Sponsored Links

To retire by age 45, start with a plan.

"Is early retirement the right financial choice?" Jim Ellis discusses long-term financial growth strategies. I have blogged ab...

Past blog posts now load week by week. The old style created a problem for some as the system would load 50 blog posts each time. Hope the new style is better. Search archives in box below.

"E-book" by AK

Second "e-book".

Pageviews since Dec'09

Recent Comments

ASSI's Guest bloggers

Friend selling exclusive investment with 6% a month return. (Could this be a great investment?)

Sunday, January 11, 2015

"Those at the bottom are left with a loss."

This is another example of my ignorance:

Hi S,

Welcome to my blog. :)

What you have described is something very esoteric. Well, at least to me, it is.

I am afraid I know nothing about something like this. If you would like me to blog about it to see if other readers might be able to throw some light on the matter, let me know. :)

Best wishes,

What was this in response to? This:

Hi AK,

Just a basic introduction of myself, I am a 21 year old teenager, I have been reading your blog since I was 19. I made my first small sum investment when I was 19 too.

Here is my query:

Recently, a friend of mine contacted me to sell an investment policy to me. It was described as an "exclusive" investment. Here is how it goes.

- Minimum sum invested must be at least SGD $2 million dollars
- Period of investment is 25 months
- The investor will get a return of 6% a month (4% being the capital return, 2% being the interest of the sum invested)
- There is a banker's guarantee attached to this investment for the capital return too

So I did my simple math and calculated, if someone invested 2m, by the end of 25 months, it will be 3 mil. I was very skeptical about it at first, but after consulting one of my friend from the bank, he said there are such things. Why is there such an investment instrument in the market? What's more the security is there with a banker's guarantee attached. Can investment like these be trusted just because there is a banker's guarantee attached? We all know 2m is not a small sum, therefore I am humbly enquiring about this with you. Could you give me some opinions on this?

Thank you:)

Best regards,

Sure thing, share it with the readers. I am really curious, is there really such thing as a "almost-zero-risk" investment like this?:) thank you AK.

Much appreciated.

Sounds too good to be true? A healthy dose of skepticism is likely to improve our chances of survival in the field. However, what if it were true?

If you have any idea what this is or if you have something to say about this, please leave a comment for us. Thank you.

A useful reminder as we are offered opportunities:
Advice from a fraudster.


RayNg said...

Hi S,

Sound good to be true. Appreciate if you could tell us which bank offer that.

I am interested to know more.

Rebel said...

Always ask for the paperwork.

pansy t said...

"The investor will get a return of 6% a month (4% being the capital return, 2% being the interest of the sum invested)"

Assuming the 6% return is of the outstanding balance ( capital return is normally not re-invested, i'm aslo assuming the 2% is not re-invested) , total interest earned would be ~$639k. That's almost 32% of the initial investment.

I"ll love to see the small print on this offer!

44b3eb0a-80f7-11e3-9782-000bcdcb2996 said...

Hi AK,

"If it sounds too good to be true, it probably is."

This statement has saved me numerous times.

I hope it helps other readers avoid some landmines. Nowadays, there are many many many!


owq said...

1. Which bank issued the guarantee? Who is the counterparty? Guaranteed doesn't mean risk-free.

2. Is the interest guaranteed?

3. Are you sure the 2% interest is for original amount invested or the principal amount? In which case the return is much less as the principal will be reduced.

4. What are the underlying instruments?

Siew Mun said...

Look at their source of income to justify the returns for you.

AK71 said...

Hi all,

Thanks so much for all the comments. For sure, if it is something we do not understand, the best thing to do is to avoid it. Better not to make money than to lose money.

I think S has a lot of investigating to do now. :)

Ray said...

Banks can go kaput too.

Unknown said...

Yes, AK is right. If in doubt, always give benefit to the doubt, like a Judge do to a criminal.

Give it a miss.

Lizardo said...

Must be from the BANK OF CONGOON. *snigger*

Sylvester Ong said...

Dear All,

Thank you for the questions posed.

I address the following here.

1. Which bank is offering this?
I am sorry I am instructed not to disclose this publicly because it is an "exclusive" investment. However, if anyone is really interested, you can contact me at ongzhs@hotmail.com where I will eventually refer you to my friend who is dealing with this.

2. Documents
Yes! I am so thankful for this. I have seen the BG. It has the bank's stamp and stuff, I would say this is really legit. There is also another agreement binding the company and the investor, the agreement is as transparent as it gets because it states the exact dates, for 25 months, the company has to payout x amount to the investor etc.

3. What are the underlying instruments of this investments?

I was told, this company that is MAS regulated (yes I checked it up), is working with banks, where they have this platform of existing investments, ranging from low-medium, medium-high risks instruments. The initial capital fund is of course diversified by the bankers themselves. I believe we have all heard of these things before.

4. Is the interest also guaranteed?
No, the interest is not guaranteed. I guess if the interest is also guaranteed then it would really be "too good to be true", especially when we are talking to about such big amounts and returns.

I hope I have answered all the questions. I would like to really thank you guys for posing these questions to me too. Like I've said, there's not much I can disclose, however if someone is really interested, you can contact me at ongzhs@hotmail.com

A happy new year to everyone:)

Best regards

ahyu02 said...

From the description seems like the BG only guarantees the capital return of this investment. Is there any guarantee on the principal itself?

If there is no guarantee on the principal, 4% times 25 months is 100%. In another word, the BG only guarantees the amount you invested but not any return.

AK71 said...

"The group also promised "exponential" returns and claimed that a US$1 million investment would yield US$2 million a day, and could earn up to US$150 million in less than four months..."


Tanya said...

One of my banker client once told me..

If the rate of return is greater than interest of loans you can get, be wary... coz no one shares free money to anyone. If rate of loan interest is lower than guaranteed Interest earned, that fellow would have borrow billions and made billions.. why share ?

AK71 said...

Hi Tanya,

Each time, I have a meeting with my banker, he fails to sell me anything. Why har? ;p

Monthly Popular Posts

Singapore Business

Business News

Bloggy Award