I am posting one of the mail i wrote to my friends long back about Goldquest. Read my first post regarding this and also a guy's reply for my first post. It will be in the comment of first post.

A legal way of robbing II.

I happened to see a few reply mails for the document legal way of robbing. Here I am pointing out few of the concerns in the mail.

The persons who are into it are reluctant to call it as a MLM, is MLM a sin to do? I feel this is also an MLM only. The difference is with the amount of money and nothing different pertaining to the business which is marketing. If whole thing is a scam anyway, does it matter if it is MLM or not? Why do they excitedly oppose when we call them MLM? Some thought must go into this.

The concern about this business is not whether it is legal or not, the concern is whether it is ethical. I heard that the company is sued. I don’t know why it is sued but some reason should be there for the company to be sued.

My friend pointed out a valid speculation regarding getting permission from the trusts. If they are approaching Tamil nadu government saying we want to spread Tamil by imprinting thiruvalluvar in gold coin, they will not deny it and it is easy to get permission saying so. And of course a committee will be formed to check whether the thiruvalluvar mould is correct. Why it can’t be true in other cases too. I find this as a valid speculation. So the point is, depicting some great person’s coin, endorsed by big authorities does not give credibility. The reason told to them could be very much different from what is told to us to convince us.

Regarding the demand, I heard the same words from them (To make that coin as a rare piece they will destroy the mould) when they tried to brain wash me. I think in most of the cases the no of coins is fixed by them only, because the no is small compared to the effort spent on making the mould.

Regarding the foreign policy ( The foreign trade policy of India registered in 1997 comments that only 8% of the profit made by any company who is head quartered outside India is taken out.), I don’t think any policy is there like that. if they are not able to take their profit first why they have to invest here? If this is not the case there should be many loop holes by which they can take their money out.

Regarding the ways you can make money in this business. Two ways are there. First, by selling their products at a higher margin than what u actually bought it from the company. Secondly, by referring other people to market their products and in turn getting a commission for it. You are getting an eight gram gold coin for 33,000 right. If you are capable of finding a person in India who can get that gold coin for more than 33,000 def you can make money out of it. You can get an eight gram gold for Rs 7000 .

They are claiming they made an investment in Chennai, what investment are they talking about?, what they call as investment is the amount of money they are collecting here and giving a part of that as commission.

The persons inside this are comparing this business with stocks and mutual funds. I don’t find any relation between these two. Most of them into this business don’t know about share market I think. In share market you are giving money for the company to do their business. Let us take some research student have an idea, but he don’t have money what to start an idea. He will try to approach a venture capitalist who can fund the project. If the venture capitalist found this as good idea he will pump in his money for the project. Still if they need more money they will go for the share market. If the business is well established and if they want more money to expand their business they will go for an IPO. Let us take an example of airlines having some 10 flights. It needs money to get 10 more new flights to expand its business. There are many ways to generate the required money. One of the ways is share market where they will sell their stake in the company to one who wants a share in the company. Investing in share market is doing some sort of service to the society because you are giving money for a person to do business and sharing the profit. ‘Stock markets are temples of capitalism. Without it you or I may not have been in our jobs and be earning today’ Please don’t compare this with stocks. It is really foolish.

And one more thing I noticed is they are not doing marketing for the products**, they are marketing only the business saying that you can make money by referring. (**Product is of no value in a country like India, if you try to sell a gold coin for 35,000 means all will try to laugh in different ways. This is the comment I heard from one of my friend.)

I am seeing this typical example given by them. by referring your friend to go to pantaloons you are not getting money. Ok let me clear this point. Why is my friend asking where he can buy a dress? Simply because he is in need to get a dress. What is the need for their product, is it really worth to get a coin for 33,000? Just think about it. It is very clear from their presentation that there is nothing to do with the product in India. Clearly the emphasis is on referring other people and making money.

Let me put my concern about the referral thing, to take your money back there should nine on your left side and nine on your right side totally eighteen. According to them every year people are joining so it will not be an issue. According to their statistics every year five lakh new people are introduced to this business. Out of that forty thousand will be interested to join. Ok let us go by their argument. Let us take this year 40,000 are already into the business, out of which 20,000 will be in last level right. So for getting their money back they should join 20,000 * 18 (3,60,000) people to get their money back. Is it possible. Ok let it be possible. Out of the 3,60,000 there will be 1,80,000 in the last level. For them to take their money back they need 1,80,000 *18 (32.4 lakhs) is it possible to get?? Let us put a small tabulation for this.

Last level	Number of persons needed	New last level
20,000	3,60,000	1,80,000
1,80,000	32.4 lakh	16.2 lakh
16.2 lakh	2.92 crore	1.46 crore
1.46 crore	26.28 crore	13.14 crore
13.14 crore	236 crore	Not relevant

I hope everyone will be clear with the above calculation. The population of India is 100 crore only, where will that 13 crore people will get that money???? It is certain that they will lose that money. The above holds only if people put their efforts to catch other people once in an year, where there are fresh 40,000 people available. If one catches people more frequently, it is equivalent of draining next year’s resources. The doom comes faster and the people in the last level of the trees (who have nobody to catch) come soon. What guarantee is there that you are not one of them? By their claim, there are lot of people in the business already. If so, you have very less opportunity to be at the top.

People just come out and think. You may not know that you are doing robbing. Just sit back and think about it. Think about the money flow. Just think whose money you are getting. It is our own people’s money. Why we have to rob and give it them. We are making others to mock at us.

Here I have explained only about the money flow. I am not pointing out other concerns. Think how others will look at you if they feel you are robbing others money. They will look at you as a very cheap person. I have seen those incidents. Your friends will run away from you with the fear that you will call him to the presentation. Your mind will be occupied thinking whom to refer. 24 hours you will be thinking about this and you have to beg your friends to come for the presentation. Do you want to be in this situation?? Just think before you act. Don’t get carried away by their words. Even if you want to get into this don’t act immediately. Don’t ever swipe your credit cards. Just come back to your home discuss with your friends and act. Just think about the concerns. Act wisely.

A legal way of robbing.

Last week I attended a presentation about a business. Most of you have come across it, Referral marketing they call it. Let me give a small overview about that business.

Generally in referral marketing, your investment will be a certain amount that u pay to the company to become an agent. You generate money in that business in two ways. First, by selling their products at a higher margin than what u actually bought it from the company. Second, by referring other persons to market their products, and in turn getting a commission for it. Even when the referred person refers someone else, you will get a share out of it(but the amount will vary, like when you are referring some person you are getting Rs X, if that person refers some person you will get X/2). We call this kind of marketing as MULTILEVEL MARKETING(MLM).The thing i came across is a little bit different and seems to make it more popular than MLM.

Before saying about the differences I will say a little bit about that multinational company. It belongs to a network of a few companies, where each one deals with either technical products or automobiles or tour packages etc. The company of our concern is dealing with numismatic coins. They manufacture gold coins imprinted with great people or events and sell it. To make that coin as a rare piece they destroy the mould. so that they cannot make the coin like that afterwards, good way to make things rare and increase the demand na, the products which we can buy is this only, others are too expensive.

Now we will see the differences. In MLM you have to buy their products every year, where as here if you buy once it is enough. The other strategy is they are following a binary tree like structure where you can refer only two people, and you will get money only if those two people refer another two. So if you have three sales on your left side and three on your right you will get money. The person above you will help you because only if you refer a person he will get money.

Clear about the business? ok now we will deal in numbers. The product range starts from Rs 33,000(includes agency fee and product price), and it is a gold coin i suppose, and on every six referrals ( you have to get three on your left and three on your right, you will not get any money for a 4 2 or 5 1 combination) you will get 11,500.

Let us make ourselves clear with the money flow. From where are we getting that eleven thousand or 2000(approx) per referral? Is the company going to pay you from their hand? Absolutely not. Its the money of the person you refer, am i right? Let us assume the best probabilistic event, a perfect binary tree. The hierarchy goes like this 1, 2,4,8,16,32,... How long will it continue, may be up to one crore people. Let us consider it is saturating at that level. How many will be in the last level of that binary tree?? Half right?? i will justify my statement with this example. Consider this tree 1,2,4,8,16. Total no of people is 31. And the no of people in the last level is 16 which is half the total number of people(31). So at any point, seventy five percent of people will be leaves, i mean they will be in last levels.

For one crore people, the number will be 50 Lakh in the last level and 25 lakh in the penultimate level. From where will these 75 lakh people get the money? So the people above them are getting money eventually by robbing others money who are at the last two levels.

Let us take for each person that company is gaining some 1000 rs and also huge share from last two levels will go to the company. You are robbing your own peoples money and giving it to some person outside the nation right? If it is going up to one crore people, minimum of a 10,000 crores will be going outside the country( 1cr*33,000*0.75 ~ 20,000cr. Out of this half,we could consider, would be shared by the 25lakh people above the last two levels.) With that money we can construct a new IIT which will turn the life of few thousands of people every year and it will generate a large knowledge base to the country.

I really feel very bad about this, because most of the persons who are involved in this business are from top engineering colleges. In the presentation that I attended, a guy was very proud that he earned lot of money and got a car. I don’t know whether he is aware that he is robbing others money or not. Is this the way to use our potential, think?. don’t rob your own peoples money. Keep a share with you and give a share to that company which taught you the strategies how to rob. Think, use your potential in right way.