Investing Talks
Name: Rui Bairrada
Age: 46
Country of birth: Portugal
City of residence: Lisbon
Biographical note:
I started my career in banking at Deutsch Bank in 1995 as a courier. I left after 12 years, as Partnership Banking Coordinator, to set up my own business in personal finance. In 2014, I founded Doutor Finanças, a fintech in the area of financial wellbeing to help people make better financial decisions.
I have a postgraduate degree in management and leadership from AESE and I honed my leadership skills at the Nova School of Business and Economics.
Let's start our conversation by finding out a little more about Rui Bairrada's history and career: childhood, youth, first steps in his professional career, first dreams...
I was a happy child. With a balanced upbringing, the result of a military father (my great reference point) and an enterprising mother who was entirely devoted to her family, I grew up free to make decisions and prepared for their consequences, thanks to the structuring values they passed on to me.
Almost at the end of secondary school, I had my first professional experience. I imagined myself on a motorbike delivering pizzas, but I ended up making them. It was a short but enriching experience.
Then came the big break of my professional life: working in banking. For more than a decade, at Deutsche Bank in Lisbon, I learnt and grew a lot as a man and as a professional. I'm very grateful.
At the age of 30, I became co-owner of a company. Later, I opened my first company, specialising in credit negotiation and renegotiation. This was followed by a new venture and from this second company Doctor Finances was born.
How was Doctor Finances born?
Doutor Finanças was born in 2014. Right from the start, this project drew on the spirit of mission of the company I owned at the time. Our focus was already on helping the Portuguese make better financial decisions. Especially those who were facing the worst effects of the economic crisis.
Through companies concerned about the financial strain on some of their employees (along with the poor financial literacy of the majority), we organised personal finance workshops and helped them find solutions, particularly in terms of loans.
I then realised that this project could take off. And together with a group of people who were already with me in that company, the adventure of "doing good, well done" began.
"Internationalisation is part of our plans, we want to achieve it by 2025!"
How do you assess the evolution of the property market in recent years? What are the main factors that have driven this evolution? How does it impact on your business?
The property market has been very buoyant, fuelled by the period of historically low interest rates and greater demand from families, much of it driven by the pandemic. Increased demand from foreigners and the growth of tourism have also contributed to greater dynamism in the market.
In addition to these factors, the construction of new housing was low in relation to demand.
In the last year and a half, rising interest rates have brought about a different reality. Families are now more focussed on reducing costs by renegotiating financing conditions.
This change has an impact, above all, on the type of concerns our customers have. We now do more credit transfers, whereas in 2022 we did more acquisition financing.
What are the most popular types of financing for property investments among your clients today? Has this changed over time?
Most of our customers ask for a mortgage to buy their own home. Until a year and a half ago, most customers preferred to take out a loan with a Euribor rate.
Nowadays, many people are looking for alternatives. The mixed rate has been very popular because it provides stability for a few years.
One of the common challenges in the property sector is financing. What are the main difficulties investors face when looking for funding for property projects? What advice would you give to those who are facing these difficulties?
The main difficulties are related to the amount of equity. Banks won't finance the purchase of a property for 100%. At most, they lend 90%, which means having 10% of the property's value, plus the amount corresponding to taxes and associated expenses.
The only way to guarantee peace of mind is to make sure you have savings. And here the advice is to start building them up as soon as possible.
The property market is often subject to economic cycles. How can investors prepare to deal with possible fluctuations in the market? What strategies can be adopted to mitigate risks in this scenario?
It depends on the type of investment. If you're thinking of buying a residential property, your main concerns should be the property's response to your needs (size/divisions and location). It's important to bear in mind that even if there is a drop in prices, in time the market will recover.
If it's a financial investment, you have to be aware of exactly what you're doing. The property market is generally less volatile and has less liquidity than the stock market, for example. It's crucial to realise that it will take longer to recover your investment.
What's more, investing using credit can be an added risk. The times we are living in reflect the risks.
What is your vision for the future of the property sector?
I believe that we are going through a period of disruption and that we are going to see some changes. I can't foresee whether the times we're living in, with a loss of purchasing power and higher interest rates, will lead to a drop in property prices. But given the short supply, even if we do see a reduction, it will be temporary.
On the other hand, I also believe that it won't be possible or sustainable for us to continue to see double-digit price rises.
How would you describe Doutor Finanças' mission as a financing support company and what is the company's vision for the coming years?
The support we provide has two distinct fronts: financial literacy and intermediation.
In the world of financial literacy, we publish daily articles on our website and provide free tools such as calculators and simulators. In 2022 we published a book (Ganhar, Poupar, Investir) and, through the Academia Doutor Finanças, we provide training on a wide range of financial subjects.
In intermediation, supported by a vast network of partners, we work hard to find the best proposals for home loans, consolidated loans, personal loans, insurance and energy loans.
In the coming years, we will continue to deliver quickly and add value to those who come to us.
What are the main challenges facing Doctor Finances?
Faced with a significant increase in the number of people transferring home loans, our challenges are to keep up with this demand, finding the best proposals from our partners while maintaining the quality of our response to acquisitions.
Do you think that the Mais Habitação (More Housing) package recently approved in Parliament will bring results in the short, medium and long term?
The package will have some impact, but it won't be enough to solve Portugal's housing problem. For these or other measures to have any real effect, we need to join forces. These efforts start with the government, go through the regulators and the banks, as well as owners and builders.
We need to think about a fiscal framework for renting that makes it effectively attractive for landlords, we need to make the financing rules a little more flexible and guarantee more construction. Only with more supply will we have more balanced prices.
Does Doutor Finanças have a presence in markets other than Portugal?
Internationalisation is part of our plans, we want to achieve it by 2025, but we are still analysing possible markets.
What are Doctor Finances' future plans to expand its services or explore new market opportunities?
This year will be marked by the expansion of the Doutor Finanças network of credit intermediaries. With remarkable growth, this network already has more than 40 franchisees, from the north to the south of the country.
This reinforcement of our physical presence fulfils our desire to become the largest national credit intermediary (we are already the largest digital credit intermediary).
The next few years are essentially going to be about consolidating what we've been doing in digital and, now, on the ground. We also intend to consolidate our position as the leading reference for financial literacy in Portugal.
What are your long-term plans for your career? Do you see yourself in this project for many years to come? Do you see this context of constant uncertainty as a problem or an opportunity?
At 46, I can't imagine retiring. Not least because I'm completely in love with this project, which I helped found. I want to continue contributing to the growth of Doctor Finances. Perhaps when I reach 50 I'll start wondering what I'm going to do.
As for the other question, anyone who knows me knows that I always see the glass as half full. That's why I see an opportunity in everything. In times of uncertainty, like the one we're going through now, there are also opportunities.
What was the most challenging project you've ever worked on and why? Would you like to share a specific aspect of that challenge?
Throughout my entrepreneurial journey, I've encountered some challenges. And these always have to do with people. The most challenging moment I experienced was when I decided to continue on my path and break with the partners I had. I realised that we had different visions and that we were going to follow different paths. Those were very challenging times because I'm very attached to people.
Today, I feel grateful. Looking back, you realise that there was a Doctor Finance before, and another one after this decision. That's what entrepreneurship is all about: changing along the way. Nothing is watertight.
Would you like to leave a message for stakeholders in the property sector?
I leave you with a message of hope. We won't get anywhere on our own, but if we work together and support each other, we'll go a long way. In fact, we end up working with the same universe of people and, therefore, if we are aligned and want to "do well, well done", we can help Portugal to become, more and more, a better country in which to live, work and undertake.
