’s now worth £700 million and I still own 65 per cent of it.
What’s your biggest money mistake?
I didn’t buy 10 per cent of Arsenal Football Club for £40 million when I got the chance in 2006. I turned it down. The club must now be worth more than £2 billion.
The most expensive thing you bought for fun?
I have watches worth hundreds of thousands of pounds, I have cars worth £300,000 to £400,000. But I’d say the most extreme thing I’ve ever bought for fun was a round of golf for £50,000, at one of the world’s most famous golf courses in the US with one of Britain’s best golfers of all time. I can’t say who it was, but he won the match quite easily.
I was a bit overwhelmed. But I’m jealous of all my friends at the golf club.
The best money decision you’ve made?
Starting my business with £10,000 in 1989 and keeping it under control.
In the beginning we were a boutique company. But in 1994 I read about the Internet. Thanks to my work at Western Union, where telegrams were sent from office to office using ticker tape machines, I immediately understood how powerful the Internet would become.
I saw how, instead of machines sending information from office to office, it could go from person to person.
So I invested in finding developers and started building Europe’s very first internet trading platform to buy and sell financial products. Now we have offices in 12 countries around the world and more than one million customers.
Treat: Lord Cruddas spends £100,000 on a skiing holiday at Badrutt’s Palace in St Moritz
Are you saving for a pension or investing in the stock market?
I used to save for a pension. My pot is maxed out right now – it’s probably around £2 million.
Since I own 65 percent of my company in stocks, I like to be a little risk averse with the rest of my personal wealth because I take a lot of risk in the company on a daily basis.
I buy and sell stocks and shares through my private account at Goldman Sachs and a few other banks, but I’m not an avid investor.
Do you own any real estate?
Yes. My childhood home is an eight bedroom house in Mayfair which cost me £42 million in 2016. I paid £5 million in stamp duty. I don’t care if it has increased in value or not. I don’t buy real estate to invest.
My ten bedroom country house in Hertfordshire cost £1.4 million in 1994 and I expect it to be worth £10 million now. I also own a five bedroom house in the South of France right on the beach.
What’s the one little luxury you treat yourself to?
A £100,000 holiday in the mountains in Switzerland in St. Moritz. I’m going for a week or ten days over Christmas, staying at Badrutt’s Palace hotel, skiing in the sun and going for a walk around the lake.
If you were Chancellor, what would you do first?
Eliminate inheritance tax. People might say, well, you’d say that because you’re going to leave your kids a lot of money. I live and reside in the UK and I pay millions in taxes every year. When I listed the company, I paid £50 million in tax.
I believe in paying taxes. It makes life easier. You can sleep at night. I don’t do dodgy offshore plans. My family doesn’t care if they pay inheritance tax or not, they will be well taken care of.
I would abolish inheritance tax because it penalizes people who work all their lives and have already paid taxes on the money they leave to their children.
Do you donate money to charity?
I founded the Peter Cruddas Foundation. The charity is funded by myself alone and over the last ten or fifteen years we have given around £20 million to over 250 charities. I like to help children from underprivileged backgrounds, so we have donated money to Magic Breakfast and The Prince’s Trust, for example.
What is your first financial priority?
To continue working. Even though I’m 70 this year, I’m not retiring. I don’t need the money, I want to work to live a happy life and help my children and grandchildren to improve their lives. I like working, I like my business and I like being in the House of Lords.
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