Have you ever wondered what the peddlers of 'wealth-building' books or schemes are actually selling? On behalf of Management Today, Rhymer Rigby paid his money and took his chance on the cardboard fantasies which lure the gullible.
J K has found what he's been looking for. A C is making much more - and doing much less. D P has undreamed-of happiness (and a Mercedes Sports) and, for L L, life has changed beyond belief. What connects these gushing statements? Lottery windfalls? Religious conversions? A sip from the Grail? No, the common thread here is that they are all the satisfied buyers of books of the 'become a millionaire' genre.
The ads for these, which generally appear in the classified sections of magazines, are familiar to most of us. Along with testimonials such as the above, they usually feature a lengthy spiel by the author. Typically, a few years back, he - for literature of this ilk is an apparently male preserve - couldn't afford a bus fare; now he drives a Porsche, which features prominently alongside its owner in the ad. Did he work hard for the aforementioned status symbol? Almost certainly not - more likely his near-vertical ascent to the financial stratosphere was down to 'a few secrets', which can be yours for anything from around £20 upwards. Naturally this is a giveaway price and will undoubtedly prove to be 'the best money you ever spent'.
Will it? These offerings are generally seen as rather harmless objects of derision: those who buy them are looked upon as easily duped, and the only people who are likely to become rich are the authors of the books in question. Or perhaps this is an overly cynical view. For the benefit of disbelievers, many of the ads offer to verify the statements; moreover a high proportion also promise money back to the unsatisfied. And, as one such says (pointing out that all the punter stands to lose is the price of a stamp): 'I may be wrong. BUT WHAT IF I'M RIGHT?' With this in mind, Management Today sent off for a selection of these potentially lucrative products.
- The first arrival - priced at £20 - is a slim, silver volume entitled The 90s Millionaire. A line drawing depicting villa, Roller, yacht and tropical sunset adorns the cover. According to the ad, herein lie the secrets which can make all these - and more - mine. Forty pages on, it becomes apparent that the promised secrets of wealth are found, not only in this opus, but also in most GCSE-level economics textbooks. These revelations are interspersed with a sort of homespun cod philosophy, which in turn is rather limply supported by low-grade quotes. ('In life, as in football, you won't go far, unless you know where the goal posts are.') The book's general shabbiness is exacerbated by the omission of several pages, poor syntax, grammar, punctuation and maths. Whatever else he may do, author Chris Douglas does not a book write good.
But ignoring homily and poor English, by the end of the book, the reader should have a smattering of economics and some idea of what setting up a mail-order business involves. And to be fair, some of the information provided may well be reasonably useful. But, in terms of the secrets that millionaires hold, the book divulges precious little which lies outside the realm of general knowledge.
Along with the book comes a sheaf of literature on 'The Wealth Foundation'.
Whereas anyone can go out and buy the book, The Wealth Foundation is for the chosen few. To this end, grandmaster Chris Douglas personally vets every application form. But, like any good corps d'elite, membership is not conferred on merit alone. The hopeful need money too: just under £700.
Interestingly, the book is sold by Douglas's company, Westminster Business Management Systems. A warning: those considering opening their minds (and cheque books) to his advice might want to reflect that, as of 30 September 1994, the company's balance sheet showed assets of minus £25,000.
- Weighing in at over 400 pages and costing just under £70, Tyler Hicks' Encyclopedia of Wealth Building Secrets is the largest, and priciest, of the money-spinning books. Despite the outlay required, production values can't have been high: it is spiral-bound, looks as it was photocopied and is liberally sprinkled with hand-scrawled underlinings and asterisks.
But, if the book lives up to its claims, it could be money well spent.
The trouble is, disappointment comes quickly. As the ad touted 'Ty' as the president of a 'multi million pound-lending organisation', it would not be unreasonable to assume that the book would be relevant to a British audience. Strange then that the entire volume is written in Americanese, with not a pound sign to be seen.
Still, as Ty himself repeatedly reiterates, some 'BWBs' (beginning wealth-builders) give up much too easily. Perhaps, but for British BWBs, screwing money out of single-state stock offerings and the United States Rural Development Act would appear to be something of a non-starter. But then again I was sure that Ty wouldn't let his readers down like this, so I tried to get a phone number for Leeds-based Paramount Publishing, from which the book came. The company is ex-directory.
- The appearance of The Layman's 1996 Guide to Personal Financial Success!, like its stablemates, does little to reassure: £30 buys a stapled softback.
However, it at least spares the reader any homespun wisdom or useless information on the US's Inland Revenue Service. What it does advocate is all manner of financial shenanigans. The pages are littered with schemes for raising vast sums of money, which involve using one loan to secure another, and another, virtually ad infinitum. By way of assuaging any trepidation his readers may feel about such undertakings, the author is quick to point out that 'Some might consider this a highly aggressive or unsound way to finance. You should be aware that this is what the Government has been doing for decades.' Whatever your particular views on the finances of Great Britain plc, using one loan to secure another sounds dangerously like building a financial house of cards.
Further doubt is cast on the author's business acumen in chapter seven, where he explains the importance of qualifications in presenting a sound appearance. To this end, he advises that degrees, diplomas and certificates may all be purchased in the UK - and, he reassuringly tells us, that they come with an authentic stamp and seal. The stamp's so-called authenticity notwithstanding, it probably isn't much good if it comes from a university whose campus consists of a stamping-and-sealing department in a flat in Hackney. The unfortunate conclusion to be drawn from all this is that the only people who are likely to be impressed by such qualifications are those who are prepared to shell out for the book in the first place.
The back of the book is also bursting with money-making schemes and places to squirrel wealth away from the eyes of Her Majesty's Tax Inspectorate, principally offshore trusts and overseas bank accounts. But they cost - and dearly. A specialist in offshore trusts from a major UK bank advises 'not to touch these with a bargepole'.
- Next up is Jay Abraham's Your Secret Wealth, over six hours' of cassettes, encased in a box depicting a gold bar, set against a background of gold nuggets - the classiest presentation by far. Will the spoken word prevail where the written has failed? What he has to impart is - as is proper for an American - more of a life-changing motivational nature than anything else. Those who travel vast distances in cars and have sufficient dedication to listen to the whole six hours might glean something from the Your Secret Wealth cassettes. Others are less likely to find them useful. But uniquely, among the products on offer, this set of tapes is on a 30-day free trial.
Back they go.
- Our fifth and final port of call was something a little different.
A friend of a friend knows of a get-rich-quick scheme called One Life.
Ten pounds will secure a (surprisingly decent) buffet lunch and entry to the One Life rally. To gain access, you need a member to take you along.
Intriguingly, you must also sign a form swearing yourself to secrecy over the proceedings. Before the presentation proper starts, there is much mingling to be done. This takes the form of an endless series of introductions to people who all seem to share two things: an effusive friendliness and a devotion to One Life which borders on religious zealotry.
The One Life representative runs up on to the stage to the kind of applause that American televangelists can only dream of. 'Do you wanna be rich?
DO YOU WANNA BE REALLY RICH?' he goads. The cheers from the crowd would suggest they do. After whipping the assembled into a suitable frenzy, he starts drawing diagrams of pyramid-like structures on an overhead projector. 'There's no product - hence no tax,' he repeatedly tells us. Apparently all you have to do is sign up for £2,000. You then come along every Sunday with potential new members. When a new member signs up, his or her 'sponsor' receives a substantial cut of the joining fee. To reinforce the weird cult-like atmosphere, the sponsor also gets to stand on his chair and announce to the masses that 'One Life has a new member'. The crowd then whoop and cheer with even more enthusiasm than usual.
Later, over lunch, snatches of conversation reveal the new converts to be deeply engrossed in fantasy arithmetic: 'If I bring along 40 people next Sunday, I'll be able to afford a Porsche.' His companion rejoins, 'Nah, mate, I'm going for a helicopter'. More worryingly for those whose minds are full of sports cars and whirlybirds is the conversation I overhear between two people about the scheme's growing size: it's becoming unwieldy and they discuss splitting it in two. There are only 56 million people in the UK and the pool of potential One Lifers must be limited. Lunch over, the multitude disperses, adopting a Masonic silence over all that has transpired.
As things turned out, those who voiced concern over One Life's future had their worries come home to roost somewhat earlier than they expected.
After investigating the company's activities, the DTI petitioned to wind it up, believing that to allow it to continue operating was not in the public interest. A creditors' meeting is scheduled in early April to enable the scheme's members (there are over 2,000, the vast majority of whom will be significantly out of pocket) to recover some of the money they sunk into the ill-fated 'Businessman Game'.
Thus far the exercise has cost about £130 and the most important 'secret' I've learned is not to throw good money after bad. It would be hard to say that any of these products represent value for money, but it is possible to say which is the least worst. This rather dubious accolade goes to One Life, which, for all its sect-like overtones (and recent problems), charged only £10 and threw in lunch. The worst - by a long way - was the Tyler Hicks offering. His tome earns this distinction for its cost and unsuitability for any UK use other than as a door-stop. The rest fall somewhere in between, being neither vastly overpriced nor of much use.
Anyone with £130 to spend on this type of enterprise would be well advised to buy National Lottery Instants, which at least have the virtue of being good fun.
Perhaps the question these ads should ask is not, 'What do you have to lose?' but 'What do you stand to gain?' The entrepreneurs who are really worth emulating - Richard Branson, Warren Buffet and the like - do not write books or start schemes of this nature. The vendors of these products may have got rich using the methods they expound, but they almost certainly got richer peddling dreams of great wealth to the gullible. And, given the appearance of the products, it would seem that - in this publishing niche at least - you really can judge a book by its cover.
Would-be pharaohs beware: people are wiseing up
A time-honoured form of 'get-rich-quick' scam is the pyramid scheme.
Such schemes - illegal in this country if they involve no product - are a pretty good way to become wealthy, assuming you are somewhere near the pyramid's apex. Lower down, you are far more likely to lose out. The schemes' Achilles heel lies in simple mathematics, as illustrated by the following example. One person starts the scheme, signing up five members for £5 each.
To keep the pyramid going, these five investors must sign up another five. And so on. Money rises up the pyramid from the lowest level and those above enrich themselves. Assuming this level of recruitment, by the 11th generation, the pyramid's base will have expanded to encompass the entire country. With no new investors, the pyramid then collapses, leaving those at the bottom of the heap - the vast majority - out of pocket. The fortunate few near the top can then retire to their Essex mansions, pending DTI investigation.
In Eastern Europe, where the prevailing economic free-for-all makes for legislation that lags considerably behind events, these schemes - and the disasters they precipitate - are common. However, would-be pharaohs should think twice. Romania's gypsy community has threatened to lynch the head of one such scheme if he fails to make good on his promises.