There has been some press recently about the Money for Living scheme. Basically it targetted asset rich cash poor retirees. The plan was that the retiree would sell their home to the Money for Living crowd in exchange for an upfront payment of $40-50k and then monthly payments for life. The company which had bought the home would also rent the home back to the retiree for their lifetime, i.e. a kind of sale and leaseback. So it sounds like a win-win deal...the retiree gets to realise their untapped equity to enhance their lifestyle with the reassurance of staying in their own home. BUT sadly it didnt work out out that way... These poor retirees were duped by glossy brochures and reassuring ads featuring Dawn Fraser and Paul Cronin (that guy from the Sullivans) If only these retirees had some basic financial education or at least taken some independent legal or financial advice they would have realised what a bad deal they were getting! This was entirely different from a so-called "reverse mortgage" (which of itself is not a particularly good idea in my view...but that's a topic for another day). The retirees were not borrowing against their home as security, instead: 1) the retirees sold their home; 2) got paid in instalments rather than up front as is usually the case in a sale; 3) lost any future growth on their home; 4) left their future "pension" style payments (which was in fact the proceeds of the sale of their home) entirely up to the financial viability of the new owner of their property. I.e. they took counterparty credit risk - and lost. As it turns out Money for Living made its money by on-selling the properties to third parties for a fee. It also effectively kept some of the properties for itself by selling them to a related company. Money for living went into administration and thus the tap for these retiree's future income steam got turned off. The guy running it was a convicted fraudster. Whilst it seems that some of the retirees did get legal advice...from a firm recommended by Money for Living...and placed caveats over their former homes to stop them being on-sold, that still leaves them in a very precarioius position, having lost their ongoing payments and perhaps having to go to court to enforce their right to reside in the home. I think the key lessons to take from this sorry saga are: 1) get several opinions before entering into a big transaction like this. NEVER rely solely on advisers recommended by someone selling you something. 2) don't sell assets unless you get paid up front for the full market value 3) don't believe celebrity endorsements or glossy brochures (in fact a rule of thumb adapted from annual reports should be that the more pictures of smug looking grey-haired retirees walking on the beach or sailing the less sound the product!) Whilst the endgame for Money for Living is still to play out, I think one of the really sad things about this story is that with the right advice many of these retirees could probably have achieved their objectives safely and comfortably whilst keeping their home. N.