Errr, back to my question, so does anybody in this discussion actually know or can anybody pls share how the Concept of hibah, works in relation to the Genneva monthly dispensation scheme?

sounds about right



Ponzi scheme


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1910 police mugshot of Charles Ponzi
A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation. The Ponzi scheme usually entices new investors by offering higher returns than other investments, in the form of short-term returns that are either abnormally high or unusually consistent. Perpetuation of the high returns requires an ever-increasing flow of money from new investors to keep the scheme going.

The system is destined to collapse because the earnings, if any, are less than the payments to investors. Usually, the scheme is interrupted by legal authorities before it collapses because a Ponzi scheme is suspected or because the promoter is selling unregistered securities. As more investors become involved, the likelihood of the scheme coming to the attention of authorities increases.

The scheme is named after Charles Ponzi,[1] who became notorious for using the technique in 1920.[2] Ponzi did not invent the scheme (for example, Charles Dickens's 1857 novel Little Dorrit described such a scheme),[3] but his operation took in so much money that it was the first to become known throughout the United States. Ponzi's original scheme was based on the arbitrage of international reply coupons for postage stamps; however, he soon diverted investors' money to make payments to earlier investors and himself.





Contents
[hide] 1 Characteristics
2 Unraveling of a Ponzi scheme
3 Similar schemes
4 See also
5 References
6 Further reading
7 External links


[edit] Characteristics

Typically extraordinary returns are promised on the investment, and vague verbal constructions such as "hedge futures trading," "high-yield investment programs", "offshore investment" might be used. The promoter sells shares to investors by taking advantage of a lack of investor knowledge or competence, or using claims of a proprietary investment strategy which must be kept secret to ensure a competitive edge.

Initially the promoter will pay out high returns to attract more investors, and to lure current investors into putting in additional money. Other investors begin to participate, leading to a cascade effect. The "return" to the initial investors is paid out of the investments of new entrants, and not out of profits.

Often the high returns lead investors to leave their money in the scheme, leading the promoter not to have to pay out very much to investors; they simply have to send statements to investors showing them how much they earned. This maintains the deception that the scheme is a fund with high returns.

Promoters also try to minimize withdrawals by offering new plans to investors, often where money is frozen for a longer period of time, in exchange for higher returns. The promoter sees new cash flows as investors are told they could not transfer money from the first plan to the second. If a few investors do wish to withdraw their money in accordance with the terms allowed, the requests are usually promptly processed, which gives the illusion to all other investors that the fund is solvent.

[edit] Unraveling of a Ponzi scheme

When a Ponzi scheme is not stopped by the authorities, it sooner or later falls apart for one of the following reasons:
1.The promoter vanishes, taking all the remaining investment money (minus payouts to investors already made).
2.Since the scheme requires a continual stream of investments to fund higher returns, once investment slows down, the scheme collapses as the promoter starts having problems paying the promised returns (the higher the returns, the greater the risk of the Ponzi scheme collapsing). Such liquidity crises often trigger panics, as more people start asking for their money, similar to a bank run.
3.External market forces, such as a sharp decline in the economy (for example, the Madoff investment scandal during the market downturn of 2008), cause many investors to withdraw part or all of their funds.

[edit] Similar schemes
A pyramid scheme is a form of fraud similar in some ways to a Ponzi scheme, relying as it does on a mistaken belief in a nonexistent financial reality, including the hope of an extremely high rate of return. However, several characteristics distinguish these schemes from Ponzi schemes: In a Ponzi scheme, the schemer acts as a "hub" for the victims, interacting with all of them directly. In a pyramid scheme, those who recruit additional participants benefit directly. (In fact, failure to recruit typically means no investment return.)
A Ponzi scheme claims to rely on some esoteric investment approach and often attracts well-to-do investors; whereas pyramid schemes explicitly claim that new money will be the source of payout for the initial investments.
A pyramid scheme typically collapses much faster because it requires exponential increases in participants to sustain it. By contrast, Ponzi schemes can survive simply by persuading most existing participants to reinvest their money, with a relatively small number of new participants.

An economic bubble: A bubble is similar to a Ponzi scheme in that one participant gets paid by contributions from a subsequent participant (until inevitable collapse). A bubble involves ever-rising prices in an open market (for example stock, housing, or tulip bulbs) where prices rise because buyers bid more because prices are rising. Bubbles are often said to be based on the "greater fool" theory. As with the Ponzi scheme, the price exceeds the intrinsic value of the item, but unlike the Ponzi scheme, there is no person misrepresenting the intrinsic value.

Their goal is to possess as much gold as possible. Thier MLM setup of their company has made the company expand very big and global. They get customers money to roll in more gold. And the more SnPs they have the more likely they can get bank loans to expand even further. Not too sure if they take bank loans though, but they are expanding fast.

Basically the gold was increasing 50% every year. Giving 24% p.a. (2%/month) as hibah doesn't cover the rise of gold's price. Lets say you bought the minimum 50g for 10,000 RM. End of the year you will have 12,400 RM. But you need 15,000RM (50%+) to keep the min 50g. You have to top up 2,600 RM more to renew the contract.

Its really like you bought a gold bar for them with your 10,000. The price increase to 15,000 at the end of the year. The 5000 profit is split where you get 2400 and they get 2600. They promised you 2400 (24%) the rest is for them.

Of course gold is no longer increasing like that anymore so its interesting to see what happens.

I also invest in Genneva since a year ago . I only invest with money that I can afford to lose . I heard that some Genneva investors take personal loans to invest . I think this is dangerous if something bad happen . Maybe they do this because they were too greedy .

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Sadly because some pushy agents told them the strategy of taking loans. Because the hibah return was so much stronger than the loan interest.

I was told by an agent that I could even use Credit Card Loan to get more gold for more returns. That is seriosuly insane! If Genneva collapses so does my life is I do this strategy! Of course I didn't buy from that insane agent.

Only invest what you can lose. The Genneva engine works, and do give the returns they promise, but it can still be a scam.

The next 5 years they are still here making all their customers happy. Only the next 10 years Genneva cashes out and declares bankruptcy, because their board wants to retire and perform the perfect escape plan to another country.

I also have the same opinion . First few years I think Genneva will be OK ... but in the long run this Genneva scheme might collapse .

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It is really about who had the last musical chair. Those who did not grab one before the music stops is to suffer.

short and simple guys, this is only for people with GREED!

My family been investing with Genneva Malaysia for 2 years ++ and we get like 50% of our capital back. In the case Genneva Malaysia collapse, i still able to sell the gold for 75% of the buying price, so i still be able to earn instead of losing nor earn less if i put in unit trust or FD.

Just sharing my opinion.

After 2 years you still made a net loss..... are you sure the gold bar in your hand is worth 75% ?
Have you even tried to sell the Genneva gold bar ?

Ronnie, yeah tried to ask for selling price and pawning price before.

e.g. invest 100k and earn 50k in 2 years, (average 25k a year)

Then you should invest more.

Anyone heard of another one sigh*....called Caesar Gold?
Similar scheme as Genneva...

doraemon, its not about more or less, its about at my comfortable level. however to be truth, nobody in this world can predict whats going to happen tomorrow.

just sharing my opinion on this company from my past purchased

That is not earning. That is recouping your capital. i.e. you recoup back 50% of your initial investment in 2+ years time.
So by your logic of selling the gold at 75%, meaning to say you earn 25% in 2+ years time.
Then if you do not sell it off, by the logic of getting back 50% every 2 years plus; to recoup back your whole capital takes 4+ years.

If you ask me, looking at that simple maths figure - am not really impressed.

This post has been edited by b00n: May 10 2012, 07:37 PM

no genneva 4 me. spot price are low now, it's a good time to see how they stick to their buy back commitment.

It seems this genneva business is rapidly growing like mushroom in kuchai lama area. Today I saw some more expansion. I wonder how many people will continue investing in it.

Don't think they can run to another country when millions are involved. can be extradited from anywhere they escaped to.

This post has been edited by AUGUST777: May 20 2012, 12:37 AM

If people start to become greedy and invest with genneva with debt, means they take out loans and so on, I don't think this scheme will survive. It'll collapse in long run.

YES THEY ARE NOW IN CHINA, PHILIPPINE AND SINGAPORE, DOING COMBINED SALES OF MORE THAN 7 BILLIONS RM. THINK THE GOVT IN ALL THESE COUNTRIES MUST BE BLIND, LETTING THIS "SCAM" COMPANY TO OPERATE. HA, ALL THESE TEH TARIK TALK, TALKING NONSENSE WITHOUT FACTS. YOU CAN'T CON CHINA, MAN. OR FOR THAT MATTER, SINGAPORE GOVT.!!!!!