Business Advisor Launches New Series Exposing Investment Pitfalls in Haredi Sector
Business consultant Micha Shulam has launched a new, critical series titled 'Dangerous Money' on the Kikar HaShabbat website, aiming to expose common investment mistakes within the Haredi (ultra-Orthodox) community. The series, which Shulam emphasizes is free of marketing content and hidden agendas, delves into the reasons behind significant financial losses experienced by many in the sector.
In the debut episode, Shulam discusses his personal involvement in exposing the 'B'sadno' affair, a case where his due diligence revealed a complex network of 96 companies operating on a model of guaranteed interest loans rather than genuine investments. This investigation, initiated when a client sought to invest NIS 400,000, ultimately led to the company's liquidation and a criminal investigation into the disappearance of approximately NIS 500 million.
Shulam argues that the primary issue for the Haredi community is not solely outright fraud and Ponzi schemes, although he details several such cases including the Mike Ben Ari scam, Elchanan Schwartz's embezzlement in the US, and Lior Moshe's false promises of high returns. Instead, he highlights that many individuals lose substantial sums through legitimate, yet fundamentally unsuitable, investments.
He uses examples like the popular 10/90 and 7/93 real estate deals, where buyers made small down payments expecting quick profits before receiving keys. However, rising interest rates and market stagnation left them unable to sell or secure mortgages, resulting in heavy cancellation fees and losses. Similarly, investments in agricultural land, promising high returns within years, often get bogged down in lengthy settlement processes, leading to capital erosion and actual financial loss.
Shulam concludes by likening the situation to a doctor who also sells the medication he prescribes, urging individuals to seek advice from independent consultants who do not profit from the specific investments they recommend. Future episodes of 'Dangerous Money' will offer practical tools and criteria for making informed and personalized investment decisions.
