Financial Intelligence
1 Comment The Greatest Risk that You Might Take in Your Life!
Recently, I saw and heard many news about people got deceived by lots of investment schemes out there. At first, I was really happy that those people have finally got penalized by the authorities’ action. However, after that I saw quite a number of people are having all kinds of troubles, for instance, losing income, investment capital wiped out, run out of cash for daily transactions, and the list goes on.



For the past months and years, they high depend on these schemes for cash flow. Now, they lose a source of income. It’s understandable how mad and sad they are.
The worst thing is, there are people who try to suicide!

But… Who shall me blame for all the frustration, disagreement and argument?
I believe the authorities raid the companies because of valid reasons. For sure they’ve suspected the companies aren’t following certain laws in their business operations and that’s why the authorities took such action. If I were suspected by police for involving in some crime, the police could come my house without any notice. This is totally understandable.
The laws are always there. The only concern is, whether the companies are obeying the laws or not. Some investors and consultants aren’t happy that the authorities raided the companies without prior notice, and they have full confidence that the companies aren’t doing anything illegal.
However, what investors and consultants are being told and “educated” might not be the truth. If I were the company’s CEO, I make sense for me to hide all the ugly truth in front of my consultants, sales agents and customers because they are the people who will pour cash into my pocket. This is totally logic. Unethical people might have done event worse thing, which is to fool and cheat those people so that they’re loyal to the company. This is again very logic in marketing world if we exclude the issue of ethics and integrity.
We never know the truth unless everything is presented in black and white. Hence, instead of simply showing confidence in something that I am not sure with, I believe we should be safe rather than sorry. In this world, a lot of people get fooled because they do not have sufficient understandings about something and yet they think they’ve understood everything. Hence they end up jumping into the trap.
Some people say, investing is risky, or running businesses is risky. Hence, they join some so called guaranteed return investment schemes and they think they have understand the world and they’ve found the shiniest diamond in the world. Because of marketing magic, they close their mind and stop acquiring more knowledge, as they pretend they’ve understood enough. When things happen, they got into trouble for reasons that they don’t know, hence they blame everything else around them!
The laws are always there, authorities are always there, things around us are always there. They blame things around them which they can never change, instead of changing themselves! Blaming things that we cannot change is pure stupidity!
In our life, the greatest risk that we might take is being IGNORANCE!!!
Every time when it comes to those investment schemes I always try to figure out some facts before I consider joining:
- How does the company generate the returns?
Banks give us 4% interest per year for FD because banks earn interest from loans at more than 4% per year. This is completely logic. If a company were to GUARANTEE you 3% per month, how does the company generate that for you? What about the commission for salespersons and cost overhead of the company? Marketing cost? - What are the history of the company?
When the company is founded? What they’ve been doing for the past years? Have they been into any legal cases? If yes, why they got into the problems? How the problems are solved? And etc… - What assurance are you getting? Are the assurance guaranteed by legal parties or just merely some promise of the company?
Often there are companies they tell you you’re guaranteed or protected by this and that. Do check those assurances. Are they legally bounded or just merely the promise of the company? If the company goes into trouble, is your capital guaranteed? - Check out the products.
A word of caution: Some companies are trying to sell you some schemes and you will get some physical products. However, bear in mind that even if the products are legal, the scheme can be a scam. Some companies are trying to lure you in by mislead you with the products.
I’ve a lot of friends recently joined some MLM companies They kept on asking me to join the “business”. When it comes to MLM companies I am pretty selective too, as there are many pyramid schemes and scams now:
- How does upline generate monetary reward?
Upline can generate monetary reward via two methods: When there are new people join as downlines, or when there are sales generated by the upline himself and the his downlines.
-If monetary reward is given when there is repeated sales (means you or your downlines are selling products), this is a normal MLM whereby company has sufficient margin to be distributed as reward. This makes a lot of sense to join with no doubt, because this business model is clean. These MLMs usually cost a little to join.
-If monetary reward is given when someone become new downlines, this means that the company reward you when there are new comers. There are known as pyramid schemes. Obviously, the money generated is from your downline. This kind of business is also known as headhunting. It’s illegal in some countries. To identify this, usually it takes a lot of money (few thousands) to join, because portion of the money has to be passed up to the upline. Well, these companies usually will give you some products when you first join, but this is just to give you in illusion on their business model. - What are the history of the company?
Same as the previous explanation. - How about the products?
What products are the company offering? When I want to do some research about the products, there is no point asking people who are in the MLM business. For sure they’ll only comment the positive things. Try to question people who aren’t joining, or people who have used the products but never buy again. Ask them why.
People who are showing the plan to you will definitely tell you need not worry about those rumours, and they will come out with the logic taught by their uplines. For several times, my friends presented me a company whereby its company’s name has changed for few times. I questioned them why they’ve to change the company’s name if the company is doing so well.
Once I got the answer: “After operating the business for many years, the company wants to reach another level and sets a new vision and mission.“
This is the worst answer I’ve received, ever. It makes no business sense. The reason why those MLM-ers will find this reason valid is because their common sense is uncommon, and their common sense doesn’t make sense!
Bill Gates has the vision of getting everyone in the world has one computer each, running with his operating system, Microsoft. I believe he has achieved this and Microsoft is carrying out more R&D to bring them to another level. My question is: Why I don’t see Microsoft becomes Macrosoft or Microhard?
A successful business will never changes name. Coke is still called Coke. McDonald is still called McDonald even though it has been taken by Ray Kroc, and he didn’t rename it. It’s all about branding their businesses. If you change the name, the company would suffer a huge loss in terms of reprinting marketing tools, rebuild the brand name, licence and so on. It makes no business sense!
However, why would people believe in those reasons? It’s because of IGNORANCE.
When the gold guaranteed companies are raided, few persons and I were predicting that the next scam would be Forex. Guess what.

This was last week. 2 weeks after those gold companies are raided.
Scams are increasing. To prevent ourselves from being trapped, it’s very important that we have to increase our financial knowledge, because knowledge is power!
Stay tuned!
A lot of people are commenting this issue in Facebook. Some are showing their disappointment and some are giving out negative comments. However, I find this issue interesting. I am eager to know why a well-known financial guru will make such decision. It must be something that we don’t know or cannot foresee.



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