Money & Me: ‘I sold my Porsche and Harley Davidson to start my business’
Lothar Hohmann, president and owner of Precise Group, says he only takes risks with money he can afford to lose
Lothar Hohmann is president and owner of Precise Group, a UAE-based wholesale trader, manufacturer and distributor of 2D and 3D printed products. The German national, 54, visited Dubai on holiday in the 90s and stayed on to build businesses and make a home in the emirate. Naturally, he has learnt a few financial lessons because of the economic ups and downs over the years.
Mr Hohmann lives with his wife Mariam and his daughter Juliana, 9, at The Villa in Dubai.
Where did you grow up and how did your upbringing shape your attitude towards money?
I was born in 1966 and grew up in the picturesque Black Forest in the south of Germany, close to Switzerland and France. Our parents had a beverage delivery service, supplying private households, restaurants and festivals and I loved to accompany my dad on weekends and in the holidays. My three brothers and I helped on a daily basis, sorting bottles and unloading trucks. That’s how I was exposed to dealing with money for the first time, when I had to give customers the right change.
What was your first job outside that home business?
I must have been about nine years old when I told a family friend who owned a restaurant that I wanted to train with him as a chef. When I left school at 15, I went back to him (he lived 200km away) to start a three-year apprenticeship. I worked 10 hours a day, six days a week and earned the equivalent of Dh200 a month with free housing and food. I changed my career at the age of 22 because, while I worked a lot and gained valuable skills, I didn’t make any money.
When did you first realise you needed to go into business?
That was in 1994, when I visited Dubai the first time and saw the opportunity to apply the knowledge I had gained working in holiday resorts in Spain and the Caribbean.
But your main businesses have been crystal, gifts and 3D printing? How did that come about?
When I split from my partners in the holiday business in 2002, I didn’t really know what I wanted to do. During a holiday in Las Vegas, my wife Miriam and I first saw 3D crystal laser engraving, a technology that allows customers’ portraits to be engraved into a crystal block. Five months later, we had our first retail outlet at Dubai Duty Free. We subsequently expanded into 3D-printed caricatures and 3D-printed souvenirs, as well as the first 3D-printing pen.
Why did you expand into 3D-printing personal protective equipment?
Our business was a combination of tourist and corporate merchandise, and educational products. In both sectors, sales either dropped to a halt or fell by over 90 per cent because of Covid-19. So, we set up the GCC’s biggest 3D-printing farm to manufacture PPE material such as face shields; these were in great demand in the first six months of the pandemic. We also launched an active antimicrobial nano-copper film that kills 99.9 per cent of pathogens on frequently touched surfaces.
My wife and I looked at all our ongoing expenses to see where we could make adjustments
Why do you think it’s important to adapt quickly to changing times?
Nothing will be the same as it was before the pandemic. Businesses need to adjust to that fact and make necessary changes quickly. You need to move fast.
How do you apply that philosophy to your personal finances?
My wife and I looked at all our ongoing expenses to see where we could make adjustments. The fact that we don’t go out as much as before has reduced our spending budget. We ask ourselves, “Is this a necessity?” “Can we live without it for the time being?” We are more aware of how much things cost and what they add up to.
What was your first big investment?
It was the engagement and wedding ring that I bought here in Dubai for my wife Miriam.
As a businessman, what’s your approach to a pension plan?
I’ve been an expat for almost 35 years. For most of this time, I’ve been self-employed, which means paying for private medical coverage to give us peace of mind, as well as life insurance, and other investments and savings.
What do you invest in?
Property mainly. We bought the house that we are living in now at the height of the real estate boom in 2008 and rented it out for the first eight years to have the income. We part own our commercial property where we have our production facility. Retirement plans, life insurance and education plans are other monthly savings.
When and where did you buy your first home?
We bought in the Arabian Ranches in 2000 as it was one of the first projects available to expats.
What has been your weakest financial moment?
When I split from my partners in 2002, I had not saved any money after seven years of re-investing into the business. I had my rent paid for a year, a Porsche car and a Harley Davidson motorbike. I had to sell both to pay for the new laser machine to start the business.
What was your greatest financial challenge?
Over the years, we have faced financial challenges that seemed like obstacles at the time, such as in 2008, when the global financial crisis rocked our business. Or when we had a fire in 2016 that destroyed a large part of our facility. The team got together and we took it one day at a time. Our customers and suppliers were very helpful and my family was extremely supportive.
Who has been your biggest financial inspiration?
Two of my brothers moved from Germany to Dubai and started their own businesses which has become very successful. My older brother, Uwe, is very organised and structured – something I would like to be more of. My younger brother Wolfi has been able to turn his hobby and passion into a business, and that inspires me.
What’s the one big investment lesson you’ve learnt?
Short-term investments are the riskiest and require a lot of attention. During the heyday of the Dubai property market, we bought some off-plan apartments to flip them quickly and were very lucky to sell them before the whole market went down. What I learnt is to only play with money you can afford to lose, especially when you take high risks.
Are you a spender or a saver?
I like to spend when my wife and I go out, or when we go on holidays as a family. Otherwise, we are both savers.
Where and how do you save?
On a monthly basis. It’s about 20 to 25 per cent of our monthly income, and it goes towards the various plans that we have.
About 20 to 25 per cent of our monthly income goes towards various savings plans
What has been your proudest financial moment?
When we bought our first house together in the Ranches.
What is your biggest financial milestone?
The day when I can step down from what I’m doing because things are as they should be for us to live our lives.
Do you have any financial regrets?
We sold a property we bought during the real estate boom. We should have kept it as an investment.
How much do you have in your wallet right now?
I have Dh50 in small notes in my wallet for tips as I pay by credit card for everything else.
What car do you drive?
I use a Land Cruiser as it is reliable, safe and practical, and I can get my bicycle in the back easily.
What financial advice would you offer your younger self?
Be more conservative. It takes longer to reach the goal, but it is a lot less stressful.
Updated: November 12, 2020 01:20 PM