In this article, we meet Scott Picken, CEO and founder of Wealth Migrate, who has big plans to democratise access to global property for everyone, not just the super-rich. He is using community-led advice on investments, providing a trusted investment platform and blockchain of course.
How do we bridge the wealth gap? According to Oxfam’s annual report, the gap is getting wider. We’ve seen other reports where the flight of money to the uber rich is growing, the middle classes are being squeezed out and if you are below that economic threshold then forget it – you are doomed to be a feudal subject never achieving the dream of financial freedom. One percent of the world’s population owns 83% of the world’s wealth. That is a shocking statistic.
Scott Picken has first-hand experience of the squeezed middle-class experience. His family came from Zimbabwe and were farmers, but their land was reassigned in 1976. They moved to South Africa the following year when Scott was born. His father was university educated and turned to finance as a career. He was successful and finished his career as Financial Director for a listed company. He paid taxes and followed investment advice but, when he died in 2005, he was flat broke. This is not an unusual experience but it is just one that we don’t recognise as yet.
In the Western World, a huge 94% of all people will die broke. Five percent will be financially independent, which is measured by having only 25% less money than their final pay cheque. Only one percent will be wealthy at death. This is not in emerging countries but bang in the middle of the Western World where middle-class people are highly educated and have worked hard and paid large taxes all their lives. The system is broken.
Scott is conditioned by his father and his financial experience. “I learnt time and again from my father that I should diversity and not put all my eggs into one basket but without sufficient funds, this is not available to the average worker.”
At this point, I am going to interject that Scott’s project, the Wealth Migration Project, is in several stages. The initial push is to make good the ‘American Dream’ for professionals but the other stages will push that aspiration down to the track for people from lower, eventually all, socio-economic bands. “I am talking about extending financial opportunity to as modest an entry point as one dollar – one dollar invested will not make you rich but changing your behaviour to invest one dollar will.”
Scott has always been interested in using tech to change the way we work and, in this case, how we look at property.
From an early age, property has been a passion of Scott’s, perhaps stemming from the loss of family land from before he was born. He studied a BSc in construction management. His first practical construction project was to convert a triple garage into a two bedroom and two bathroom apartment. However, he learnt a costly lesson about regulation at this point as he had not obtained the required planning permission. The result? A charming house forever hidden behind garage roller doors which had little or no resale value.
He moved to London when he was 21 and worked for an Irish construction company. He enjoyed the work but found he was increasingly doing property deals outside office hours, selling South African property to UK residents and British property to South Africans. At the same time, he studied a full-time masters in construction. “That’s actually illegal,” he says in passing and I go and google it but the internet is disappointing, returning no clarity at all, just lots of people doing masters while working three part-time jobs. How does that work?
Scott continues, not knowing that my mind has flown to that illegality of his time in London. “I believe very much in partnership,” he says. “And so I banded together with other like-minded people to create opportunities.” This concept of partnering would make a big difference to his business model down the road.
While working with the Irish company he installed a new technology platform which earned him a seat on the board but also gave him itchy fingers.
“I was never meant to work for anyone else – I was always meant to be an entrepreneur.”
As a result, he set up International Property Solutions (IPS) and launched a seminar in London which attracted 120 people, some of which were friends supporting his new endeavour. That day he sold 14 properties and he knew he was onto something.
Of course, Scott was cruising in the boomy years of the late 2000s. He was selling on average 400 properties per annum and one day managed to sell an astonishing 87 properties in 24 hours straight.
When the crash came he had to look at his business model again. “I had 2500 customers but they were divided up into three distinct categories.”
First of all, there the people with a desire to invest but who did not even have a deposit. Then there were those who had deposits and who thought they were savvy enough. The final group had plenty of money but had no idea of what they wanted to buy, especially when it came to overseas property.
A solution to unite his client base came in the form of a large commercial development in London with high yields and a strong discount. The trouble was, it cost $10million and he could not get the different clients to go into business with each other – nobody trusted anyone else.
“I knew then that I needed technology to solve this issue and so I started building a platform that provided the technology to shape the community as well as incorporate the different regulatory requirements of international jurisdictions.
The result has been impressive. Over the first four years, IPS has invested in property in more than 125 countries, has directly raised $80million and has formed part of $500 million worth of deals.
Key to the success of IPS was the trust between platform and clients and so when Scott met blockchain he knew he had the final key to the property puzzle to reach a global audience.
“In 2014 when I first discovered blockchain I understood it to be the foundation for social commerce where people could come together and engage in commerce in crowd-funding patterns without needing to know or trust each other.”
Scott has a six-phase project where he is just working on the initial plans. “Using blockchain I can bring in trust and then look to execute on a vision where one dollar will be sufficient to start investing. Basically, I want people to be able to swipe left or right to make an investment decision. It’s not the amount but the behaviour.”
IPS was bootstrapped initially but a chance read of Behind the Cloud by Salesforce founder and CEO Marc Benioff radically changed his thinking and approach.
“In the book, Marc Benioff was on the investor circuit looking to raise money and explaining his idea of how he would store the data in the cloud. This was in the last century and the cloud was only new. All the investors ran a mile when he said he wanted to store sensitive customer data in the cloud.
“He turned this on its head by approaching customers to be investors and so he built a database of customers committed to the company as they were also co-investors.
“I could see this would be a way for me to build my company. So people that wanted to buy property could also see the value of what the company was doing, with the result that I was building a community of invested people.”
Scott called these customers wealth partners and now he has 140 signed up with more than $13million raised. “I thought: what if I could grow that number to 2000, how much more powerful would that be? A committed crowd-sourcing collective.”
Currently, Scott is crowd-sourcing with Seedr, the leading crowdfunding platform for startups. Seedr is an FCA compliant crowdfunding platform where individuals can invest as little as $10.
He had to go through the loops to get accepted – conditions he accepts, as no one wants to invest in a dud – and his project was launched last week. Within 48 hours they had raised $750,000. Within a further 48 hours that went to $1 million and they are well on their way to their cap of $2million.
“Building a tech company is expensive,” he says. “I needed capital to build out the platform and I also wanted investors who had skin in the game. This will make a huge difference to our community.”
I had a sudden thought: what if the property opportunities selected are duds, not the company but the properties? Scott pauses for a moment but he has already given this some thought.
“For starters, this can be a given. Consider Uber or Airbnb. I am sure an Uber taxi has been in a crash or that someone had a bad experience in Airbnb. But the community is self-regulating in those industries. It can be the same here. Initially, we are working with the UK, America and Australia where I have personal experience but we will branch out using the community.
”We begin with due diligence, grey hairs, and partners in our selected countries but move to community-led investments.
“Consider the Britannica Encyclopaedias – they were created by a few people. Compare that with Wikipedia, which holds endless amounts of data across endless sectors and is managed by millions of people. There is no comparison to be honest.”
At this point, I also have to interject that I have an unconscious bias or is that a conscious unconscious bias? The initial thrust of Wealth Migration is aimed at educated, middle-class professionals. I am one of that breed. Yet somehow I am feeling guilty that the middle classes are being helped and not other workers. Yet, are not the middle classes worthy of help too? Especially when one realises that under current market conditions they are been squeezed out and statistically proven to being rendered insolvent at death.
So, while I make a big effort not to feel so guilty I can also assuage my discomfort at the bigger vision of Wealth Migration that aims to include 1 billion people in its scope, delivering global personal financial freedom.
This is echoed by Scott’s passion for extending the entry level for opportunity to a solitary dollar. “I feel a personal purpose of mine is to eradicate the wealth gap. I also want to empower young people, indeed children, to become entrepreneurs. After all, if they can be sportspeople or musicians from a young age why not entrepreneurs?
“Then I want to extend education for women and finally empower the 99% of all people to be able to retire or die wealthy or at least not in poverty.”
It is a huge proposition and Wealth Migration has a powerful impetus: to democratise the opportunity to invest in global property for everyone. Based on community, inclusion and trust, Scott has instinctively built a model that copies blockchain imperatives yet pre-dates the technology. This is not unheard of: Estonia created a digitally-advanced society ahead of the blockchain revolution, UK-based Mulitven created a decentralised cyber community with Hal Finney before Bitcoin was born. There are other examples in history where great movements are copied before they come into being, as if filaments of thought can stretch back in time as well as in front.
If we can pull the 95% currently doomed to die in poverty and return them back into financial solvency, then Wealth Migration will do a great thing for society and people’s personal wealth. And with my conscious unconscious bias, I also welcome the entry-level extending down to a single dollar.