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GoldQuest

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Prometheus
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A few days back, a friends mom was trying to persuade me to invest in GoldQuest's scheme. It basically goes like this:-

1/ You invest around INR 30,000/- and buy gold coins from GoldQuest.

2/ In turn, you enlist 2 more people who will make the same investment for which you get INR 2000/- each as commission.

3/ Now, for any more members enlisted by those below you, you keep getting Rs. 2000/- as commission (and hence you can form a big tree of associations, bringing in a lot of money, 'supposedly').

4/ Caveat, you start getting the commissions only after 6 people are under you.

The gold coins are limited editions of sorts. Has anyone else heard of this? How do companies like GoldQuest make money?

Dinesh.

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We have a thread about Multi-level marketing. (search for Quixar or Amway). In general, be very wary of such schemes.

First question to ask: when you spend INR 30,000/- and buy gold coins from GoldQuest, what is the value of those coins?

That's the most important question, because it also determines the answer to: how will you convince other people to buy these coins.

Do you know what the gold content is? If you took the coins to a jeweler the day after you bought them, what would he pay you for them: remember he can make his own so called "limited editions", so he'll simply look to melting them down for the gold.

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Before one invests in Goldquest, or Amway*, etc, a simple question must be asked: "What am I producing?", and "How am I producing a value?". If one can honestly answer that question, then yes, invest in Goldquest, etc. However, I have not been able to identify what value is getting created by signing up other people, ergo, I do not engage in that business activity.

I also think you hit the nail on the head when you called it a "scheme". That is exactly what Goldquest, Amway, etc is. Unless you can prove me otherwise.

(*I know Amway also sells products, however the main point of the organization is to recuit other people)

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sN, Thats exactly what I was thinking. If you read about it, people don't particularly care about the value of those gold coins. They do care about how to market them. The main aim is to recruit more people. I think that even if GoldQuest were to do away with those gold coins and just ask for the money, people would still invest.

For me there's no question about investing in such schemes, cause neither am I convinced about its profitability nor do I have the time to go running after people.

Dinesh.

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