Wednesday, 25 November 2015

Store First Storage Pods Scam Complaints

This information was posted on Motley Fool website and a poster had  found one of these storage pods for sale. Store First (Group First) claimed that these storage pod investments were guaranteed and low risk - it doesn't appear to be that way.

This is the lot - http://www.pugh-auctions.com/Lot/Manchester/20151203/110 the guide price of £10,000 is for 9 units!   The legal pack provided contained a copy of the original lease dated 1 June 2012. The seller bought the storage pod via his SIPP and paid £33,750 for this 'investment' in 2012.

He's also previously tried to sell them in the October auction, though this time with a guide price of £20,000 - http://www.pugh-auctions.com/Lot/Manchester/20151022/065a. They've abandoned that for this month's auction, I wonder why?

Friday, 20 November 2015

Airport Parking Pension Investments - Is Selling Airport Parking Spaces a Scam?

Is Airport Parking Suitable for Pension Investment? Is Airport Parking Safe and Guaranteed?

Airport parking spaces being offered as an investment opportunity appear to be following the same pattern as those offered previously for Storage Pods which interestingly now seem to have gone very quiet. It's really very worrying that such schemes are being so actively marketed to people with the new pension freedoms and who could end up losing their entire pension pot to these unregulated investment "opportunities".

With any investment or purchase especially an unregulated one I always find it a useful consideration to assess what the seller is getting from the deal as well as what I would get. If the seller is getting a risk free return substantially above mine and my entire capital is at risk, as it is with any unregulated investment regardless of any so called guarantees offered, then it will always ring alarm bells.

Two examples are storage pods and airport parking spaces. If I can buy a building and subdivide it into a series of storage pods or buy a plot of land and divide it into parking spaces and sell them on for a massive profit, I could be making millions from it. The poor unsuspecting punter who has bought a parking space or storage pod now has a piece of land they have bought at a massively inflated price and no easy way to sell or realise their money other than finding another sucker to buy it off them.

Why would anyone buy a secondhand one when Parking First claim they immediately market it for 25% increase on the purchase price? If I really want a parking space then I'd buy one directly saving myself 25%.

The details on the Parking First airport parking at Glasgow give some shocking numbers. The site contains 1033 parking spaces. Parking first claim that these are worth £30,000 each. That's a total of almost £31 million. But if the land isn't viable as parking and can't be rented out hen it's only worth the land value, maybe £1 million if you're lucky. So Parking First have made £30 million profit and the people buying parking spaces have lost £30 million between them.

Similar numbers worked for the Storage First pods that they offered previously. An old warehouse once divided into pods suddenly was worth £6 million.

Anyone who has bought these pods is having great difficulty selling them and cannot realise the money from their "investment".

Remember any UNREGULATED investment does not have to meet any standards of accuracy, truthfullness or consumer protection that a regulated investment would. You have no protection under FSCS and can lose 100% or your entire investment. If you can afford to lose your pension pot then this might be the investment for you.

For anyone else you are probably far better to use a fully FSCS protected, FCA regulated investment portfolio where you really are guaranteed that you will not be subject to fraud.

Wednesday, 18 November 2015

Regulated Guaranteed Investments - What Are The Risks & Differences with Unregulated Investments?

It's apparent from posts on various discussion boards that there is a big gap in understanding the differences between regulated and unregulated investments and the protection they offer.

A regulated investment has to comply with strict rules from the FCA about what can and can't be said as well as having to include the standard disclaimers:
"Past performance is not a guide to the future" and "Your capital is at risk"

A regulated investment is also protected by FSCS so if the company selling the investment goes bust you are protected up to £50,000. This doesn't cover you if the investment performs badly.

Unregulated investments aren't burdened by such requirements and can make pretty much any claim. I've seen a very useful statement saying that "marketing for unregulated investments should be considered fake unless verified by a professional". I'd add that it should be verified by a professional employed by you. It's not much use relying on the statements of someone commissioned by the seller of the investment.

Some examples of unregulated investments are Airport Parking spaces, Storage Pods, Shipping containers and things like Carbon Credits and Rare Earth metals. All of these types of investment seem to attract their share of scammers who are purely out to rip off consumers.

An unregulated investment can make claims of guaranteed returns and future values but these do not have to have any basis in reality and guarantees are generally worthless as they rely on the company honouring them. One example of storage pods having guaranteed values but when the time came to sell the value was no longer available.

Storage pods sold for £30,000 each were being auctioned for £10,000 for a block of 9. That's a drop of £30,000 to £1,100 per pod, a loss of nearly £29,000 per pod or capital loss of over 95%.

UNREGULATED INVESTMENTS are hugely RISKY. Unless you fully know what you are buying and understand that you could lose your entire investment then do not invest. They are NOT suitable for putting your entire pension pot into and unregulatedGuaranteed Income Investment Pension Options are generally fake.

Dream Lodge Group Guaranteed Income Investments - Is it Safe?

Is Dream Lodge Group offering guaranteed investments a scam?

 A question was asked on the popular Money Saving Expert (MSE) website about Dream Lodge group selling holiday cottages for a guaranteed return of 8% per year.

It appears that Dream Lodge group were not happy with the comments that were made in the thread and have instructed lawyers to demand that posts are removed and that MSE users give their personal contact details in an effort to get content deleted. Some of the details here have been collated from posts about Dream Lodge Group from the thread where the posters have given permission.



I understand that a number of people have been contacted by the MSE administrator and that the Dream Lodge Group are now using their lawyers in an attempt to bully people into removing posts which question the wisdom of "investing" money with the Dream Lodge Group.

Whilst I am not going to purport to give formal legal advice on this thread, please be aware of the following:

- Under English law, ideas and opinions are incapable of defaming anyone.

- There is not even a requirement that the opinion must be reasonable - it must simply be honestly held and based on true facts.

- If anyone is looking for a true fact on which to base their honest opinion, I confirm that I owned a Dream Lodge which was valued by the Dream Lodge Group at £200,000 and carried that asking price. Upon selling that lodge, I received £75,000 for it. If that is not a true fact, the Dream Lodge Group and their solicitors already have my details and are perfectly free to sue me.

Obviously people must make their own minds up as to what to do but I would urge anyone who has been contacted to simply do a Google Search on the law of "honest opinion" before bowing to the Dream Lodge Group's aggressive tactics.

None of you are under any obligation to provide your personal details to the Dream Lodge Group or its solicitors.

Tuesday, 6 October 2015

Airport Parking Investment Scam Reviews - Is Airport Parking Guaranteed Income real?

There are many adverts that appear online for various investments offering what they claim to be guaranteed returns, sometimes in the order of 10-20% per year in things like airport parking spaces at airports such as Glasgow or Gatwick. In some cases the parking space may not even exist.


The reality is that these investments are not regulated and can lose ALL your money so any claims about guarantees should be considered as unenforceable - if the company offering the guarantee goes bust then it will not be able to pay out any investors making the guarantee worthless.


Some people may be targeting investors with a pot of money after the new pension freedoms who think that it's too risky to invest in the stock market and are attracted by the offer of guaranteed returns. What these investments in airport parking don't tell you is that the return is often only promised for a couple of years so after that you may receive no further money and your parking space may be worthless or valued at a fraction of what you paid.

If you are really risk averse and are swayed by the promise of a "guarantee" by these companies then this is not the investment for you. Stocks and shares ISAs may not guarantee the capital amounts but long term should beat cash and are regulated by FSCS so you will not be out of pocket in the unlikely event of fraud.

Monday, 5 October 2015

Dividend reinvestment example investment

A similar example but this time assuming all dividends are invested again rather than taken as income. Assume in 2011 you invested £10,000 in this investment trust. The price then was £6.60 per share so you'd have got 1515 shares you now own.

In 2011 you'd have received 28.75p income per share as dividends, that's a total of £435.56 and equivalent to 4.3% on your £10,000 but rather than taking that income you reinvest it to buy more shares. At £6.60 each that's another 66 shares you can add to your holding bringing the total to 1581.

In 2012 the share price had dropped to 640p so your £10,000 would now have been worth £10118, an increase on your original investment as it now includes reinvested dividends. However if you'd held your nerve and not sold out you'd have received your annual dividends, this year of 29.75p per share now based on the 1581 shares, a total of £470.34 so now 4.7% of your original £10,000. Again you reinvest this and buy another 73 shares with the dividends so your total now is 1654 shares.

In 2013 the share price had grown, this time to 741p so your 1654 shares would be worth £12,256. Yet again the dividends increased, this time to 30.75p per share and with your new total of 1654 shares you get income of £508.60. Once more you reinvest and add another 68 shares to your holding so you have 1722 shares.

Come 2014 and the share price had increased again to 779p making your 1722 shares now worth £13,414 and you receive dividends of 31.25p on them, now giving £538.12 income. Once you reinvest the dividends you get another 69 shares to add, making a total of 1791.

Finally this year your dividends have increased to 32p giving a total income of £573.12 which is 5.7% of your original £10k. The share price has dropped back a bit so it's now 705p meaning your investment of 1791 shares is worth £12,626.

In total over 5 years by reinvesting rather than taking the income out you've ended with an investment worth £12,626 compared to £10,000 originally and are now receiving an income of 5.7% of your original £10,000 investment and have an additional 276 shares now producing an income. This is an example of the great benefit of compounding returns.

Bear in mind this isn't speculation or "what-if" scenarios. These are real numbers showing how one real investment has performed over the last 5 years, a time period with volatility and that some have said the markets are too high to invest in. Even if markets drop now they'd need to fall 26% to take you below your original investment and you'd still be receiving dividends equivalent to 5.7% of your initial investment.

[few assumptions made, some rounding in numbers and that shares are reinvested once at the same price point each year]

Investments Returns - Real Life Example - How does Investing Work?

I received the annual report for one of my investments recently and with some comments here about investments being too risky or not understood thought it might help to give some numbers. These are for an investment trust - a company setup to invest in shares and the Investment Trust shares are themselves traded on the stock market so easy to see the value and buy/sell them. Some of these investment trusts have existed since 1868 so they have a very long term track record behind them.

Assume in 2011 you invested £10,000 in this investment trust. The price then was £6.60 per share so you'd have got 1515 shares you now own.

In 2011 you'd have received 28.75p income per share as dividends, that's a total of £435.56 and equivalent to 4.3% on your £10,000.
In 2012 the share price had dropped to 640p so your £10,000 would now have been worth £9696, a drop of £304 on your original investment. However if you'd held your nerve and not sold out you'd have received your annual dividends, this year of 29.75p per share, a total of £450.71 so now 4.5% of your £10,000.

In 2013 the share price had grown, this time to 741p so your shares would be worth £11,226. Yet again the dividends increased, this time to 30.75p per share, totalling £465.86.

Come 2014 and the share price had increased again to 779p making your 1515 shares now worth £11,801 and you receive dividends of 31.25p, now reaching £473.

Finally this year your dividends have increased to 32p giving a total income of £484.80 which is 4.8% of your £10k. The share price has dropped back a bit so it's now 705p meaning your investment is £10,680.

In total over 5 years you've received income of £2310.37, equivalent to 4.6% pa on your original £10,000.

In the last 5 years the stock markets have risen and fallen as you'll have seen on the news. Yet all the time you're receiving an income considerably above anything you get from a cash ISA and with no lock in. It's also completely tax free if held in a S&S ISA.

Hopefully this may make investments a little clearer and help reduce some of the misinformation about risks. Yes the price of shares does go up and down but if your main concern is income and you have no need to access the money then it could be worth investigation.