Those, who read this blog, probably have noticed, that I've been very critical not only of many P2P platforms, but also P2P bloggers, who promote them. Most of my attention has gone to Jørgen and even if I don't have any personal issue with him, I am not a fan of the damage he has caused. How big is it? Let’s try to figure it out.
Before I start, let me make some things clear:
I have nothing against making money with affiliate programs. I have been using them myself.
I have nothing against bloggers getting paid for their work. I have been paid for a platform review myself.
I don't think that every P2P/financial blogger should disclose everything about his income & investments. But if you promise it, then deliver.
What is the problem with Jørgen & his copycats?
The things I will list below applies to many blogs, but the most popular one was Jørgen’s blog, and many tried to copy his approach. So let’s see why I am so annoyed by him.
1. Finding good investments?
In his “about“ page Jørgen says that “the tricky part is to find good investments”. If we look at the content of his blog - his monthly portfolio updates, platform reviews and trips with his mother to do interviews, visit objects etc., then it looks like Jørgen is doing this “tricky part“ - finding good investment opportunities.
So for his readers the impression might be - follow this guy, he is doing proper research and he probably knows what he is doing. He is making lot of money, so it must be working, right? False.
Jørgen is losing money with his “investing“ and so are his followers. He is the drunk captain of P2P Titanic - if you want to join the dumb money party, please do - it will be fun, but you won't find any treasures, that is for sure.
2. Full disclosure and transparency?
This text was in his “About“ page until a week ago. After I called him out in Telegram, he removed it. What was my main problem? Jørgen has been promising for years to be “naked“ and “transparent“ about his income, expenses, investments, etc.
This was his way of selling himself, but what was the reality? It was true in the beginning, but at some point, when his earnings from affiliate deals became too big, he removed info about affiliate income. Why is it a problem? Couple of reasons:
He continued to promise full transparency, but did not not provide it
His affiliate earnings became larger than returns from investing, so his motivation changed as well - it became more profitable to promote shady platforms than to do investing - doing research and taking real risks
He still wanted to keep the image of an investor, so he started hiding his income from affiliate deals, became less transparent and investors who read his reviews - were not aware of his true motivation. For him it made sense to invest 20k EUR in a shady platform and maybe lose it later, if he knew - that from affiliate deals he can make 5x as much or more. In short - Jørgen went from a P2P blogger to a P2P promoter, but still wanted to keep the old image.
3. Safe investments?
If you are blogging not because you want to “share your journey“, but to do business - then what do you do? Buy traffic from Google and overpromise. This is one of the ads that Jørgen was using:
So how safe are his investment recommendations? None of the P2P platforms he has reviewed - are regulated. Serious investors would not even consider placing their money in them. But Jørgen? Sells the biggest P2P shit you can find as “the best investments“.
I am not joking. From 14 platforms in his portfolio you can find stuff like this - Kuetzal, Envestio, Grupeer. These 3 have already shut down and are considered as scams. At least 2 more platforms of his portfolio will end the same way. So 1/3 of platforms that he promotes are the biggest junk possible.
And if you look at his portfolio - it is a joke. 20% or 78k EUR lost in last 3 months, 93k EUR frozen in Crowdestor for at least 3 months, and who knows - what happens in other platforms who has chosen.
When the year will end - I expect that the value of his portfolio will be reduced by half. It will be hard to find a worse P2P investor than Jørgen, and if there is such a person - then he probably is reading Jørgen’s blog or invested everything in Somalia.
In short - unregulated P2P platforms are not safe, Jørgen is promoting junk. If you hate someone and want him to lose money, send him to Jørgen’s blog. Otherwise, stay away - I am sure you can burn money in a more fun way.
4. Promoting scams?
When I reviewed one of the Envestio projects - it was obviously too late, and platform shut down a week later. But straight away I found many issues and my first impression was following:
I would not trust them with my money.
And among many investors there were doubts as well, but what about Jørgen? He was so sure about Envestio, that he actually included this kind of question in his Envestio review:
And he defended Envestio till the last day, when it was taken offline.
So where they a legit company? No - they shut down, investors most likely lost tens of millions of EUR. Investigations are still ongoing.
5. Hiding losses
Those, who blog with the idea to actually learn something & share their journey - they won't have any issue of sharing their failures as well. But if your blog is a business and you sell “safe investments“, then losing money won't look good, right?
That is what Jørgen thought as well. So after Kuetzal & Envestio shut down and Jørgen lost a lot of money, he was not happy to be as transparent as he promised. In January 2020 he lost more than 55k EUR, but tried to manipulate the numbers and show that he actually made a positive 10.41% return.
6. Ignoring warnings
Some people might think that Jørgen had no idea that P2P platforms that he promotes as “safe“, actually have many red flags. I am confident that at least in 3 cases Jørgen was well aware of issues, but decided to ignore them:
FastInvest - in his review, in comments section there is a long, detailed comment about the shady past of FastInvest founders. It does not look good.
Kuetzal - Jørgen was warned about a specific project in Kuetzal that it does not make any sense at all and was offered detailed review/proof. He dismissed it.
Envestio - I have spoken to a guy, who sent lot of info about red flags in Envestio to Jørgen months before it crashed. Jørgen ignored all of it.
Why was he so ignorant? Because he was incentivized to live in a pink P2P bubble, defend all the shady platforms and promote the hell out of them. He even brought his mother along to his trips.
7. Deleting posts & comments
Jørgen is known for deleting both his & his reader comments in his blog, and he has deleted his own comments in Facebook as well. But after Kuetzal & Envestio blew up, he also deleted posts from his Facebook group that were pushing investors really hard to invest in Kuetzal & Envestio.
So where is the transparency? I will tell you where - in investor accounts after they trusted Jørgen’s claims that something is not a scam. Investor accounts will be so drained & transparent like the vodka bottles that they will empty afterwards.
Ok, Jørgen is not very honest, who cares?
I have not invested in anything that he promotes, so personally - I don't care that much. And I must admit - he is very good at marketing all the shady stuff, it clearly convinced many to follow him and do investments based on his reviews.
And even if I did not read his blog before, I had noticed how aggresive Jørgen was in promoting/defending the shady platforms over the years (in FB groups and even in my blog) and how much bullshit he promises (full transparency etc.), but does not deliver, so couple of times I called him out with following question:
Of course, Jørgen did not answer to me or others, who asked about this. Why? He made so much money from investors who lost so much, that some people might consider his blogging activities as shady as the P2P scams he is promoting. And that is not something he would like to admit.
Honesty for Jørgen might not work at all, he still needs more dumb money to follow him on the journey to financial ruin. Sorry, I meant financial freedom to Jørgen:
How much did Jørgen earn?
Lucky for me, I don't have to do much research. One of Jørgen’s previous followers shared his findings with me. He lost €90 000 in Envestio and €35 000 in Kuetzal, at the same time from his total loss of €135 000 Jørgen made a profit of €3 125.
Both Kuetzal and Envestio offered 0.5% bonus to investors and paid 2.5% in commissions to bloggers. Of course, investors could not make use of their “bonus“, because both platforms later shut down with all the fake projects, fake interest & fake bonus payments, but on the other hand - no problem for bloggers. Bloggers got paid by Target Circle / CircleWise affiliate platform, and affiliate platform got paid by scam platforms, which received investor money.
In short - investors paid to everyone who fucked them along the way - scam platforms, affiliate platform and bloggers, who recommended that shit.
So how is this guy feeling now? Let me quote him:
I have been a P2P investor for many years and have followed Jørgen for a long time. He may not take responsibility for his actions, but I count him 100% responsible for my losses in Envestio and Kuetzal. I am furious at how he refuses to apologise to the people he influences.
I estimate his referral income could be as high as €500k and we can infer this from the information with a few assumptions about tax etc.
I think people need to understand WHY he invests in the highest risk platforms:
1) Its not money he sweated for - easy come, easy go
2) It means he can refer lots more investors and make even more money.
The amount he lost in both platforms is NOTHING compared to how much affiliate income he earns from promoting those scams.
The community should know.
An estimate of Jørgen earnings
If you want to follow and check all calculations, open this Google Sheet document.
You will see in the first line the sources of the data. Note that Jorgen may take those pages down (as he did with the affiliate income in March 2019 when he redacted all information about it from his previous posts).
Columns A, B, C, D come from his investment history page. You can see where he invests his money and how much in each platform. Total investment of capital is €248,871.
Column E shows the investments he made in two properties, total cash used was $79,280.
So the total of his known investments are €328,151
The other side of the equation is his income, which he also helpfully posts on his website under 'saving rate'.
The salary is net of tax, so tax has already been deducted from the figures. I used an online calculator to see what his marginal rate of tax is in Denmark. It is 56%. So everything he earns on top of his salary is taxed at 56% marginal rate. The amount he saved from his income over the 4 years since 2015 is €104k.
Here you can also see the screenshots for the data that he redacted, which shows his affiliate income at over €90k for a 7 month period before he stops posting the info.
The timing of the income compared to his Envestio visit, shows that most of this comes from Envestio. He even admits in his December post that 'a good portion' of his income is coming from Envestio.
After I read his Envestio visit, I also invested there because he made it sound so legitimate - meeting all the people, showing us the projects. Stupid me. And stupid everyone else that followed him.
It is also worth noting that before 2019 there were not so many blogs. The proliferation of blogs we have today are mostly people who SAW Jorgens affiliate income and tried to copy his model to get in on the action. So back then there were not many blogs, and so almost all of the investors brought onto the envestio platform in 2018 and the first half of 2019 were due to Jørgen. He does not care to admit that now of course.
Anyway, so then on the spreadsheet I made a simple calculation, if Jørgen can invest €328k in P2P and property, but he was only able to save €104k from his salary over 4 years, then the balance must be from somewhere else. We know he earned €90k from affiliate income over 7 months before he stopped posting it, but we dont know if that was the amount before tax or after tax.
So then I made two estimates for the amount Jorgen has earned from affiliate income (so far).
The figure €326k is calculated based on the €90k of affiliate income from the screenshots being an 'before tax' amount (i.e. he still needed to deduct the tax amount from this figure).
The figure €395k is calculated based on the €90k of affiliate income from the screenshots being an "after tax" amount (i.e. he already deducted the tax amount before posting it on his blog - this would fit in with the way he calcautes his salary - everything net of tax).
We can never know how much of his income came specifically from Kuetzal and Envestio, but my guess is that it could be as high as 75%, because those are the two platforms he was really pushing to his subscribers in his private Facebook groups (the posts are since deleted, of course!) and those are the platforms where he did the visitations and told everyone that EVERYTHING WAS FINE!
How much did investors lose?
If we estimate Jorgen’s earnings from P2P platform promotion at €400 000, and €300 000 (75% from that) coming from advertising Kuetzal and Envestio, then we can also get an estimate - how much damage he did to investors, who trusted his reviews and used his affiliate links.
For Jørgen to make €300 000 with a 2.5% commission, investors would need to “invest“ at least 40x as much, so math is very simple:
€300 000 / 2.5% = €12 000 000
If these estimates are even close to truth, investors had to invest in Kuetzal and Envestio at least 12 million EUR! That is just an insane price to pay to get Jørgen a bit closer to financial independence.
And we cannot ignore that Jørgen also promoted Grupeer - he visited them even two times! If we would assume that only 12.5% of his earnings were from Grupeer, and knowing that Grupeer paid 1% in commissions, then math would look like this:
€50 000 / 1% = €5 000 000
Another 5 million EUR! So in total - investors who followed Jørgen’s ideas about “safe investments“ might have invested (and potentially lost) around €17 000 000 in total - and that is only after 3 platforms have shut down. But it will get worse - there will more cases like Kuetzal, Envestio, Grupeer.
And this estimated damage is caused only by one guy. Imagine now all the people who read about Jørgen’s adventures in last couple of years and decided - “hey, that is a super easy way to make money. I also want to retire in Portugal.“ Now we have hundreds of the same type of P2P shit promoters, all can be recognised by one or more of these attributes:
All or most of their money is invested in P2P
They have no idea what they are doing
99% of content is positive reviews + portfolio updates
There are no critical reviews, incentive is to sell stuff
They promote the idea of investing in many P2P platforms
They don't do any research or due dilligence
They are losing money with P2P
Who is responsible?
Depends who you ask. I personally think that 90% of blame should go to investors themselves. I mean - you cannot forbid people to do stupid investments and even if there would not be these kind of P2P platforms, the same investors would probably find a different way how to lose their money - in crypto scams, Forex trading, MLM, binary options, etc.
But of course that is not what investors expect to hear and probably most of them could deal better with knowledge that they did a failed/bad investment and lost part of their money, but none of them expected to be scammed with fake projects etc. and end up with potentially losing 100% of their investment.
So who could they potentially blame?
Founders of shady/scam P2P platforms, but the same founders could respond - that this is easy/dumb money and would have been lost anyway. They just pick it up. And better for money to stay in Europe than send it to Nigeria, right?
Governments that allow these businesses to exist with no oversight, but they could respond - that there are more important things for them to worry about - money laundering, regulating banks, etc.
Affiliate network TargetCircle / Circlewise, who partly created this “industry“ - they were involved in promoting Kuetzal, Envestio, Monethera, Grupeer. But they could respond - it is not their job to research/investigate P2P platforms.
Bloggers that promote these shady P2P platforms, but they could respond - that they are just regular investors, don't have the skills to do any due dilligence and are victims of it all, just like the investors.
Critical bloggers/investors. I've seen some investors blame those who ask too many serious questions because they might cause panic/bank run etc. I won't even bother to respond.
All the Facebook investor groups similar to “P2P investment fellows“ - my posts about bloggers are removed there, but monthly portfolio updates from bloggers are more than welcome. Just another channel where to read positive stuff, but too critical things will be censored.
As you can see - no one likes to take any responsibility. But I am really annoyed & tired of all the positive hype that is created by the P2P promoters, so that is why I want to show also the darker side of it.
But if I was a victim of any of the P2P scams, then I would not spend my money on collective lawsuits against the shady platforms - if their founders are smart (and obviously they are smarter than most investors), they have already sent the money far away. Recovering anything significant is very unlikely.
On the other hand - note that all the bloggers still have 2.5% of your investment, and Target Circle / CircleWise probably made something similar as well. So if I wanted to recover maybe 5% of losses, I would sue the affiliate platform & the biggest P2P promoters - they have not gone anywhere, on the opposite - they are continuing business as usual.
Even better - this is what one of TargetCircle/CircleWise employees, who also organises the P2P conference in Riga, thinks about investors, who lost money in the same platforms that his company & conference promotes:
Update @ June 8th, 2020
An anonymous reader sent a link to Jørgen’s companies 2019 financial report.
Jørgen Wolf’s estimated earnings: €400 000, damages: up to €17 000 000
P2P promoters are not your friends, they lose money & help you do the same
Affiliate network in the middle of this compares investors to drunk drivers
No one wants to take any responsibility, but investors pay for everything
Regulation of P2P platforms is urgently needed
P.S. Join “High-risk investments“ Telegram group for an informal discussion.