Tan Kin Lian's Blog: Multi Level Marketing

Thursday, November 15, 2007

Multi Level Marketing

Dear Mr. Tan,

What is your comments on the financial model of Sunshine Empire?

I was approached by one agent early this year asking me to join. I find it difficult to believe the returns after listening about the business model. I did not invest.

My good friend, who was very smart in school, invested recently. When news broke of MAS warning, I had a discussion with him on the flaw of the financial scheme, but he insisted that it was no different from other investments.

The thing that troubled me a lot is that sometimes smart people can have very naive view of financial, maybe out of the greed of a good return. Or maybe is it really that there is nothing different between Sunshine Empire and other financial schemes?

REPLY:

I am not familiar with the business model of Sunshine Empire. Can you send some brief details to me?

Generally, I avoid all investment schemes of this kind. I do not spend time to listen to the sales talk.

7 comments:

Anonymous said...: That is the problem with most people, they put too much TRUST in the 'adviser' or 'seller'.Trust is very destructive .
Another is greed. They don't realise if something is too good to be true, it is usually is.
Of course fear is also destructive in that often opportunities are missed.
Knowledge helps and having a really good and honest adviser helps too but no guarantee that you will not be victim of scams.
This applies to insurance too, many end up with a lot of rubbish plans
that bogg them down financially.
It is no difference from being scammed.; November 15, 2007 11:43 AM
Anonymous said...: Even with bad publicity people are falling victim to scams. Wondering why? Scams can also be found in the these trades like MLM, property, insurance, time share and internet biz.
People are generally greedy, gullible and ignorant. There is why these trades are still thriving.; November 15, 2007 8:31 PM
Anonymous said...: Is your good friend (very smart in school) also a scholar? If so, I hope he is not typical of scholars, otherwise I am worried because the Government always believe in scholars by giving them high post very fast and making big decisions affecting the public.; November 15, 2007 8:54 PM
hongjun said...: I have got a friend whose relatives actually attend a talk conducted by Sunshine. If I am not wrong, they use a concept similar to stocks. They also have accounts like "CDP". In stock market, you buy shares and in a MLM like Sunshine, you actually buy "virtual" shares that do not actually exist. Suppose a MLM company go bust, the so-called "shareholders" will not be compensated. The company need not even need to be put to liability since you are buying their product. In a stock market, supposed a company go bust, ordinary shareholders may get their chance to get compensated supposed all preferential shares are paid for.

I hope I am correct. Please correct me if I am wrong.; November 15, 2007 11:37 PM
hongjun said...: Just watched Channelnewsasia on Sunshine Empire. There is one lady being interviewed and she said she don't know how much she "invested" because money matters are not handled by her. I cannot believe it!; November 16, 2007 11:19 PM
Anonymous said...: It is not surprising. People generally don't know what they got into, be it investment , insurance, MLM or time share. They got in at the moment's folly and regret but not wanting to look like fool. The best defence is "I don't know"; November 17, 2007 10:58 AM
Anonymous said...: When people are overcome by greed, they do not think straight. I once had a good friend, a teacher, whom I helped secure a three month training stint, part time, to earn $16,000. At the end of it, he told me he wanted to invest 15,000 to a guy he met recently. I told him not to but he insisted as he says that he gets 500 dollars in interest every month. I followed him to his meeting place, trying my best to dissuade him without success. Finally after the loan, just as I have told him, two months later the guy told him he is prepared to go to jail as he has no money to repay.
I am now convinced there are many gullible people who are greedy for short term interests. We have to be even more careful now as foreign "talents" in even more sophisticated scams are setting up shop in Singapore as Singapore is becoming more prominent in attracting foreigners.
It is sad but we can expect more naive Singaporeans to fall prey to such scams as they are like guppies in a pond that now finds Barracudas and Sharks coming in for a feast.; November 17, 2007 2:26 PM