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Horrible Cousins Of Investments That Were Originally Good

If you’re not a professional in the field, best to stay as far away from these “investments” as possible.


There are many types of investments that you can make to grow your wealth. Many are reasonable investments with differing risk considerations you need to understand before going in. Others are investments you are better off completely avoiding.

In this article, we share some investments that were originally conceived with good interests but have mutated into investments that trap people.

Also Read: Who’s Responsible For Sub-Par Financial Products In S’pore?

1. Investing In Gold

Gold typically represents an alternative for people holding lots of money but do not fully trust the currency that they are holding on to. Historically, gold has been recognised as the go-to asset whenever people are worried about their currency losing its value. If you are a high networth individual, then there should be some space in your portfolio for gold.

Gold is a negative cashflow asset. Unlike other asset classes such as stock and bonds, gold does not generate any return on assets. Rather, investors would need to bear the cost of holding gold in the form of storage, insurance and security cost.

“Investing” In Gold Scams

Not contended with the fact that Gold is a negative cashflow asset, some geniuses decided to solve this problem by selling gold to consumers and offering a guaranteed return of 2% per month to invest into it. On top of that, these companies guarantee to buy the gold back from you at the initial cost price, or the current market price, whichever is higher.

You don’t have to understand investing to know that this deal is good, too good even. A guaranteed return of 24% annually is not possible on many investments, let alone one as safe as gold. Nevertheless, it didn’t stop some Singaporeans from putting in their life savings to it.

2.Investing In Property

Investing in property is a favourite Singapore pastime (ourselves included). You buy a property, you rent it out for passive income and perhaps after 10 to 15 years, you sell it at a nice big profit. Particularly in Singapore, where land is scarce and the economy is healthy, it appears like a sure bet.

“Investing” In Property In The Form Of Land Banking

Rather than buy a land, engage architects to design the building, seek authorities’ approvals, engage a contractor to build it, and then get marketing agents to help sell or rent it, some people decided that it would be a lot easier just to buy a piece of land and sell it at a tidy profit instead, without going through the hassle of actually developing it.

And because an empty field right smack in Orchard Road wasn’t readily available for land banking, some scam artists decided to source for empty plots of land in other countries instead. And that’s how land banking started.

Singaporeans are such suckers for land (because we obviously don’t have enough of it in our country) that we somehow don’t realize that huge parcels of undeveloped land sites exist all around the world in abandance. And being Singaporeans, we were willing to pay a premium for such land sites without ever spending a second researching its potential for development or whether it even existed.

3. Investing In Timeshares

In the past few years, the sharing economy has really taken off in various sectors such as tourism (Airbnb) travelling (car-pooling, car-sharing) and even money lending (peer-to-peer lending). However, not many people remember that a similar concept in Time Shares actually started way before that.

Read Also: How Peer-To-Peer Lending Can Help SMEs

For those who are not familiar with timeshare, it basically allows investors to co-own properties (usually hotels or villa in tourist destinations) with other investors.

Conceptually, it sounds reasonable. Rather than pay exorbitant hotel rates whenever you are travelling to a holiday destination, why not invest in a property, or a network of properties, which you can call your very own?

To make an already reasonable deal even sweeter, the property (or properties) that you co-own can even be rented out whenever it’s unoccupied to generate passive income. It sounds like a great deal and there are people who genuinely invested and enjoyed their investments.

“Investing” in Time-Sharing

Contrary to what many Singaporeans think, timeshare was actually fairly popular in Europe and the United States.

Unfortunately, the trend caught on pretty quick and it wasn’t long before property owners and timeshare salespeople started realizing that they could dupe Singaporeans to start buying their properties via the timesharing method. Not only could they offload their existing properties, or find buyers for new developments that they were building, but they could also earn annual management fees running these properties.

Most Singaporeans parted with tens of thousands of dollars only to realize they acquired sub-par properties which had almost zero resale value.

Instead of these horrible investment ideas, instead read: 4 “Must Have” Investments That You Should Have Already Made

What are some other horrible investments that you can think of? Share it with us on Facebook.

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