Before you go into gold investment, you have to ensure that:

1) the gold must be genuine (get it assayed),

2) the gold is in your possession at all times(never release it for safe-keeping by the company!),

3) the company does not cease trading before a certain number of months (% "overpaid" divided by % rebate/hibah per month), and

4) the company buys back the gold at the price it sells you.
I am not supporting Genneva or other gold trading companies but here is how it works for the doubting Thomases:

1. You buy gold at retail price (say 20% above spot/bank/wholesale price)

2. You get 2% rebate/hibah per month

3. So for those who say that the buyer is just getting back the excess money he overpaid in the first place, well, it is true and false.

4. True because you really are getting back the part of the 20% higher price you paid

5. False because after 10 months (20% divided by 2%) you would have got back all 20% excess that you have paid. If the company is still in business after 10 months and you continue to do the same, then every month you are making nett returns of 2%

6. You will only rugi if the company go bust before that 10 months because you would not have got back the 20% excess that you have paid because with the gold in hand, you can only sell it at spot/bank/wholesale price to the bank/goldsmith.

7. If the company continues trading the same beyond that 10 months, the rebate/hibah would be real and at 2%x12months = 24% per year (which is much, much higher than FD/ASN/ASB (non-Melayu no chance because of UMNO's racist policies) or what-have-you!)

8. To make it clearer, here are examples:

A. You buy 100g at RM200/g , ie. RM20k
Spot price is RM160/g , ie you "overpaid" by RM4k for the 100g
Every month you receive 2% rebate/hibah, ie RM400
If the company go bust after say 6 months, than total rebate received after 6 months = RM2,400
You sell the 100g gold at spot price RM16k
So total money you received after 6 months (and selling the gold) = RM16k + RM2,400 = RM 18,400
Which means that you rugi RM1,600 (ie. RM20k - RM18,400)

B. If the company go bust at 10 months, you break even after collecting the 10 months of rebat/hibah and selling the gold at spot price.

C. If the company continues business beyond 10 months, your returns for 100g gold investment at say 18 months would be:
18 x 2% per month of RM20k = RM7,200 (plus the 100g gold in hand)

D. If you put RM20k in FD at 3% per annum for 18 months, you would get RM900.

E. So your nett returns in your gold investment at the 18th month is RM7,200, ie. RM6,300 more than FD!
It is clear that  it is not entirely true that you are just getting back the excess money that you have paid.

If the price of gold goes up, your monthly rebate/hibah would proportionately increase even though the percentage is still the same, eg. 2% per month. It is like forced saving.

How can these company pay you such high returns?
It is from the 20% profit they automatically make when they sell you the gold at retail price because they buy it at spot price. The profit from the big difference, they buy some more gold at spot price and make more profit when they sell that 2nd round of gold to others at retail price, again making another 20% profit. It goes on..

As long as the gold company is doing gold trading and not taking deposits, BNM has no jurisdiction. The other reason where BNM can move in is money laundering. So the source of the money to buy the gold must be clear.

Who cares if the Fatwa Committee says it is non-Syariah compliant. As long as it is legal, the Islamic authorities can't touch even the Muslim investors because there is no punitive Syariah law governing such investments. It is just guilt on the part of the Muslims. But with such high returns, who cares! They are not stealing or robbing anybody unlike many of our Muslim leaders! As for non-Muslims, the Muslim authorities have no bloody right to interfere.

Don't you think it is a workable business model and not Ponzi? But to safeguard and reduce your risk in gold investment, refer back to my initial 4 precautions.