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.

You can buy gold at cheaper spot price rate, like from banks and bank gold investment but do you get returns every month? Bank gold investment is passive investment, ie wait for gold price to go up. How long to wait? What if the price of gold drops? It is obviously not attractive and the banks know it! That is why banks are giving higher interest rates for FD that are tied to the gold "investment".

By buying gold from a bona fide gold trading company, you are actively getting monthly returns regardless of stagnation or reduction in gold price as explained in my posting above.

Hope this explanation will reduce your frustration and suspense in waiting for an answer.

My 10 months is just an example la. What I meant is you are on the scheme every month for that period in the examples, regardless you have to sell and buy every 3 or 6 months.

You can say that you are getting back part of the excess money you paid for the gold at retail price but who would share/give part of the profit to you? My example C at 18 months shows the amount of money in hand (from the monthly rebate)[ compared to FD interest for the same period. Does it really matter the money comes from the profit made by the gold company which you had paid? The principal amount is in the form of the gold bar, which you would get back at the same amount when you sell back to the gold company. In FD that same amount of principal you cash out by submitting your CD certificate. If you still can't see the REAL gain in my examples, I can't help you because I think my examples are pretty clear.

So what you are buying at 120% because at the end of the contract, you sell back the gold at 120% and get back exactly the same amount you paid. The gold company gives you part of the profit, ie 6% and take 14% for itself. Who would give you part of their profit? You can't really say that "you are paying yourself" because when you sell back the gold, you are getting back that 20%. And that 6% they give you over three months is more than you can get from your whatever type investments available, short of making some sacrifices to be a political leader and plundering the nation after that! As for the 14% which the company takes, don't all companies need to make profits and cover overheads?

Now you are getting it! Refer to the initial four points/precautions in my previous posting before jumping into gold trade.

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Added on August 13, 2012, 10:43 pmHence the four precautions in my first posting in this thread. As long as the gold is genuine (assayed independently with assayer's certificate) I don't think it would be difficult to sell the gold, even to banks. Price? I don't know.

This post has been edited by kasimura: Aug 13 2012, 10:43 PM

About RM50-60 per bar and it comes with a certificate. If you have it assayed, try to arrange so that you get to keep that gold bar whenever to sell and buy back so that you don't have to waste money assaying a new bar every time. Better still, get the agent to pay for the assay! Just get a bit less commission la.

Read my first posting in this thread.

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Added on August 16, 2012, 7:06 pmGold trading companies by definition should be buying and selling physical gold and nothing else. If they take your money and not give you the physical gold, then it is deposit taking and that's when BNM will burn their asses. As long as they trade in physical gold, BNM has no jurisdiction over them.

However, BNM can still cause trouble by just acting based on "public complaints" (real or cooked-up or from banks that are losing FDs to gold trading). I won't be surprised the latter is true after all this Malaysia, where our enforcement agencies act as lapdogs to those in power or the well-connected! Once BNM raids, everything is frozen. Even if the complaints turned out to be false, the business would have been destroyed. It's becoming like Zimbabwe. This is the risk you have to take!

This post has been edited by kasimura: Aug 16 2012, 07:06 PM

[Didn't I give another example at 18 months with the real gain (money in hand) cf FD? The hibah or whatever you might call still comes from the same source as in my first example (6 months) or no matter how long you are in it, ie if you buy and sell back repeatedly to[ the gold company. Just use your brain a bit lah to extrapolate! If you still can't understand with my examples and numbers, as I said before, I can't help you. By the way, I am not an agent to any gold company, nor gain anything if any of you plunge into it. Just sharing knowledge and experience so that you guys can make informed decisions. Remember, there's no free lunch! So it involves risks just like any other investments, legitimate or otherwise.

[/B

How can I be a scammer when I don't gain anything? As I mentioned before, I'm just sharing info and experience. If from my info you think it's a scam, then please don't risk your hard-earned money. You don't have to take the risk. At least my info is useful in helping you to make a decision. That's the purpose of this forum. But to accuse somebody of being a con when you can't grasp the whole thing, it is unwarranted and an abuse of this forum. Enjoy a pleasant and safe holiday, howzat.

If b00n could understand and grasp the whole thing from the various examples I gave, I can only sympathies with howzat and those who are still asking questions which are already answered in my examples. What about others? Can you guys grasp where the "hibah" comes from with repeated buying and selling beyond 10 months? There is nothing more to answer. My examples are simple enough!

Howzat, if you still don't get it, just avoid gold trading! Easy as that! Nobody is forcing you and I definitely am not trying to con you or any others. If I am trying to lure mentally challenged people with lots of money, why did I even bother to list out precautions to take and check out?

Check also point 7 and examples C, D and E. If you still don't get it, I don't give a damn! I'm not going to waste my holidays entertaining an idiot!

Another thing, this is different from Ponzi because you have the gold with you (definitely worth something, don't you think so , kaka23?) instead of a worthless piece of paper when the company go bust. At least you still have the principal.*

*ie. after you have collected monthly "hibah" amounting to the mark-up (10 months in my example)
NB: The above footnote is only for those who are incapable of deduction.

Met a Genneva agent a few weeks ago and asked him why no more guaranteed buy-back? His answer was "to comply with BNM regulations"! Now that is a dodgy reason which does not make sense! As long as a company is doing trading (buying and selling) BNM has no jurisdiction. So how can BNM ask a trading company to stop buying?!

As I said before, one of the conditions to fulfil is there must be guaranteed buy-back at the original selling price for this scheme to work. Without this clearly stated in the documents, the risk of losing money is too big. With no guaranteed buy-back from Genneva and a dubious "reason", I wouldn't advise anybody to trade with Genneva. Those who are in, better get out while they are still willing to buy back at original selling price!

Genneva in other countries might be doing well but they have nothing to do with Genneva Malaysia and vice versa. It is not an indicator to the health of the Malaysian company.

It's unfortunate that BNM is targeting gold traders. The implication of these raids is that BNM /govt can just practically kill your business by just suspecting you of money-laundering. Even if the suspicion turns out to be unfounded on investigation. No trading business is safe! The thing about Anti-Money Laundering Act is that the assets of the company would be seized if found guilty. What a treasure trove for BN war chest in the coming general election! Could this be the business version of the "Sodok Me" case? This is even better because there's real gold bars and not that kind of "gold bars", you know what I mean!

If these gold trading companies are running a scam, the police (Commercial Crime Unit) would be the ones raiding for fraud. The fact that these companies have been running for so many years only implies that they are running legitimate businesses. Also after the destruction of Genneva version 1 caused by BNM raid, Genneva version 2 (Genneva Malaysia) was set up using the same modus operandi and yet no action by police for fraud. So are these gold trading companies running fraudulent businesses? The present (and past) BNM raids are all about money-laundering and deposit-taking offences, nothing about business fraud. I know some of you must be opining that our police are inept and only good at harassing Opposition members and their supporters but that is beside the point.

The affected buyers are the ones crying about their lost of income for their livelihood and children's education CAUSED BY THE BNM RAIDS AND NOT ABOUT THESE COMPANIES SCAMMING THEM. Many people lost their investments, like one angry forumer here whose sister is still waiting for her money after Genneva v. 1 was raided. Would she and others have lost heir investments had BNM not raided and froze everything? Genneva v. 2 would have learnt after all they are the same people(?) But I can't be sure though. I know of some of these companies took great pains to comply with whatever laws, and conditions set by govt agencies like SSM and BNM, liasing with them, yet are still raided. You just wonder if it is political or more than just "protecting consumers"!

The ultimate losers are the ordinary folks. These are the people who try to make extra money legally through gold trading when opportunities are closing at every turn if you are not well-connected. And the well-connected investors probably got early warning before the raid! IF BNM/GOVT IS HONEST ABOUT "PROTECTING CONSUMERS" THEN BNM SHOULD QUICKLY SEPARATE OUT WHAT ASSETS BELONG TO THESE COMPANIES AND WHAT BELONG TO THE BUYERS AND RETURN THE BUYERS' INVESTMENTS AND ONLY FREEZE COMPANY ASSETS. But then that is like "kucing bertanduk" lah! So again the big losers are the ordinary rakyat....as usual! My sympathy to them. If they are holding the gold, my advice to them is not to sell them to quickly because the price of gold is expected to appreciate significantly in the next few years.

You are right. Those investors in that "twilight zone" transitional period are the biggest losers because they have neither gold nor money. These are the people who really depend on BNM speedy work to release the selling-back money to them because it is not company asset but belongs to the customer. But I doubt BNM would even bother to do that. I guess they have to wait out until everything is settled, court case or otherwise, to claim what belongs to them.