TODAY -

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 opendro_st@yahoo.com


* 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 e-pao.net. 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.




LATEST IN E-PAO.NET
  • Day 2 : Pung & Dhol Chollom :: Gallery
  • Sangai Day 2 : Maibi Jagoi :: Gallery
  • Sangai Day 2 : MMTA Adventure :: Gallery
  • Hazari/Tombi Polo [7 Nov] :: Gallery
  • Sangai Day 1 : Culturals #3 :: Gallery
  • She left us but who'll forget her ?
  • My New Song :: Poem
  • Indo-Naga Talks 2017 :: News Timeline
  • Thanks Dr. Sinha for highlighting Manipur
  • SN seek clarification from NSCN (I-M)
  • House panel summons Ravi to clarify on FA
  • Sangai Day 1 : Culturals #2 :: Gallery
  • Sangai Day 1 : Culturals #1 :: Gallery
  • Miss Kut #5 :: Gallery
  • Best ever Bond film for children
  • Media Challenge: Glance from hills #2
  • Hard on the hexagon of beehives, Meiteilon..
  • NPF Resolutions of Nov 22, 2017
  • Inaugural Day Sangai Festival :: Gallery
  • Featured Photo for 2017 #5 :: Gallery
  • Kokkhum Festival #2 :: Gallery
  • Seitinmang, Laljangam, Parihal: eMing
  • Khamba Thoibi & Poems on Manipur : Rvw
  • Significance of learning Chinese language
  • JFA condemns Tripura scribe's murder
  • Zeliang calls for NE Tourist Circuit creation
  • Shillong Lajong I-League Squad 2017/18
  • Tourism Potential of Manipur
  • Sangai Run-Marathon @Sendra #1 :: Gallery
  • On Peace Deal & Framework Agreement #1
  • 22nd Winners' Cup (Football) #1 :: Gallery
  • The charge of sisters :: Poem
  • Reorganisation of North Eastern Council #2
  • DAMMS Freshers / Literary Meet 2017
  • (Blank Editorial)
  • Culturals @Mera Houchongba #2 :: Gallery
  • Kang Chingba @ Wangkhei :: Gallery
  • North East Fashion Week #2 :: Gallery
  • Know The Meetei
  • Indo-Naga Peace Process :: Articles
  • Not just the Gateway
  • Use milk for silky smooth skin
  • Mobile Application for Sangai Festival
  • Manipuri Mega Photo Contest Finalist
  • 5 point resolution on Naga Political Issue
  • NE is least favoured tourist destination
  • Final: Hazari/Tombi Polo #1 :: Gallery
  • Sangai Festival 2017- Events Schedule
  • #TB hotspot cannot be on blindspot
  • United Metal 3.0 @Imphal
  • My name is Kom, Mary Kom
  • Swachch Bharath Swasth Bharath
  • Sangai Festival 2017- Online booking site
  • The Killing Fields (2013-17) :: Timeline
  • Mary set on Olympic gold
  • For every causes, there is a reason
  • Moibung Khunou -near khurkhul :: Gallery
  • Miss Kut #4 :: Gallery
  • On the Naga Framework Agreement
  • Media Challenge: Glance from hills #1
  • GIS day at NIT Manipur
  • Pangal Leader Mohammed Hanif Shah
  • NPF questions Speaker convening meet
  • Painting Exhibition by Babli Das (Tripura)
  • Looking out for possible measures
  • Manipur Sangai Festival 2016 #7 : Ooba
  • Cultural Program @ MCA :: Gallery
  • Ningol ChakKouba @MBC #3 :: Gallery
  • Oh dear Daddy, see I a Native Proud: Poem
  • Buddha's metta and karuna #3
  • Narendra Modi will never play Nehru
  • Photo Caption Contest by Whakal.com
  • General Call to All Former NPF Leaders
  • Penguin Readathon & Book Gifting
  • ENNG opposes inclusion of TCL..
  • Report alarm for Arunachal
  • Loktak witness drastic fall in migratory birds
  • Lecture on 'Rohingya Resettlement'
  • 'Weaves of Ching-tam' @London :: Gallery
  • Opening: Jadonang Football #1 :: Gallery
  • Robert's Weaves of valley & hills at London
  • Remembering boy..felled by fake encounter
  • Sangai Photo Awards 2017 : Contest
  • Meeyam meekup nahum singna leibiyu
  • HighWays : Govt. needs seriousness
  • Singcha Wuya Won @Kamjong #4 :: Gallery
  • SDG Consultation: NE :: Gallery
  • North East Fashion Week #1 :: Gallery
  • Distribution Patterns of the Asian Eye
  • Sustainable Development Goal Consultation
  • Wrangle in Mapithel dam: Legal perspective
  • In the Slums of Heaven :: Poem
  • Wreath Laying Ceremony for AR Martyrs
  • Time to take a bow, Robert
  • Create jobs for NE to stop trafficking
  • March: Mera Houchongba #4:: Gallery
  • Sin-Lang Fest @DM College #2 :: Gallery
  • Sangai Festival: Ideas for a change
  • A shadowy dreamer :: Poem
  • Winter - A blessing in disguise for us ...
  • Course in Nanotechnology at NEHU
  • Pamel : Serene Natural Hub, near Lamlai
  • Vacancy at YVU Financial Services, Thoubal
  • System Operators @PR Enterprise, Khurai
  • Just by showing concern will not change..
  • Food Stall @Phayeng #2 :: Gallery
  • The moment :: Poem
  • Board exams decoded
  • 3rd NE Fashion at Itanagar: Day 2
  • Conference : North East in Globalized Era
  • NE-IAS launched to support Startup India
  • Painting Competition on Conservation
  • Ramkung Pamei is new MHJU Chief
  • Priyogopal (Senior Artist)- Photo :: eRang
  • Kabui Dance @Jadonang Football:: Gallery
  • Fashion @NE Festival, Delhi :: Gallery
  • Deviance and Corruption in Kangleipak
  • Applied health research is vital to #endTB
  • 3rd NE Fashion at Itanagar: Day 1
  • Tri-nation Motorcycle Rally reach Imphal
  • Traffic woes continues
  • Kwatha festival #1 :: Gallery
  • Kokkhum Festival #1 :: Gallery
  • Special Rapporteur on Human Rights
  • The threat to balkanize Manipur
  • Cry of a Dying River - 6 :: Poem
  • Biological based integrated Congress grass
  • 3rd Audition of Fagi Unplugged
  • Sadar Hills District Demand: News Timeline
  • Of clean environment
  • Paonam Lily (Archery) Reception :: Gallery
  • North East Fest @ Delhi :: Gallery
  • Girls Football- Nov 4 #2 :: Gallery
  • IBSD, India & VITO, Belgium signed MOU
  • First angioplasty for in-stent restenosis
  • RIST Popular Talk-33: Quantum Hall states
  • Commonwealth alumni event of NE
  • Lecture on The Rohingya Conundrum
  • Tri-National Motorcycle Rally
  • 3rd North East Fashion Week at Itanagar
  • ILP Nov 30 deadline: Why not only for valley
  • Expected changes, do we see ?
  • Festival of Raas Leela #2 :: Gallery
  • Sin-Lang Fest @DM College #1 :: Gallery
  • Hari Uthan- Kang Chingba #2 :: Gallery
  • Code of silence: Concealing gender justice
  • God Rules Over All :: Poem
  • Five day 'Flower Show' at Ukhrul
  • Go birding to honour Bird Man of India
  • Inner Line Permit (ILP) Demand :: Timeline
  • Uphul Waiphul and Leikhom Leinang
  • A reminder to Central Govt.
  • Ningol Chak-Kouba @Pune :: Gallery
  • Miss Kut #2 :: Gallery
  • Meitei Pictographic Writings :: Book Review
  • Careers related to mental health
  • Beauty & Money for a purpose
  • Human rights infractions in Mapithel Dam
  • AMAND Ningol Chakouba at Pune : Report
  • Chef Required at Kakching
  • NHPC Raising day at Loktak Power Station
  • Of ST demand, ILP, peace talk
  • For elderly people
  • Prof. Nongmaithem Tombi Singh : A Profile
  • Hazari/ Tombi Polo Tournament #2:: Gallery
  • U-17 Footballer honored by Guv :: Gallery
  • Just in favour of nocturnal life
  • Dance of Fire Flies at Autumn :: Poem
  • North East Festival bids farewell
  • Agenda of Govt spelt out at DBC, Maram
  • Nurturing the future
  • Ningol Chak-Kouba @Delhi #2:: Gallery
  • NE Fashion Weekend @Delhi #1 :: Gallery
  • History will not forgive us
  • A girl :: Poem
  • Pre-merger political party struggle
  • JRF wanted at NIT Silchar
  • March: Mera Houchongba #3:: Gallery
  • Girls Football- Nov 4 #1:: Gallery
  • Taxi- raising Air Pollution in Ukhrul
  • Skill development training with MUDA
  • Pui Thangamliu -Photos #1 :: eRang
  • NH7 Weekender [28 October] :: Gallery
  • Surjalal: Fellow of American Physical Society
  • Salesian College Grabs UK Project
  • Prime focus
  • Miss Kut #1 :: Gallery
  • Hari Uthan- Kang Chingba #1 :: Gallery
  • Kangujam Chinglensana (Hockey) feted
  • Chavang Kut @Tengnoupal :: Gallery
  • Sub-Junior Girls Football #2:: Gallery
  • Namsai gets Buddha relic from Thailand
  • Ningol Chak-Kouba @Delhi #1:: Gallery
  • 3rd Ningol Chakouba, Delhi : A Report
  • Dr. Rahejuddin Sheikh : Best Director Award
  • Chothe: Shabu Hong Rein :: Gallery
  • Eyek Tamba :: Learn Manipuri script
  • Candle light for Belinda Morse :: Gallery
  • Exhibition of Pottery Crafts #2 :: Gallery
  • Phayeng Cultural programme :: Gallery
  • Khongjom War Memorial #3 :: 360 ° View
  • Ichangi Laidhi #1 :: eRang
  • Ningol Chakkouba by Paomee:: Gallery
  • Ningol Chakkouba @Kolkata :: Gallery
  • Ningol to her mapam lamdam :: Gallery
  • Manipuri Calendar for 2018 : Download it
  • Mera Men Tongba :: Gallery
  • Old Manipuri Movie #1 :: eRang Classic
  • Landscape of Manipur #7: Wallpaper
  • SPONSORED ADS