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Our How to Manage Your Money series aims to find out how people in the UK spend, save and invest their money to meet their costs and achieve their goals.
This week we talk to Andy Scott, 45, who lives between London and the south of France. He has a 3-year-old son, Elton. A self-made millionaire, Andy lived a life of luxury in his 20s, building an empire of real estate, hotels and bars. However, the 2008 global financial crisis occurred and he lost £6 million. Andy has bounced back and is now buying and turning struggling companies around. He would rather have a second career as a politician than become a billionaire.
monthly budget
My income: I withdraw the minimum amount of money I need from my company every month. Typically this is around £10,000. I’m in the refurbishment business and sometimes we incur losses, especially in the first year of ownership. I cannot withdraw money from a company until it is profitable and has a sufficient cash buffer.
My monthly expenses: I pay £6,000 a month for a three-bedroom flat in Marylebone, central London. My assistant organizes individual bills. My son has a nanny at a cost of £100 a week. Other major monthly expenses include: £600 for my son’s nursery. Eating out, £200. Boxing training, 250 pounds. 2 gyms, 100 lbs. And my mobile phone, £100. I usually spend around £2,500 a year on clothes and buy them in the January sales.
I grew up in Portsmouth, but I didn’t come from a wealthy family. I was raised by a single mother and worked full-time as a bookkeeper. I got a scholarship to attend an average private school, but I was more socially intelligent than academically. I was good at music and earned money by playing the church organ at weddings and funerals.
While still a teenager, I got a job working the door at a large nightclub. You’ll work 3-4 nights a week and earn around £7.20 an hour. During that time, I worked on paper rounds from 3 a.m. to 6 a.m. and worked on construction sites during the day.
When I was 18, my grandmother left me £5,000. I took out a £40,000 mortgage and used my salary and inheritance to buy my first property from one of my nightclub doormen. With their help, I renovated the property and sold it a few years later for a profit of £30,000. Over time, I started building a real estate portfolio.
I was 26 years old when I earned my first million yen. I was very lucky because between 2000 and his 2007, the real estate market was increasing by 20% per year. You can lose money on a construction project, but still make money in the market. I built over 250 homes for him in his 20s and thrived on the back of easy financing and double-digit home price increases for him.
I lost £6 million in the 2008 global financial crisis. The bank called in all my loans for multiple real estate projects and a hotel group. All loans were personally guaranteed by me. I had never experienced economic cycles or recessions before, so I was caught with my pants down when the economic music stopped. My email signature at the time was “Andy Scott: Bankrupt Fat Fail.”
I think the banks were stupid too. They should have let developers like me finish the half-baked apartment blocks. At half-complete it was worthless, but banks panicked, cut their losses and brought in all the development loans. If the site had been completed, the apartments could have been rented out until the market recovered. Banks will give you an umbrella before taking it away when it rains.
His hotel was repossessed and he beat the bailiff who brought him home. I was arrested but quickly released after doing 100 push-ups in my cell in an expensive Armani suit.
Then I got depressed and got hit by a taxi in America, which was a real wake-up call. He broke both of his legs and suffered head injuries. I lived on people’s couches, went broke, and couldn’t work because of an injury.
Gradually, I returned to working and managing construction sites. They also saw an opportunity to convert old abandoned buildings, such as churches and theaters, into nightclubs that could seat 1,000 people. The club was doing well and brought in a large amount of income each week. I didn’t want to stay in the nightclub industry for too long. I’m happiest sleeping by 10pm rather than 10am, so I quickly sold out and started developing property again. I got back on my feet around 2014.
Having lost everything in the past, I found an opportunity to work with others who were struggling in business. I run his REL Capital Partners, which owns 12 of his companies that make over £20 million a year. Restructuring can be difficult because it needs to be sustained over the long term and often requires an initial injection of capital. I don’t find the idea of withdrawing or selling out appealing. I would go crazy if I sold out and sat on the boat all day.
I am still a home builder, and I still restore and charter yachts and keep them as long-term investments. I just acquired a 200 foot cargo ship and am going to convert it into a 6 bedroom house with a pool. Finding a place to transport it along the Thames is going to be the difficult part.
I do not own any property in the UK. Paying a huge mortgage when you’re not in the UK all year round can be heart-wrenching, and the rental yields are disastrous. I rent a flat in Marylebone, central London, for £6,000 a month. I tend to work hard in the winter, so I can have fun in the summer. I have a villa in the south of France and I like to spend my summers there.
I bought a house in France in 2017. It was her four small apartments that she slowly renovated into one five-bedroom house for her with a pool. It is located between Cannes and Saint-Tropez and was purchased for approximately 450,000 euros. Now it’s worth twice that.
I don’t consider myself wealthy. I consider myself an architect and grafter from Portsmouth who gets shit done. I am keenly aware that money comes and goes. I don’t like flashy things anymore and I don’t care what other people think. I don’t have a Rolls Royce anymore, so I prefer classic cars. I would like to buy one a year because it becomes a work of art when it runs out of fuel.
I’m an instrument rated pilot and used to fly cheap 40 year old airplanes myself. I didn’t want Elton on board because it started to feel unsafe. I sold it last year, but a month later it crashed into the ocean off the coast of Jersey. The two friends on board the plane were uninjured and were rescued by the RNLI. Health is your asset!
Time is the one thing we can never get back. I travel a lot, so sometimes it’s difficult to meet my partner. I am now spending more time in the UK as I want to settle down and spend more time with my son. I want to have more children with the right partner and be willing to be a stay-at-home dad between contracts. I also want to do more for people, and am considering a second career as a politician. I would rather design government policy and earn less than £100,000 a year than be a millionaire.
Want to join us on How to Manage Your Money? Email money@inews.co.uk
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