Hey guys, Ryan here from Instructions Not Included. Today, I came across a very interesting problem that I haven’t really come across before.
I was actually interviewing someone and had to stop the interview halfway through. And then, we got into a quite interesting discussion.
The reason I had to stop the interview was – I run a website, OnProperty.com.au, which is about investing in property in Australia and I was interviewing a company that does crowdsource real estate investing.
So, basically, you’re investing in a syndicate. We were talking about it and then I talked about, “Well, how do you guys make money?” The way that they make money is actually something that, I guess, I would say I fundamentally disagree with it.
It has just caused the industry to be really dodgy and a lot of people to get sold bad investments. Basically, the way that they were paid was they would receive money from the developer who was building a property in order to sell that property.
They’re selling this property to investors. Crowd-funding, so they’re selling one property to 50 or 100 investors but they’re actually getting paid by the person who’s making the property and selling the property and so I find it’s a very big conflict of interest.
When you’re saying, “Well, this is an investment to invest in” but I’m actually getting paid to sell the property, I’m the sales person of this investment. Because of the fact that commissions are discretionary, they could be 1%, 2%, 5% or they could be $5,000, $20,000, $40,000, $80,000. It’s just completely discretionary and the way that it’s disclosed is generally in the contract which people don’t actually see.
It’s somewhere in the fine print. So, I have a big issue with this because friends of mine have been screwed over by property investing companies. There’s just so many bad things going on in the industry.
I was actually in the position where we’re halfway through the interview and I find out that this is how they make money. I actually had to say to the guy, who was super nice and I think he’s definitely got the right motives, probably going to be quite successful. But I just disagree with it and that’s my stance. So, nothing against him or his company. I’m not saying they’re doing anything wrong. But yeah, I had to say halfway through the interview, “Look, sorry.
I actually can’t go ahead with this interview and I can’t publish this because I’ve made a personal decision not to share or recommend companies that make money in this way.”
The reason that I’ve made that decision is because I can’t see these companies’ financials, I can’t control any aspect of it. The reason that I struggle with it is the fact that it’s discretionary. They could be doing a great job and charging a low fee today but then tomorrow they could up their fee significantly.
Customers wouldn’t really know and customers could be overpaying for properties. And so, I get really stressed out about that and I get stressed out about the audience that I have and the need to, I guess in a way, try and help them and try and protect them. But then I feel like, should I really be protecting them? They’re adults; they’re making their own decisions.
Who am I to limit their access to information if they want to learn about this stuff? And so, there’s that moral dilemma there – of I only want to present things which I actually think is probably going to be good but then I never know. And so, who am I to say this is good and this is able to be viewed by the public and this isn’t?
The truth is, I don’t control all the information. So, obviously, these companies can market in different ways. But I do have a large audience, there’s thousands of people everyday coming and following my site. There’s 10,000 people subscribed to my email list. So, it’s a big audience and we’re talking about money and it’s a big weight on my shoulders.
I guess that’s a slight moral dilemma that I haven’t fully dealt with. I believe in one thing but should I actually impose that upon my readers and my listeners and not share with them and silence information that I disagree with? I guess that’s part of the power of being a media company and one of the hard decisions you have to make. You have to decide morally what you want to share and what you don’t. I guess that’s something that I’m just coming to terms with.
I’ve never been halfway through an interview and then have to cancel it because I disagreed with the way they made money and didn’t want to share that with my audience. So, yeah, that’s where I’m at today. It was quite and emotional thing because after I had said that – that was about 20 minutes into the interview – we then went on without talking for about 40 minutes where he tried to, I guess, convince me that I should recommend his services and convince me that it wasn’t a conflict of interest and all of this sort of stuff.
I don’t know, I just think if you need to convince someone that it’s not a conflict of interest, it probably is a conflict of interest. If you actually need to sit down and fully convince someone it’s not a conflict of interest because of X, Y, Z, even though it looks like a conflict of interest, that’s pretty scary to me.
I just try and be super transparent with my sites. With On Property, I’m a teaching company; I make money through selling access to my membership site, through selling eBooks, through selling courses. Whenever I refer someone on to my buyer’s agent, which is Ben from a site called Pumped On Property, I always tell people, “I get a referral fee if you end up going through him.
So, just so you know, I’m recommending him but I get a referral fee. So, take my recommendation with a grain of salt.” And people appreciate that and they still go through him anyway and I still get referral fees anyway. But I try and be transparent, I try and disclose that and I’m hoping to be more and more transparent into the future.
I’m definitely thinking about being more transparent to how much money I make. Because, that way, if you’re transparent and if people aren’t okay with it, they can say something.
I don’t know. That’s just the moral dilemma I’m dealing with as a media company and my beliefs that you should be transparent, not have conflicts of interest and –
I don’t know. What do you guys think? What do you think? Should I share things that I disagree with because people have a right to access this information or should I leave it up to the companies that are doing this to market themselves and to provide that information to people? I have no idea.
I would absolutely love your comments on this. What episode is this? I’m just trying to find out which one. Okay, so this is episode number – I don’t know. Hold on, bear with me one second. I’m just going to get the episode number so you guys can go and leave comments on the blog. Alright, so, 21st of July was episode 28. 29, 30, 31. Okay, so this is episode number 2. So, go to ryanmclean.net/32 or 3-2 and leave comments on this.
What do you think, should I be sharing this information even though I disagree with it because people have a right to access this information or should I leave it up to the company? Would love to get your feedback, ryanmclean.net/32 or you can email me, ryan@ryanmclean.net.
Until next time. If you want instructions, go and buy some furniture. As you can see, I’m doing this with no instructions. Is there a moral guideline for this? I don’t know. I don’t think there is. Yes. Not as many instructions running a business as there is making furniture. Alright, peace out guys.
Leave a Reply