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Gerald Ratner tells ME & MY MONEY how he rebuilt his finances

The best financial decision businessman Gerald Ratner ever made was to start giving after-dinner speeches for a living. 

Ratner famously lost everything in 1991 when, as chief executive of jewellery chain Ratners, he joked that some of its products were ‘total crap’. The 71-year old told DONNA FERGUSON he now earns a lucrative living giving motivational speeches. 

He also does business mentoring and his book, Reinvent Yourself, has just been published. 

Before the fall: Gerald Ratner in 1985 as his jewellery chain grew

What did your parents teach you about money? 

How important it is to have it, and to make it. My family opened the first Ratners jewellery shop in Richmond, West London, and that’s where my father worked. My mother served in the shop while she was pregnant with me, so I can honestly say I was born into the business. 

Sometimes, money was tight and sometimes we had luxuries, because the jewellery business is seasonal. I remember my parents were always talking about money and the shop and from a young age that made me want to go into the family business. They were fairly careful and quite frugal, but at the same time, they liked keeping up with the Joneses. For example, in the 1950s, my mother told my father to put an aerial up to make the neighbours think we had a TV when we didn’t. It was important to them to show off a bit. 

Unfortunately, their careful attitude to money didn’t rub off on me. Maybe I rebelled against it. I’m definitely a spender, not a saver. I can’t resist temptation. 

Have you ever struggled to make ends meet? 

Yes, after I lost my job in 1992. I was unemployable, according to the press. I didn’t earn any money for five years. The value of my shares in Ratners plummeted and I had no other savings. I cut back on everything, but I still couldn’t make ends meet. I had to sell my house at a loss and I ended up with nothing. In order to get by, I borrowed from a friendly bank manager and got into debt on credit cards. I would only make the minimum monthly repayments and pretended the debts didn’t exist. I was depressed. There were days I would struggle to get up in the morning. It was a dark period of my life.

Did you ever take any unemployment benefits? 

No, that would have been too humiliating. But I did start cycling and that made me feel a lot better. I experienced the benefits of health and exercise, from a mental health perspective. 

So I decided to open a health club. I put an advert in my local paper saying I was going to open one shortly and would waive the joining fee if people signed up. I got 150 people which enabled me to start that business in 1997. I sold it four and a half years later for £4million. That’s how I turned my life around.

Have you ever been paid silly money? 

Yes, to give a 20-minute speech about my career at an event in Texas. I’d rather not say how much I was paid, but it was a substantial sum. I normally get paid a few thousand pounds to give a speech. I’ll talk about Ratners and my comeback in business. I find it cathartic. When I look back now, I think, ‘Aren’t I lucky today?’ It makes me appreciate what I have. 

What was the best year of your financial life? 

It was 1990. At that point, I was earning £850,000 a year, living in a £1.6million house and I had a few million pounds worth of shares.

I never thought it was all going to end. I certainly didn’t think it was going to end over a stupid joke. But I owed £1.7million on my mortgage and I had converted my stock options into shares when each share was worth £4.20. Their value fell to just 2p each after my speech – and I still had to pay tax, at 60 per cent, on the price I paid when I converted them. 

So, when I eventually got my tax bill, it came to £1million, even though the shares weren’t worth much by then.

The most expensive thing you bought for fun? 

It was a helicopter for $2.5million (£1.9million). I thought it would enable me to visit my shops more quickly. But it didn’t work out like that. 

What is your biggest money mistake? 

Making that speech at the Royal Albert Hall, London in 1991. It cost me my salary, job, mental health – everything. People have asked if I regret saying what I did. It’s not a stupid question because I’m a lot happier these days. But I would not say it’s worked out for the best because it’s deeply regrettable that a lot of people other than myself lost their jobs.

The best money decision you have made? 

Going back to the Royal Albert Hall in 2003 to give a speech. Ironically, that was the start of my lucrative speaking career. 

Do you save into a pension? 

No. I used to save in a pension when I was at Ratners. But when George Osborne said you could cash in your pension, I cashed it in, so I’ll be working until I drop. 

Do you invest directly in the stock market? 

No. I don’t feel comfortable putting my money into somebody else’s hands and being reliant on their performance. I’ve seen the other side of it. I know that company directors often tend to put themselves before their shareholders. 

Do you own any property? 

Yes, I have a nice five-bedroom Victorian house in the village of Cookham in Berkshire, which I bought ten years ago for more than £2million. I don’t know how much it’s worth today, but I can’t think of a better investment than buying your own home. 

What is the one luxury you treat yourself to? 

Cycling 25 miles every morning on a carbon fibre bike. It cost me a few thousand pounds and I’ve got all the gear that goes with it, which is quite expensive. But I love my bike. It’s like my best friend. 

If you were Chancellor, what would you do? 

I would cut back on the amount that is paid out to public sector workers in pensions. It’s too generous and it puts a huge burden on the State. People are retiring earlier and living much longer than they used to. It’s just ridiculous how much some police officers and headteachers have accumulated in their pension by the time they retire, even if that’s in their 50s. I think the current system is not fit for purpose. 

Do you donate money to charity? 

Yes, to animal welfare charities such as the RSPCA. I think animals get a rough deal. 

What is your number one financial priority? 

To enjoy my life. The pandemic makes you realise you can’t take anything for granted. You just don’t know what’s around the corner.