BANNED From Running A Company! It Was A SCAM!
Essex and London Properties Limited offered property bonds paying between 8% and 12% per annum
People invested between £5,000 to £100,000
£13 million was invested in total
They only bought one property
The company paid old investors from the payments of new investors (i.e. a Ponzi)
The High Court shut down the company in 2018
In 2021, company director, Mitchell Mallin, has now accepted a ban preventing him acting as a director for 14 years
People handed over their hard earned money to these scammers assuming they were the experts. They trusted without verifying. I hate the phrase ‘if it sounds too good to be true, it probably is’ – just because something is outside of your experience doesn’t make it untrue. So many people miss out on opportunities because of that idiotic saying. However, that doesn’t mean you should have your mind so open that your brain falls out. Do your own research before making any kind of investment and make sure you know who you are investing with.
Pay to learn from the mistakes of others or pay with your mistakes!
If you don’t know a market, you need to learn about it before you put your money into it. You can’t rely on the knowledge of a third-party that may not have your best interests at heart. Even if you are going to be hands-off and invest passively, you need to know your subject.
You have to choose: either pay to learn from the mistakes of others in the form of books, courses, mentorship, etc or pay in the form of making those mistakes yourself.
It is important to know things like how to identify who really owns a property; how to do correct due diligence; and when you should seek legal advice. When you are investing or lending out money on property, it is also often a good idea to have a legal charge on the property or be a co-owner via a limited company. If you have been well trained, you will know all this. If you are going to invest £100,000, surely it makes sense to spend a small fraction of that amount developing your skills?
The much bigger scam!
In a Ponzi scheme, the money paid from earlier investors is taken from future investors. In the banking system, your purchasing power is taken away while it seems like your money is growing! When people’s money is sitting in their bank account earning a small interest rate, they tend to think ‘well at least I’m not losing money’, but, in effect they are! This is because the central bank is busy printing new currency and commercial banks are creating more via lending. When there is more of a commodity and demand remains the same, that commodity falls in value – that applies to currency too.
This isn’t just the inflation number put out by the Bank of England. All new currency needs to go somewhere; if it isn’t increasing the cost of consumer goods, it’s pumping the price of assets such as property. This means the value of your currency is going down much faster than official figures would lead you to believe.
Avoiding investing isn’t a risk free option. In fact if you leave your money in the bank, you will certainly lose purchasing power over time in the current monetary system. So do invest your money, but make sure you know what you are doing first!
Bricks and mortar, not bits of paper!
While there is certainly a place for investing in bonds, shares and other paper assets, I much prefer bricks and mortar. If I buy a property I can see it, inspect it and know exactly what I own. If I buy paper assets, I have to trust someone else as to what I actually own, and the decisions made about whatever I have invested in are made by someone else too.
In my opinion, it is much better to invest in real estate directly, whether it be via purchasing yourself, a joint venture or lease option, than it is to invest in a fund or company that invests in real estate. That way you know exactly what you have got. This does require knowledge and skills however. If you would like to learn how to invest in property, I am touring the country offering an advance training day – free! Book your ticket now, as spaces are very limited.