E-Pao! Opinions - Chain Money - A concern of economical drain

Chain Money - A concern of economical drain
By: Thoudam Opendro Singh*

Many of us would have heard of many chain money businesses like Amway or Smart Jobs or mail order, so on. I'm an expert neither in these businesses nor in general financial economics. But I would like to expose some of the obviously ugly side of such a business.

When I heard about Amway, it had already spread all across the villages of Manipur. I was then curious to know what it was. When I discovered it's working, I couldn't stop admiring the sick brain behind it. Amway was reportedly started by an American and spread across India through NRIs. Let me explain briefly how this works with assumed figures. X is the owner or the founder of this business (the top of hierarchy). He enrolls say 10 people as member of the business, with a non-refundable deposit, say Rs.2500 for each member (actually it is about Rs.4000, out of which the member will get a package of consumer items worth say Rs.1500). So, X owns Rs.25,000. These 10 people will be the second in hierarchy or call them level-2 here afterwards.

Now X lurches these 10 members promising some points, say 30 points for every 3 new members they bring into the enrolment and that these points will become en-cashable when the 3 members bring in another 3 members. Let's assume each of these 10 people in level-2 brings 4 members, which gives 40 more members at level-3 and 400 x Rs.2500 = Rs.1,00,000. Now X is the owner of Rs.1,00,000 + Rs.25,000 = Rs.1,25,000.

Now with the same bait, these 40 members will try to get 3 new members below each of them. Meanwhile X enjoys with Rs.1,25,000 collected from others. After sometime assume each of the 40 members in level-3 enrolls 3 new members below them. This results in another 40 x 3 = 120 new members at level-4 and 120 x Rs.2500 = Rs.3,00,000. Now X is the owner of Rs.1,25,000 + Rs.3,00,000 = Rs.4,25,000. Now, X has enough money to pay those 10 people at level-2 since the depth of the hierarchy has gone down upto level-4.

To make the bait attractive, X sells some cheap products at a discount of say, 20%. Wait, the item is not anything like rice or vegetable that we daily need. It can be something like tooth paste that we hardly consume one tube per month. So, by giving toothpaste worth Rs.100 at Rs.80, the member is assumingly gaining Rs.10 per month.

The hierarchical tree graph goes like this:

X (owner) Total members
10 members at level-2 10
10 x 4 = 40 members at level-3 50
40 x 3 = 120 members at level-4 170
A minimum of 120 x 3 = 360 members at level-5 530
and so on.....
The profit margin that an earlier member at the higher level enjoys from the lower level is very minimal. As the tree goes deeper and deeper, the profit from the members at further level will reduce since it is shared by members of more number of levels. But the number of members grows same as the Uranium explosion of three uncontrolled neutrons for each atom. So, the small margin multiplied by the explosive number of members gives enough heat to make the members at the top-level filthy rich, but at whose expense? At the expense of those uncountable members in the last level. At a particular level, let's say there are 10,000 members who have not been successful to enroll another new member. Now, each of these 10,000 members will be loitering around to get rid of a transferable disease by catching the friends and relatives. I have seen it. Any such poor member in the village will try to convince at least 3 people in the neighbors and around to join it so that he or she gets rid of the headache and guilt of loss. To cure one infected patient, 3 more patients have to be brought in. What to do? The only cure for any unfortunate member is by transferring it to another 3 new persons.

Smart jobs or mail orders are even worse than Amway.

My roommate, a BE (EEE), who was then a project trainee, was desperate to get some money and joined one Smart Jobs. The bonus point was that he had the choice to withdraw from the membership with full refund!! Let's me tell you how it works.

Smart Job or mail order does not involve any marketing, sales or buys. Assume I'm the first owner of this business. I ask 100 people to join this by paying say Rs.700 each. Now I have 70,000 in hand. Then I ask these 100 people to do that same job as me, i.e. advertise it to others and collect people who want to be a member. Let me assume that each one collect 10 new members, i.e. totally 1000 new members. Each new member again pays Rs.700 to me, i.e. 7,00,000. Now I have 7,70,000. Consequently I pay some commission to the members who have brought these newer people. What do I lose?? I gain without doing any job. So will anybody who has more new members under his hierarchy.

Now, my roommate decides to resign. Please note that he sent a Demand Draft. Now he is issued a cheque as refund. The cheque is crossed as "Account Payee only". This poor fellow does not even have enough money to open an account, how will he get this money back?

Please don't take it personally if any of you, my friends, has joined it. It is very unethical to earn money without any productive works. I'm not jealous if you might be a gainer, but I'm only against gaining at the cost of somebody. And the ration of gainers to losers is very small. It is irony that even the governments allow state lotteries for some tax returns to them.

Let me tell a similar story in US, which I heard from my colleagues rather than my eyes, but logically feasible. One American put up an online sales "50% off" on so many famous branded items, but not costly. He collects all the cheques and money through credit cards and credited into his account. This fellow finally sends off duely crossed cheques as refund with reason as "not able to give the limited offer since the response was enormous". But the cheque was marked somewhere or issued by something like "pornographic xxx" account. The people (buyers), who have received such cheques as refund, hesitated to drop the cheque and ignored since it was a small amount. Now the smart fellow who has collected a huge amount into his account will become the owner of the amounts if the cheques are not debited within the accepted time limit. So was he. When he was held "not-guilty", he still apologized for his tactics. Forgive me if this is a fake story.

The point is "There is no magical way to generate money other than hard work and wise use of it". The term "wise" should not harm others pocket. It is even okay if you are emptying someone else's pocket by giving him some good dinner in a hotel, but not like putting him into an illusion of making him rich. Imagine the amount of money that are being pumped out of poor economies like Manipur. Please spread a word of caution to the eager youths who tend to fail in this bait.
* The writer can be reached at

* Comments posted by users in this discussion thread and other parts of this site are opinions of the individuals posting them (whose user ID is displayed alongside) and not the views of We strongly recommend that users exercise responsibility, sensitivity and caution over language while writing your opinions which will be seen and read by other users. Please read a complete Guideline on using comments on this website.

  • Nungbi Khullen, Ukhrul #2 :: Gallery
  • Protest in Kangpokpi District :: Gallery
  • Cirrhosis: Basics & laboratory diagnosis
  • Impact of television in rural development
  • The Echoing Hills :: Poem
  • Inner Line Permit (ILP) Demand : Timeline
  • Nagaland CM respond to Dr. SL's bureau
  • Unauthorized CEC meeting
  • Student leaders detained for mobilizing ILPS
  • Earning our keeps
  • Meira Rally on Patriots' Day #2 :: Gallery
  • ... All The Flowers Gone? #2 :: Gallery
  • Shri Shri Govindaji Temple #1 :: 360 ° View
  • My Japanlan memoir after 4 score yrs
  • Traffic jam and 13th August
  • Manipur District Demand :: Articles / Photos
  • The Law is Mightier Than The Pen
  • Let the law decide
  • insurance scheme for scribes
  • Absurd 1 Village, 1 Denomination decree
  • Singcha Wuya Won (flower) #3:: Gallery
  • Sunday Cup Football @Lamshang :: Gallery
  • Gurmayum Robert wins gold at World Event
  • Loktak Project & corporate unaccountability
  • Supremacy Of The Party :: NPF
  • Binding the wound: The district row
  • Admission Notice - AiTC, Imphal
  • 'Sexuality & Internet' at Digital Summit
  • Zeliang welcomed support from NPF Minority
  • NSU site and undue communal overtones
  • Tripartite Talk: GOI/GOM/UNC :: Gallery
  • Governor's Cup Fencing :: Gallery
  • 13 Aug @Kangla & BT Park :: Gallery
  • Bruce Dickinson: "son-rise" of Iron Maiden
  • Biren should learn from Mamata Banerjee
  • The globe is in your fist
  • AR I-Day festivities with Myanmar army
  • AR celebrates 71st Independence day
  • Unconstitutionality of TR Government
  • Stadium upgrade for I-League
  • NE film festival in Delhi from Aug 18
  • Myanmarese advised to follow traffic rules
  • The human torch and AFSPA
  • The real taste of Independence Day
  • Mission XI football @ Andro :: Gallery
  • Krishna Janma @ Mahabali :: Gallery
  • Blood Donation for 13 August:: Gallery
  • Mahabali Temple , Imphal :: 360 ° View
  • Graphic & plastic arts of Zeliangrong #3
  • Silence :: Poem
  • Sport Univ: Promises kept but corruption?
  • Job requirements at SKY Hospital
  • Jobs @ National Informatics Centre (NIC)
  • I-Day Celebration at BJP State Office
  • Celebrations amid militant boycott call
  • 3 Manipur terrorists arrested in Delhi
  • NSCN/GPRN condemns raid
  • NSCN-K signing hinges on cross-border..
  • Meira Rally on Patriots' Day #1 :: Gallery
  • Patriots' Day @ Kolkata :: Gallery
  • 26th NAMA Convention Report, Houston, TX
  • Forming Plurals in Manipuri Language
  • Mammography and frequently ask question
  • Indo-Naga Talks 2017 :: News Timeline
  • NPF Office Bearers reaffirm support
  • DAN Co-ordination Meeting Resolutions
  • India and China: From rivalry to enmity
  • For better tomorrows
  • Security forces round up NSCN (IM) cadres
  • 13 August @Hicham Yaichampat :: Gallery
  • Achingliu, Haokhulan, Hiyaichenbi: eMing
  • Patriots' Day @ Hojai, Assam :: Gallery
  • Protest: malpractices of MPSC :: Gallery
  • On MPSC scam & people defending it
  • 126th Patriots' Day observed in Delhi
  • 126th Patriots' Day observed in Hojai
  • Lajong U-12 to represent India in BRICS
  • Learn something from 2015 experience
  • The district creation headache
  • State Thang-Ta Competition :: Gallery
  • Search operation [Aug 12] :: Gallery
  • 13 August Patriots' Day : Read all about it
  • Thangal General : The Patriot
  • Proxy examination and Wrong politics
  • Women should not live in fear ....
  • Summer Thoughts :: Poem
  • NPF Youth serve Ultimatum to Rio
  • A slap on the face of Christianity
  • U-Morok @ Shirarakhong :: Gallery
  • Dangers of 'Trial by Media' & the MPSC
  • Is Culture of insensible activism taking root
  • Meiteilon never been Tibeto-Burman
  • Mechanized threshing of foodgrains #2
  • ZSUB Foundation Day, Fresher's Meeting
  • Sadar Hills District Demand: News Timeline
  • Breaking the barrier
  • Natural Body Building #3 :: Gallery
  • National Handloom Day @ GHY :: Gallery
  • Chirom Indira shine in hearts of NE Weavers
  • Investigate killings as ordered by SC
  • MSTC CMD met with CM of Manipur
  • Conspiracy behind the toppling game
  • Armed groups attack..a human right abuse
  • Drawing Competition at Khengjoi, Chandel
  • Save the indigenous people cry : Valley..
  • A matter need to ponder
  • Earthen wares of Ningthemcha Karong
  • Indigenous Wrestling @ SPT #2 :: Gallery
  • Awunching Biodiversity Park #3 :: 360 ° View
  • XXVIII State Thang-Ta Competition 2017
  • India's HLPF review of SDGs & Manipur
  • Robotics as career options
  • International Day of Indigenous People
  • Rejoinder Issued By Shurhozelie Liezietsu
  • Hard facts of political crisis (Nagaland)
  • Viewing through one's community
  • Darkening shadows of doubt
  • Ziumi village, Maram Landscape:: Gallery
  • Inter School Handball Tournament :: Gallery
  • The Proud Bamboo Tree :: Folk Tale
  • Populated Attitudes :: Poem
  • Marijuana, Mahadev and Maneka
  • Notice for MSc Biochemistry Admissions
  • The Killing Fields :: News Timeline
  • Assam edition of NE India Fashion Week
  • Being different from Cong Govt
  • Cracking down on fraudulence
  • Hanuba-hanubi paan thaba :: Funga Wari
  • ... All The Flowers Gone? #1 :: Gallery
  • Need to bust racket running inside MPSC
  • Will PM Modi betray Assam in No ST, no rest
  • State Level Essay Writing Competition
  • RIST Condolence Function at MU
  • When we stumble and fall
  • Customer Care Executive @ basicP, Imphal
  • Petition for Disqualification of 10 MLAs
  • Cracking down on fraudulence
  • Rape of small newspaper
  • Landscape of Ukhrul District #2:: Gallery
  • Jhulon Nupi Pala Phamsak :: Gallery
  • TR is CM by technicality sans Legality
  • One Day in Heaven :: Poem
  • Libraries Vs Google: Are we heading there
  • ..for electrical distribution rearrangement
  • Lessons to learn from CCpur: public hygiene
  • Angaoba Film Scenes #1 :: eRang
  • Eyek Tamba :: Learn Manipuri script
  • The dawn of cricket in Manipur
  • Lumbini Leikolda Shat-houba Leirang
  • Workshop on MU Reservations held
  • Job posting at C-DAC Silchar
  • Lafikul murdered to stir communal tension
  • Wayward rules of law
  • Indigenous Wrestling @ SPT #1 :: Gallery
  • Tourist Watch Tower, Khongjom #4 :: 360 °
  • Admission for B.Ed at Manipur University
  • The Evening Blues :: Poem
  • A village called Nbena :: Book Review
  • Employment Generating Hands on Skill
  • Unnatural death of Sainik School student
  • Condemns killing of KNO/KNLF leader
  • AR conducts Pre Recruitment Training
  • Makeshift sheds at Lamphel
  • For a clean future generation
  • Mr Maipak Body Building #2:: Gallery
  • CM referring to ST Comm is ultra vires
  • VIP culture out, VVVIP culture in
  • Be an unchained raindrop :: Poem
  • Holistic education : Trends & challenges
  • Jobs - Going Officers Pamjei
  • Providing Various Health Benefit Plans
  • larification to Tokheho's recollections
  • SoO groups in the news for wrong reasons
  • Confession
  • Nongbrang, bank of Thoubal River :: Gallery
  • Pukpha Fest @Tamenglong :: Gallery
  • Binalakshmi Nepram at UN, NYC : 1 Aug
  • Free Computer Course by KEN @ Imphal
  • Where is the justice in mob justice
  • Ishu : Feature Film in Assamese :: Review
  • Flood: State efforts are too little too late
  • Crisis within NPF unfortunate : KG Kenye
  • decision-making body of NPF resolve: 2 Aug
  • NPF Legislature Party Statement : 2 Aug
  • ..honoring martyrs by raising Tri-colour
  • ..strong Opposition: Cong MLA striving hard
  • Battle Of Khongjom & Manipuris in 1891 #3
  • Khongjom War Memorial #2 :: 360 ° View
  • Oops! They've Done It Again!
  • Photography: Career through lenses
  • Mega Marathon Manipur : Download Form
  • Chemical Ecology: Info for college/Univs
  • Jobs - Nursing Aides in Singapore
  • NPF responds to MLAs' demand
  • Overlooking one's own Cabinet decision
  • Potential of our state
  • Drinking joints in a dry State : Liquor tragedy
  • Landscape of Manipur #7: Wallpaper
  • Singcha Wayawon opening #2:: Gallery
  • Manung Kangjeibung, Kangla :: 360 ° View
  • 1st Mao Market day @Nagamapal:: Gallery
  • ILP : Students protest [27 July] :: Gallery
  • Shwedagon Pagoda in Yangon #2 :: Gallery
  • Ethoi Oinam (Actress) #2 :: eRang Photos
  • Echum Lairembi, Khurkhul #3:: Gallery
  • Tapta :: Funga Wari
  • Featured Photo for 2017 #3 :: Gallery
  • Lai Khong Chingba @Thangjing #4
  • Manipur Sangai Festival 2016 #5 : Ooba