Do You Sincerely Want to Be Rich? : The Full Story of Bernard Cornfeld and I.O.S.
In the fall of 1955, Bernard Cornfeld arrived in Paris with scant money in his pocket and a tenuous relationship with a New York firm to sell mutual funds overseas. Cornfeld, a former psychologist and social worker, knew how to make friends fast and soon targeted two groups of people who could help him fulfill his economic ambitions: American expatriates who were looking to build their own fortunes and servicemen abroad who loved to live high-rolling lives and spend money. Using the first group as door-to-door salesmen and the second group as his gullible target, Cornfeld built a multi-billion-dollar and multi-national company, famous for its salesmen's winning one-line pitch: "Do you sincerely want to be rich " In this eye-opening yet entertaining book, an award-winning "Insight" team of the London Sunday Times examines Cornfeld's impressive scheme, a classic example of good, old-fashioned American business gumption and guile.
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May 16, 2005
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Excerpt from Do You Sincerely Want to Be Rich? by Godfrey Hodgson
A Warning to Investors from Mr. Bernard Cornfeld
In which we introduce Bernard Cornfeld in the role of international economic statesman and give a preliminary statement of the real nature of Investors Overseas Services.
It was Bernard Cornfeld's declared ambition to make Investors Overseas Services the most important economic force in the Free World.
The game was mutual funds. Thousands of salesmen, calling themselves "financial counselors," combed the earth for people's savings, and put them into the funds which IOS managed, creaming off enough in the process to make the most successful of them wealthy men.
Mutual funds in themselves are an old and well-tried form of investment. A special variant was that IOS was the biggest and best-known of the "offshore" funds. That meant that these funds, and the companies that managed them, were carefully registered and domiciled wherever in the world they would most avoid taxation and regulation. There was nothing new about that either.
What was phenomenal about IOS was its success. On the foundation of its offshore mutual funds it built up a complex of banks, insurance companies, real-estate promotions, and every other kind of financial institution you can think of. "Total Financial Service" was the slogan. By the end of the 1960s, Cornfeld's men had a shade under two and a half billion dollars of other people's money to manage, and Cornfeld was publicly announcing plans to push that to $15 billion by the mid-1970s.
By the end of the 1960s, IOS had also made a fortune valued at over $100 million for Bernard Cornfeld personally. It had made around a hundred of his associates millionaires as well. Cornfeld was the most talked about financier in Europe since the Great Depression, and IOS was insistently--and on the whole successfully--asserting the right to sit at the golden table of the world's most respectable financial institutions.
The only trouble was that IOS was not a respectable financial institution. It was an international swindle.
That is not a word which should be lightly used about any organization, let alone one which acquired control over more than two and a half billion dollars of other people's money. We must, therefore, explain precisely what we mean by it.
IOS was the creation of Bernard Cornfeld and Edward M. Cowett. Together these two men built up an organization so steeped in financial and intellectual dishonesty and directed so recklessly that it was absurd that it should have been entrusted with so much of other people's money, let alone praised for the brilliance with which it was managed.
The organization which they built up has not, of course, disappeared without a trace, although the two men no longer have any say in it. At the time this is being written, men sit on the board of IOS Ltd. in Geneva who are responsible for safeguarding well over a billion dollars--which is what remains of the money that hundreds of thousands of investors were induced to part with. And of course IOS did a great deal of business which was perfectly honest in itself, and continues to do so. We have talked to many of the people who work for IOS, and there were a lot of decent, even idealistic, people among them. Few were aware of the essential dishonesty of the thing they worked for.