Nooruladha’s Weblog

The story started when I visited my buddy who worked as a unit trust consultant (Can you guess which bank, and which office? *Only for Malaysian*). Inside his fancy office, there is one Malay lady, who should remain nameless. She talked to me, after some chatting about unit trust etc, about this new *gold investment* opportunity. She was a seller of two product, one unit trust, and the other was this gold stuff.

The story is simple, you invest in 100g gold at market value. Then, the company will pay you dividend of 3% every month, for six month. Furthermore, if the price of gold increase after the six month, you can sell it back at the company at the higher price.  So, during the time, each 1g would cost about RM100. So, dividend each month will be RM300. So, assuming the price reached 120 per gram, it means at the end of six months I should get 13180, which is roughly 31.8% profit. Mouthwatering, isnt it?

Anyway, I didnt straight away jump to buy, I asked her questions.

1. How did your company make profit? So, she answered that her company buy bulk from Swiss (It does make sense at the time that you can buy bulk cheaply, but later I realized, why would anyone wanted to buy the only scarce commodity at a discount?) She explained that their company buy the gold about 5 years ago, when the gold price is just at 50 per g. Plus, the gold that she hasnt sold, they have put them in the Ar-Rahnu investment vehicle by Bank Rakyat.

2. Is there a contract? She replied, yeah, a standard document about 20 pages long, lawyery stuff in it. Everyone will signed it, the company CEO, me, a public notary, and stamp posted it. (It was my mistake that I didnt insist bringing those to a lawyer, cause now I knew that stamp post means squat. It only means that the agreement is valid, but if the company goes down, change name, it will take forever to chase them in court)

3. Really, how does the company makes profit? She also told me that the company buy and sell 916 gold, like a local trader (Habib, Poh Kong etc).

4. Then she invited me to their main offices. It was two storey building in Jalan Ampang. The office was busy, have body guard at the front, main counter, main office. A lot of activity. She told me their clients were from all over Malaysia, some even buying 2mil worth of gold. I didnt know what to think at the time, to much information.

5. The usual coffee stuff. They bring u some coffee, maybe if you are lucky, some nasi lemak or donut.

6. She said, I have an option of bringing back the gold home if I dont trust the company. But, if I joined the Al-Rahnu program, the company will give the dividend of 3%

Lo, and behold, I bought a 100g worth of gold.

to be continued…….