Tuesday, June 23, 2009
Easy money. Or is it
Easy money. Or is it?
Quick money-making schemes are fast gaining popularity among the youth
By Rafay Mahmood
Posting By Adeel Abbas Mughal
http://jang.com.pk/thenews/may2009-weekly/nos-17-05-2009/kol.htm
"Welcome to Gold Mine International. GMI helps you build a profitable, home-based business. Currently, there's a vast amount of interest in work-at-home programmes, so now is the time to get in and start building your business. In GMI, the work you do now will provide residual income for you and your family for years to come. Once you've chosen a business plan, you'll need to promote it. Please feel free to use the resources on this site and good luck with your business. If you're looking for an honest online business opportunity, GMI is the best choice."
The above is the mission statement of GMI, a Norway-based gold company that has garnered a lot of attention from Pakistani youth, particularly Karachi. These young people market the company's products for which they are paid. "I think this is a blessing and I might take it up as a business in the near future as it is safe and profitable," M. Osama Mahmood, one of the regular investors of GMI and a B.Com student told Kolachi. Osama, along with countless other people, are working for GMI and are attracting more and more people to invest in it.
Explaining how he came to know about GMI, Osama said that since "the company is based on network marketing, the owners of GMI don't market their product officially so people learn about it through word of mouth. I used to work at a call centre as a CSR when a friend told me about GMI. At the time, I thought it was a scam." A year later, however, Osama's friends from his neighbourhood gave him a GMI presentation, explaining how the scheme works. "And this is how I was convinced that an investment of $60 is not a useless investment at all," he adds.
Osama explains that all the members are required to do is pay half the price of a gold product that costs $60 (Rs4,800). "Once you have done that, you're part of the GMI network. You then have to grow your tree by getting six more people to invest," he explains. In essence, one is required to get one investor under one's tree and then that investor is required to get one and so on and so forth. "You get $30 (Rs2,400) in your account after a completing a set of six members under your tree. It is never-ending…the more the members, the more the money."
GMI is fast becoming a trend among university and college-going students who want to make some extra money without being a burden on their parents. "My parents give me transport fare, lunch money as well as money for cell phone credit, but you still need money for recreation," says Faizan Rehman, a student of Sir Syed University, who is another active member of this 'money-making scheme'. Students like Faizan argue that it is hard to ask parents for money all the time, especially after the huge amount of money they dole out as tuition fees apart from bearing their daily expenses. "Thus, an investment in GMI proves very helpful in such cases as you can spend your own money," justifies the 23-year-old.
In fact, many students have also taken up GMI as a means of supporting their families. However, this greatly narrows down their career choices as they don't think about the quality of work they are doing. Instead, they are solely focused on the fact that they are making good money. "Several friends have taken up GMI as a business and are making a lot of money as well. However, not everyone can run after investors and give presentations because it requires a lot of time and energy. It becomes very hard to concentrate on your studies if you're into GMI full-time," adds Faizan.
Others, however, disagree. Consider, for example, Anib Abbas who recently passed his Intermediate exams with an A-grade and is earning $120 (Rs9,600) a week. "For me GMI is quite useful and I have managed to balance my studies alongside. I think more people should become a part of this company as it earns you easy money."
But what about parents? Do they know that their kids are chasing investors in order to make extra money? Osama believes most parents are aware as the $60 for an initial investment is provided by the parents – just as his did. Osama's parents, who wished to remain anonymous, confirm the fact that they were ware of this investment. "When children are mature enough to take such decisions you should not discourage them. You should give them a chance," they say adding that 'so far nothing bad has come out of it.'
But as addictive as these money-making schemes are [that work on the pyramid principle], there are a lot of ambiguities, argue critics. You are asked for an initial investment (in this case $60) and are promised a high return of investment within a few days or weeks or depending on your first assignment. While the explanation seems plausible, the GMI is a little sketchy on details. Members only discuss ways to spend the 'extra money' you will earn rather than informing new members of the fact that if you fail to invite six more members to be part of the network, then the money is wasted.
Moreover, there are no details of the main officials of GMI in Pakistan or a record of the transactions that take place within the country. This must include the name of the bank where GMI has an account. Also, since GMI is unregistered, a company under a similar name of 'Gold Mine International (Pvt) Ltd', based in Karachi and registered with the Security and Exchange Commission of Pakistan, creates further confusion. Observer’s say while there is chance of financial profit in such schemes, there is an equal probability of loss as well which one should not ignore.