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Tuesday, 13 June 2017
Sunday, 11 June 2017
Earn your money the right way: no quick buck, get paid only for honest, hard work
Get-rich quick schemes drawing the interest of those who want to make a quick buck but really, there is no substitute in getting paid for honest, hard work
AS a Penangite, I am always asked by my colleagues and friends in the Klang Valley why is it that most get-rich-quick schemes are located in the island state and the investors mostly its citizens.
I have asked that same question myself, since I’ve heard enough stories of relatives and friends who have been entangled in this web of financial crookery.
It’s not something new. It used to be called the pyramid scheme and Ponzi but, like most, it is just another scam. The new term is ‘money game’ and it’s probably called this to warn new participants that there will be winners and losers, like in any other game.
However, no one is listening because most people are merely interested in the quick returns from their investments.
There are some reasons why Penang lang (Hokkein for people) have warmed up to these quick-rich con jobs.
Penang is a predominantly Chinese state and rightly or wrongly, the appetite for risk there is higher. Some may dismiss risk as a euphemism for gambling, but the bottom line is, many of its denizens are prepared to roll the dice.
Given that there are so few police reports lodged against operators, despite the huge number of investors, indicates the readiness of these players to try their luck.
They clearly are aware of the element of risk involved when they lay their money down, but the huge returns override any rational thinking. No risk, no gain, they probably tell themselves.
Making police reports against operators also runs the risk of “investors” getting their money stuck if the accounts of the scammers are frozen.
Risk-taking is nothing new to many Penangites. This is a state with a horse-racing course and plenty of gaming outlets. Is it any surprise then that a spat is currently playing out between politicians over allegations that illegal gaming outlets are thriving there?
One politician believes the state government does not have the authority to issue gambling licences and “to single out Penang also ignores the fact that gambling is under the Federal Government’s jurisdiction. We don’t issue such licences.”
It’s bizarre because no one issues permits to illegal gaming outlets. That’s why they are called illegal.
But there are some fundamental sociological explanations to this fixation on earning extra money in the northern state.
The cost of living has gone up there ... and everywhere, too. For the urban middle class, it is a monthly struggle managing the wages – after the deductions – settling the housing and car loans, and accounting for household items such as food, petrol, utility and tuition for the children.
The cost of living in Penang may be lower than that in the Klang Valley, but it is not cheap either. Any local will tell you that the portion of char koay teow has shrunk, although the price remains the same.
But unlike the Klang Valley, where career development and opportunities are greater, the same cannot be said of the island state.
Many of us who were born and brought up in Penang, moved to Kuala Lumpur because we were aware of the shortage of employment opportunities there.
We readily sacrificed so much, moving away from our parents and friends, relinquishing the relaxed way of life and the good food for a “harder” life in the Klang Valley. We paid the price for wanting a better life.
Job advancement means better salaries, but in Penang, where employers have a smaller base, they are unable to match the kind of pay packages offered in KL.
So, an extra few hundred ringgit from such investments does make a lot of difference to the average wage earner.
It is not unusual for many in the federal capital to take a second job to ensure they can balance their finances.
I don’t think many Penangites expect to be millionaires, at least not that quickly, although JJPTR has become a household acronym since hitting the market in the last two years. As most Malaysians by now know, it stands for JJ Poor-to-Rich, the name resonating well with middle class families.
Its founder, Johnson Lee, with his squeaky clean, boyish looks, assured over 400,000 people of his 20% monthly pay-outs and even more incredibly, convinced many that billions of ringgit vanished due to a hacking job.
Then came Richway Global Venture, Change Your Life (CYL) and BTC I-system, among others. And almost like clockwork, Penang has now earned the dubious reputation of being the base for get-rich-quick schemes.
Having written this article while in Penang, I found out this issue continues to be the hottest topic in town, despite the recent crackdowns by the authorities.
My colleague Tan Sin Chow recently reported in the northern edition of The Star that “money games are on the minds of many Penangites.”
On chat groups with friends and former schoolmates, it has certainly remained very much alive.
Tan wrote: “Another friend, Robert, had a jolt when, a doctor he knew, told patients to put their money into such a scheme. A doctor!
“From the cleaners at his office to the hawkers and professionals he met, everyone, it seems, was convinced. None questioned how the high returns could come to fruition in such a short time.”
We can be sure that these get-rich-quick scheme operators will lie low for a while, but the racket will surface again, in a different form and under a different name.
There is no substitute for honest, hard work. Money doesn’t fall from the sky, after all.
BY Wong Chun Wai The StarWong Chun Wai began his career as a journalist in Penang, and has served The Star for over 27 years in various capacities and roles. He is now the group's managing director/chief executive officer and formerly the group chief editor.
On The Beat made its debut on Feb 23 1997 and Chun Wai has penned the column weekly without a break, except for the occasional press holiday when the paper was not published. In May 2011, a compilation of selected articles of On The Beat was published as a book and launched in conjunction with his 50th birthday. Chun Wai also comments on current issues in The Star.
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On Mcoin, Bitcoin and points of investment
How to Invest in Bitcoin: 14 Steps (with PSince Bank Negara’s warning two weeks ago, the company’s accounts amounting to some RM177mil have been frozen. The cash in question is significantly much more than the previous major scheme that came under probe by Bank Negara and other agencies.
In 2012, the authorities froze RM99.8mil in bank accounts of Genneva Malaysia Sdn Bhd. Also, 126kg of gold were carted away from the office. It has been five years and the investors, most of them ordinary wage earners looking to earn an extra buck from their savings, have yet to receive their money.
One of the reasons is likely that the liabilities of Genneva Malaysia are 10 times more than the assets recovered.
MBI International, which is primarily based in Penang, has a network stretching up to China. According to reports, it has come under pressure from some investors wanting a return of their money.
However, outlets in M Mall in Penang are still accepting Mcoin for the purchase of goods and services. There is no rush to cash out, as one would have expected, considering that the accounts of MBI International have been frozen.
Nonetheless, it is only a matter of time before the value of Mcoin and the ability of MBI International to return money to its investors is put to the test.
Based on previous events that led to companies having their bank accounts seized by the central bank, it would be a long time before the investors are able to retrieve their cash.
There are some who are completely ignorant of the new global order of currencies and money, making comparisons between Mcoin and the rise of cryptocurrencies such as Bitcoin.
If anybody is harbouring any hope that the value of Mcoin would rise just like the phenomenal bull run seen in the world of cryptocurrency, they had better stop dreaming.
There are fundamental differences between instruments such as Mcoin, which in essence is a token to redeem goods at a few outlets, compared to cryptocurrency that is fast gaining traction as an alternative currency around the world.
Mcoin has unlimited supply and its value is controlled by one entity. How the value is derived is not clear.
In contrast, cryptocurrencies such as Bitcoin have a limited supply. And the supply is decentralised – meaning no one entity controls the supply. There is a ledger that tracks all transactions and measures the amount of supply and how much more is available.
The objective of the people behind cryptocurrency is to come up with a currency that is not controlled by central banks. New supply can only come about after hours of a process called `mining’.
The mining process is a complicated one. It involves many hours of programming and utilising high computing skills to predict the next chain in the block of coins. The data used is based on historical transactions and it is said that one block is created every 10 minutes.
Only one successful miner is rewarded with a slice of the cryptocurrency at any one time. He or she can then transact it in an exchange.
The first cryptocurrency is Bitcoin, which began operating in January 2009.
Bitcoin is only one of the hundreds of cryptocurrencies in existence. There are many more new coins coming up, improving on the technology pioneered by Satoshi Nakamoto.
Nobody knows who is Satoshi or if he really exists. However, the legend is that he wanted a currency that is not under the control of central banks, hence the birth of Bitcoin, the first decentralised currency.
The market capitalisation of all cryptocurrency was US$27bil as of April this year – four times more than what the value was in January this year.
Much of the rise is attributed to the volatile US dollar. A few years ago, if anybody had said that cryptocurrency such as Bitcoin would be used to hedge against the US dollar, many would have laughed it off.
Today, however, it is the reality.
The cryptocurrency fever has picked up in China, which has the largest number of “miners” in the world. One reason is said to be because some see it as one way to take capital out of the country.
In India, when the government decided to demonetise the popular 1,000 and 500 rupee notes, there was a 50% increase in the trading of Bitcoin, as people saw it as one way to legalise their black money.
Bitcoin soared past the US$2,500 mark last week, which is a four-fold increase since January this year. There are many other cryptocurrencies, such as Ethereum, that are all seeing a bull run.
The world of cryptocurrency has taken a life of its own. Computer geeks with “blockchain” expertise, the technology that drives the decentralisation settlements of cryptocurrency, are commanding more than US$250,000 per annum.
It is said to be more than what a consultant or a software engineer can earn.
Those who have put their money into cryptocurrency would be laughing all the way to the bank now. But dynamics and fundamentals are complicated. The strength of the cryptocurrency is not based on historical numbers. It does not have an asset backing it.
It is based on future expectations of what the designer of the cryptocurrency offers. It is a complicated investment not meant for the unsophisticated investor.
Only fools will go for investment schemes that are unregulated and offer promises of returns that are unsustainable. They will lose all the time.
The smart investor will rely on traditional stocks and shares with earnings that are visible. Those who are not greedy will surely gain.
The super-smart geeks are banking on the world of cryptocurrency that has a volatile history. Their fate is uncertain.
Source: The Star by M. Shanmugam
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