I promised to reveal what I think in the previous article

Here are the facts again if you missed the earlier post. The reason I broke this post up into 2 parts is that I want to teach you to think for yourself. Rather than to count on others to get the answer.

The investment – Gold bullion

• The return – 1.5% guaranteed per month for 6 months
• After 6 months – seller buys back at purchase price after 6 months
• Company has be operating for 4 years

Why I think it is a shady investment?

The underlying asset is Gold bullion. Gold bullion does not give you any returns. You only make gains when the gold price goes up i.e. capital gain. So the return of 1.5% has to come from some where since it is apparently guarantee. Will go into this guarantee later. So where is the source of returns? If you can figure this out and it is not convulated, then it has a much higher chance of being a genuine investment or company.

What if you invested in a gold mining company or a company that sold gold? Would you get returns or dividends? Maybe. Why? The dividends come from the profit of their operations. They do not come by sitting on the gold. The reason companies or shares (of public listed companies) gives dividend is generally when the company is sitting on too much cash and they want to return some of the cash back to you.

1.5% per month guaranteed. Assuming the returns are NOT compounded, 1.5% per month equals 18% per annum. Very few types of business have 18% gross profit per year, let alone net profit which they give back to the investors. Businesses that can generate such returns are probably in smaller businesses that are closely held. They are probably working their butts off, say they get 30% gross profit. Why in the world would they give you 18% for doing nothing? They can borrow all the money they want IF they were a genuine business.

On the other hand, for a company that CAN generate 18% per annum net profit and show the banks proof, bankers will be beating a path to their door to LEND them money IF it were a genuine solid business.

After 6 months, the company buys back the gold at purchase price. This sounds like you are LENDING money to the company and they give you gold as a collateral. This ties in with the first 2 points above. Where is the source of return and why would they want to give 18% to you?

In a real business, there is simply no way that happens. And if such business claim to be a new way of doing business, let me say this, there are no new ways of doing business. It still boils down to capital invested, income, expenses and profitability.

Yes, there’s the internet. Yes people sell information products (generally low capital, high profit, not going to share with you), there’s capital intensive business (need large capital, returns are not double digit in many cases) or online start up (high risk, no guarantee, return only when company is sold or turn public).

And don’t fall for crap such as high yield investment program or some who says they skim of the cents off millions of shares or dividend. Computers today make sure every single cent is accounted for.

Original article from Personal Money Tips

We were approached by friends for food and then introduced to gold investment or rather gold trading. I didn’t pay much attention at first but after a listening a bit more, here are the facts below. Instead of me telling you, the reader what to think and belief, why don’t you share with the rest, what you think and why?

Here are the facts, you tell me what is your gut feeling. Is it a scam, a money game or a genuine investment.

• The investment – Gold bullion
• The return – 1.5% guaranteed per month for 6 months
• After 6 months – seller buys back at purchase price after 6 months
• Company has be operating for 4 years

I will reveal more in the next post but tell us what you think. Would you go for such an investment?

Original article from Personal Money Tips

I was passing through a shopping mall today when someone approached me with an investment idea. Normally I don’t stop for such 5 minutes on your feet talk but today, I have some extra time and I let the lady talk.

In less than a minutes, it turns out to be no investment idea at all. Apparently, people will call anything an investment to get you to join them. An anything that even has a hint of possibly potential income is touted as an investment. I highlight the phrase possibly potential inceome. Truth is, what the nice lady tried to sell me was nothing more than multi level marketing. They ask people to “invest” i.e. become a member, buy their products and get others to join. I don’t have anything against MLMs. But to frame the idea that what you are purchasing is actually an investment is hogwash.

I guess, to build a business, you invest your time, effort and money to get it going and calling it an investment is not wrong. Still, you have to recognize a spade to tell if it is a spade, or you might “buy” into something thinking is it an investment.

I did not stick around to hear more because I’ve been involved in MLM before and it takes a lot more hard work than what you think or are told to believe. And time was running out for my next appointment.

Lesson here. All sorts of people can call all sort of things investment. You have to decide what an investment is to you or else get suckered into someone else’s “investment plan”

Original article from Personal Money Tips

If you think regular investment are boring, you might just want to
consider collectibles as a form of investment. I came across this
article about vintage guitars that are sold for thousands of dollars.
Apparently, baby boomers who lusted after these guitars when they  were
young are now snapping up such guitars, creating a market for them.
Check out the

One heirloom Gibson acoustic sold
for $10,000 at a Boston Vintage Guitar Show last year. An orginal
Fender guitar from the 1950′s can fetch upwards to $25,000 or more.
Good quality vintage guitars maintain their values and are sought after
by collectors throughout the world.

Sutton, MA (PRWEB) June 30,
2006 — New England based Guitarshows.com provides the public a face to
face venue for buying, selling and investing in vintage musical
instruments. Vintage guitar and music gear expos across the East coast
and New England provide passionate hobbyists an opportunity to buy,
sell or trade anything of musical value.

Technorati Tags: off beat investments, vintage guitars

Original article from Personal Money Tips