CFO Series: Peter O'Higgins (Revolut) on Personal Financial Management

Today I am joined by Peter O'Higgins, the CFO of London fintech, Revolut. Having recently raised $250M, Revolut are on a mission to provide a world beyond banking: a secure, mobile-based current account that allows you to hold, exchange and transfer without fees in 25 different currencies. I met Peter at their headquarters of 1 Canada Square in Canary Wharf. 

 

Peter, thanks for meeting me. In your words, what Does Revolut Do?

To talk about Revolut in an abstract way, we’re trying to monitise the fat that exists in the financial sector. The people that pay for the fat currently are the consumer. To get the best rates at the moment, you have to be wealthy. In my opinion, we are on a mission to help the little guy. We want to bring fair and transparent pricing for financial services, to everyone.

 Talk to me about your personal career

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I left Ireland in 1999 and I bucked the immigration trend and ended up in London. I wanted to try living outside of Ireland for a couple of years. I came here without a job and worked in a bar to begin with. I managed to get a job as a project accountant at Dresdner Bank. I hated it. I survived for a year and a half and then moved internally within Dresdner to the equity derivatives risk technology team. I did that for three and a half years and then moved to JP Morgan to do that for another 12 years. I worked in New York for 9 years of that; it was very cheap when I was there and the food was better. I used to go sailing in the harbour; I bought a Laser sailing boat and would go sailing round the Statue of Liberty (Wee Scot here: for those that don’t know, I am helpfully informed that a Laser is a one man boat that I am told capsizes a lot…).

I am a qualified management accountant starting the exams at Dresdner, and then finishing them at JP Morgan. I did all the exams and passed them; you then need to write up a resume of experience and you have 4 years to do it. Obviously I waited until 3 years 11 months and 26 days. I received a letter from the qualification body saying if I don’t submit my experience in the next 4 days then I would have to retake all the exams again. I took a couple of days off work and wrote up that resume as fast as I could!

I was in New York until 2015, and then I came back to London. I did a retrospective on my last 10 years; where had I come from, where was I now, and where was I going to next. One of the core things that struck me was around impact. I was doing continuous 12 hour days at JP Morgan; I could have been doing 16 hour days, or 8 hour days and it wouldn’t matter. When I distilled down my impact in the firm, it was super low. I honestly believe that 30% to 40% of the workforce could not turn up the next day and it would not impact the business. It’s the big question though, how do you know what to do? I was at a random wine tasting event and I was introduced to a very entrepreneurial man. He told me to forget the recruitment agents, forget HR etc and figure out who you want to go work for, find the CEO and target them for the role you want. Again though, how do you know who you want to work for?

I was at JP Morgan one day, playing with the Revolut card and thinking how awesome that company was at changing the world of banking. When I was in New York I used to send money from the US to the UK to cover my mortgage of a house I bought in the UK, and I paid a lot in fees. I started using Transferwise, but they still have fees, and then I came across Revolut. As I was playing with the card, I thought, wow, this is who I want to work for.

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Obviously I didn’t have the courage to do anything about it. It’s similar to asking a girl out; you think about it and then do nothing about it. I did some research on the CEO of Revolut and found out he was a derivatives trader at Credit Suisse. I used to build the risk systems that he would have used at Credit Suisse. I googled and found his email address and sent him an email saying, I love your company, I understand your background, and I would really like to come work for you as I think I can help you guys out. He responded saying I was too senior and they were only hiring hands-on people, not managers, who would be willing to roll their sleeves up and get things done. I emailed back saying “you don’t know what I’m capable of and I’m not just a Powerpoint pusher”. He put me in touch with an operations guy in the team; I then interviewed and met the management team. From there they hired me.  

What is fintech to you? Do you use fintech in your life?

I used Mint.com a lot, and I still use it even though it has now been bought out. I found it in 2007 when it was founded and I was an avid user; I loved the transparency and control it gave me over my finances. I can set categories and budgets for spending.

I was at Dresdner Bank during the dot com bust; I was working in the risk management team. The previous day my boss told me that the company was going to make some people redundant, but that I would be safe. The next day, I sat at my desk watching as one person after another was called into the office upstairs and made redundant. They cleared the entire floor up to my desk. I had only been in London two years, was 23 and earning about £22,000. At the time I was living from pay cheque to pay cheque. I remember thinking, if I had been made redundant what would I have done. I thought “f**k I would had have to go back home as I wouldn’t have survived financially”. At that point I started to build my cash minimums; you need 6 months of cash minimum sitting there and that’s when I started taking money more seriously. Mint was one of the first players to allow me to take my money more seriously. I was bad at breaking that link between pay rises and increased spending habits. Mint help me break that link. It also helped me find thousands of dollars of fraud in my account. I once had a TV cable service signed up in California. I had never been to California; the only reason I realised that this had happened was because one of my Mint budget categories blew up, so I went and investigated it, and realised someone had used my account details to sign up for the TV cable service.

I still use Mint. I use my Revolut card for day to day transactions and I bank with Santander, HSBC and Nationwide which I use to top up my Revolut card. I use Rate Setter along with a couple of the other peer to peer platforms, and I used Money Farm. I put money in quite a few platforms to spread it around, and diversify the risk of using one platform. I also really like ETHEX.org which is an ethical investment platform; their strap line is “make money do good” and you can invest money in a variety of projects such as wind farms, property development for vulnerable people, community projects, solar installation etc.

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On Pensions, I have my JP Morgan pension; I want to do a SIPP just to try it out. It’s expensive to set up and maintain though. I hate mutual funds. You’re effectively paying a guy to pick the shares for you, and as has been proven, you’re just paying him to buy his expensive yacht. I would much rather buy ETFs (exchange traded funds); I use eTrade in the US, and IG Index in the UK. With regards to direct stocks, I pick them all myself. The best investment I’ve done is in Nvidia who make chips for gaming; I only put in as much as I’m willing to loose, but my wealth increased significantly with them.

What’s your favourite tech?

I love the concept of electric cars; I love the idea that they reduce noise and air pollution. I hate running my finger along a window ledge and seeing the amount of pollution on my finger.

What is your biggest outgoing?

Rent is the biggest outgoing. I own a property in the UK but I don’t live in it. Outside of rent, I don’t spend much money. One of the biggest challenges I had when I joined Revolut was my wardrobe; I have a closet full of about 45 shirts from my days at JP Morgan. That was my uniform. Every time Charles Tyrwhitt had a deal on I would stock up on shirts. On the opposite side, I have about 8 t-shirts; I need to buy more t-shirts as that’s what I wear to Revolut every day.

I go on holidays and spend money on that; I love scuba diving and religiously go every year to a new spot with my friend from the US. We have a guys holiday where we go shore diving; I have just come back from Egypt. It was one of the most relaxing weeks I’ve ever had.

Outside of them, I play squash which isn’t that expensive, I like nice wine (not expensive wine), and I spend money on my wife, although she has to tell me specifically what she wants as the last three years I’ve had to take back pretty much every gift I bought her.

What has working in finance taught you about your personal finances?

It’s actually the other way round for me. Being a CFO is new for me. I take what I do in my personal finances and apply them to my company finances; budgets, forecasts, reconciliation, FX, is everything that I look at in my personal life. The only thing that I have translated the other way round is with crypto currency. I now own Litecoin, Bitcoin and Ether.

What financial goals do you have?

To not have to work. I will never stop working, but I want to know I am completely financially independent. If I had 10 million pounds I would not do anything different; I would keep working as I get satisfaction from it. I would not just retire and, then what…wait to die? Working keeps my mind sharp, and I’m doing what I love now as well.

What learning do you do?

I learn a lot from talking to other fintechs and investors. They tell me what to listen to or to try out. I’m currently reading “Why We Sleep”; it’s completely changed my view on sleeping and now I’m religious about getting eight hours of sleep a night.

With regards to podcasts, I look at them by topic. I love podcasts and information around time management and productivity. I fundamentally believe that a lot of the things I’m doing now, can be made more productive or efficient. I listen to Tim Ferriss, Curious Minds and a number of Ted Talks as well. Freakonomics radio is a favourite as is Andreessen Horowitz.

Any finance, career or personal tips for readers?

I had two big learnings in personal finance. The first was after the redundancies at Dresdner Bank. Those redundancies taught me that I needed to always have 6 months of savings in my bank account in case something bad happens. After the 2007 financial crisis I doubled that amount to 12 months worth of savings. Having liquidity (Wee Scot here: having an ability to access instant cash) is very important. The second learning I have is around breaking the gap between spending and pay increases. As your salary goes up, your spending should not reflect that. There have been times where I can afford a really nice car, but why would I buy that? Breaking the link is fundamental in being able to save more.

Thank you Peter. 

If you missed any of the last episodes in the CFO series, check them out here:

If you would like to take part in the CFO series drop me a note at weescotfinance@gmail.com If you're a woman, than even better, as the gender quality of the CFO series is terrible!