Get Rich Quick - Be Careful and Aware

Written by Vincent Cable MP and published in Online Exclusive on Mon 13th Sep 2004

For the second time in a few weeks, I have received a flier inviting me to make a fortune with a little of my own money, and without working, by investing in property. In the second letter I was asked to trust a company with no address, meeting at an undisclosed venue, contactable through an 0870 number.

Perhaps innate conservatism made me suspicious. But everything about the exercise cried out: "Scam".

It is not my job to give financial advice or to predict movements in property prices. But it seems fairly clear that the market is close to a peak and, at the very least, there is a serious risk of a sharp fall in prices. People could as easily lose money as make it; though there was no warning of these risks. I recall similar promotions urging me to invest in unit trusts and other share vehicles when the stock market bubble was about to burst.

There must be some people who sign up; otherwise companies would not invest in expensive advertising. And in a free society there is nothing to stop some people advertising their wares and other buying them.

But two things worry me. One is that there is a 'get rich quick' philosophy which undermines most peoples' belief in hard work and thrift.

The other is that there will be another round of casualties amongst people who part with their money. I have dozens of constituents, including sophisticated investors, who lost a lot of money in Equitable Life, endowment mortgages and split capital trusts. In some cases, disreputable mis-selling was involved.

I have asked local Trading Standards officers and the financial regulators to check out whether the property promotions are legal. Beyond that, I would simply say: "Be careful".