Sunday, June 14, 2009

Do you think Direct Selling is SCAM?

It has been quite some time I’ve never had a chance talk to a direct selling person. Until recently, someone just started to approach me about direct selling. It is actually my neighbour insisted want to talk to me. I rejected at the first place but she told me that it isn’t anything about directly selling. Huh?

Me: What is it?
X: It is about a system.
Me: What system? Direct selling system?
X: No, it has nothing to do with direct selling. I’m going to introduce you a system. That’s why we need to talk. Can we meet tomorrow night to discuss in more detail?
Me: Some kind of the business? You want me to invest?
X: No, it is a system that I want to introduce you. So tomorrow night, okay?
Me: Okay, sure. (Just to give face since she is my neighbour. Don’t want to spoil our relationship)

What is My First Impression?

As what usually direct selling people do, they just want to talk to you no matter what. That is their first ultimate goal to approach their potential customers by not telling you first what they plan to sell you.
What the heck? You're selling stuff but you don't want to tell me what you're selling? Some more you lie... I dislike the ways they do things that doesn’t have the integrity at all. In the conservation as you can see, she kept avoiding my questions.

Conversation at that Night
Me: So, let’s start. I’m very curious about the system that you mentioned yesterday that has nothing to do with direct selling.
X: Yes, have you heard of a system?
Me: Huh? What kind of a system?
X: Before we start, you seem like you don’t like direct selling. Would you tell me why? (not answering my question again...)
Me: Yes, I can’t sell. That’s why I don’t like to sell stuff because this is simply not my strength. Unless the product is very good, then I probably can sell.
X: I see. If you don’t like to sell, you can just refer the product to someone else. For example, when you use a very good product and you definitely will share it with others, right? You don’t need to sell at all.... (Blah blah blah…. for few minutes)
Me: Yupe, you’re right. So, what is the “System” about? (not yet answering my question again about the system)

  • We talked about all these non-sense for about 30 minutes back and forth and she had not yet explained to me what the system is about.
  • She asked a lot of questions like where I buy my toothpaste, my grocery and etc. Then later she started talking about product that directly from the producer to consumers without those advertisement and etc.
  • Hey, isn't that all about direct selling right that they usually claim that their products without the charges of marketing, stocking, profit and etc?
Me: So, what is the system? I know about all these, what you have been saying so far it seems like a direct selling to me. What do you mean by system at the first place?
  • She started to explain the benefits of joining the direct sell company and how to enjoy the benefits from collecting a point.
  • This takes another 15 minutes and I stopped her half way immediately.
Me: So, this is a direct-selling "SYSTEM" in your company? So is this what you meant by the "SYSTEM" where you can also collect points and use that points for certain benefits?
X: “Hmm… kind of yes, As you see the "SYSTEM" is very powerful”. (she continued to talk about the "SYSTEM’s crap….)
Me (In My Thought Only): Why you don't want to tell at the first place? Why don't you just say the following:
  • Our company has a new system which his a totally different concept than the conventional direct-selling company. Do you want to hear about it in detail, maybe you're interested?

Is direct-selling scam?
As you probably know, direct selling is not a scam legally. It is a multi-level marketing (i.e. MLM) business with real products. Those pyramid scheme companies (e.g. swisscash) without the real products are only considered illegal. Although they’re not SCAM legally, the way the agent approaching me at least does look like a SCAM to me due to the fact that they have low integrity and unprofessional. What do you think?


I really don’t like most of the direct selling people (of course not all of them). They do not “STRAIGHT to the POINT” and talk a lot (really a lot) before go directly to the point. Their real intention deeply in their heart is want you to become their down line member rather than helping you to buy the right products that you really need.

At the end of our meeting, she did mention that buying direct sell products is actually cheaper and in fact we can save a lot and we can enjoy high quality of the product at the same time. It is cheap with good quality. I told her, if this is really true, I will 100% support your product! I really do…

What do think about direct selling or multi-level marketing? Do you think they’re SCAM?

Saturday, June 06, 2009

Simple Way to Explain “Rule of 72”

Perhaps the most useful financial formula is the “Rule of 72”. It is a simple way to “estimate” how long it takes to double your money without using the complex financial formula.

However before you even want to know about this rule of 72, the fist thing you want to know is the compound interest. This is due to the fact that, this rule only applicable for your investment that based on the compound interest (which means you reinvest your interest return into your principal).

72 / Interest Rate (p.a.) = Years to Double Your $
Example 1: Investment
How much I can double my investment return of $10k with 8% interest?

Answer 1:
72 / 8% = 9 years.

If you’re now 25 years old, you will have $20k at the age of 34 years old.

Example 2: Inflation
I spend $2k per month. How long that my spending will inflate until $4k with my personal inflation rate of 2%?

Answer 2:
72 / 2% = 36 years.

If you’re now 25 years old and when you’re 61 years old later, you need to have at least $4k for your monthly spending.

Example 3: Goal Setting 
I’m now 30 years old and I have $100k cash now to invest. I want to have $200k in 2 years time. What is investment return that I should get to reach my goal?

Answers 3:
72 / 2 years = 36%

So if you want to earn the extra $100k in 2 years time, your investment return is expected to have at least 36% returns.

Rule of 72 gives you a quick estimation on what my interest rate should be or how many years that I need to double my return. It applies to anything that as long as it is based on the compound interest principle (e.g. inflation, saving, investment and even goal setting). Hope this helps.

Didn't find what you want? Use Google Search Engine below: