It was only after I read Rich Dad Poor Dad that I re-looked into the MLM. I took my time, done some study and attended seminars. Finally I know how to differentiate between a good and lousy MLM: business integrity and product quality.
- Business integrity. An MLM company should have code of ethics and conduct. In addition, there must be clear policies such as refund policy, grievance procedures and rules that govern the way their distributors conduct their business activities. In Singapore context, MLM companies that are registered under the Direct Selling Association of Singapore should be quite reliable although that is not a guarantee.
- Tested product quality. Except for the business model, a good MLM company is no different to Wal-Mart. They are all selling products that are of good quality, of certain commercial value and that people want it. The products must have a reasonable commercial value. If you pay $2,000 for a pen-holder, you may be in a pyramid selling. And the salesmen are rewarded based on their sales result. So the organisational structure is different, but the principal is the same.
Finally I joined an MLM company - Amway. I have done my homework and I have full knowledge of the business. There are no hard-sales tactics, no camera tricks but just selling the (household) products. Hardworking and successful salesmen will finally earn significant passive income. I started to share with a few friends honestly and openly. A few of them joined in but were not motivated to work hard partly because they are in a comfort zone – civil servants. As my mentor adequately put it – if success is not a must, then dream will continue to be just a dream. As a result, my hope of gaining passive income through MLM ended within a year. But my friends, those downlines, continue to be my brothers till now (and forever).
Business Venture
If you have read Rich Dad Poor Dad, you will know that the bottom left quadrant is business venture. Yes, you can make lots of money if the business venture is successful. Compare to employment income, business venture actually make it easier to jump from left to right quadrant (passive income). Naturally, business venture comes with high risk but equally high gains. There are various sources of passive income. In case you ask, I’ll share one that I know. Imagine I strike lottery of say $500,000 to a million, I don’t have to work anymore. I simply put most of the money in high yield and defensive stocks such as bank, SPH, Singapore Airlines etc. In Singapore context, it is not difficult to find companies with stable dividend policy and with the right price, you can get at least 5% yield. Disregard any capital gains, the dividend I expect to collect from these companies will exceeds my annual employment income. I don’t have to do anything. I simply select and invest in wonderful companies and don’t gamble. And I’m free! And when these companies grow and expand…
“That is commonsense, I also know”.
Again I have to repeat my lecturer’s quote “commonsense is the least common human attributes”. One of my colleagues in my office actually strike lottery around end 90s. Without knowledge in investment, his family bought a “big house”. If you are a Singaporean, I am sure your eyes and mouth will open wide. Yes, that’s the worst time to buy property. Indeed, the wrong moves wipe out his windfall. Commonsense you said?
In 2006, Bob, which I mentioned in my previous article was dispatched by his company to emerging countries such as India and Vietnam. His company was expanding into these countries. Shortly after he was back from Vietnam (Da Nang), we met at MacDonald to have coffee. Remember the story of You Tube that made the three founders billionaires? They came out the idea of online video while having a drink in a Pub? During our coffee session, Bob told me that he fell down in the bathroom while he was at Vietnam. So he wanted to find (Chinese) medicated oil to rub on the bruise. Surprisingly, after visited a few pharmacies, none of them sell medicated oil. Naturally, I don’t believe in his story, but he swore on it. And then he said he knew a Sinseh (Chinese Doctor) in Chinatown selling traditional (secret recipe) medicated oil. I said “let’s don’t waste time drinking coffee here, let’s take a walk to Chinatown.
Lucrative Medicated Oil Business
Cut the long story short, we visited the Sinseh and expressed our
interest to carry his family’s brand. Although their business is just a small shop in People’s Park Complex, they have made enough money from their business and wanted to quit. The Sinseh intends sell his family brand plus recipe to us (at S$1 million). With a good start, we started planning our business venture. We met once a week to brainstorm on our project; I covered Vietnam’s business environment and regulations, analysis of medicated oil companies (Tiger Balm, Eagle Brand, Axe Brand) plus cashflow forecast while Bob study on marketing strategy and linking up with his connections in Vietnam. Although subsequently our research revealed that there are currently a few medicated oils selling in Vietnam, we were not discouraged. This is because with Vietnam’s tremendous growth (just after China), opportunity is in abundance. Most importantly, my research study suggested that selling medicated oil is a very profitable business that makes Tiger Balm into a blue chip stock. Finally, we established certain (verbal) agreement with the Sinseh, registered a company name and book our air tickets. We wanted to do an actual ground study before we put everything in legal forms. With same mindset, same academic ground, and been friends for numerous years, we believed that we are the best team and we are going to make history.
Unfortunately, like in every movie, something happened at the very last hour. I re-looked into my forecast and felt that it may be too optimistic or not conservative enough. In worst case scenario, our capital layout will not last even for a year. We need additional partners. The problem is we could not agree on each other’s candidates. While Bob has his own choice (ex-Informatic chairman), I have mine (my mentor and a trainer in Neuro-Linguistic Programme). Finally, the deal was off, air-tickets wasted, and company not incorporated. There goes another opportunity to earn big money.
Targeting China's Hot Stock
Sometime in Mar 2007, I met another guy Jeff for coffee. He was doing his own rental business but wanted to know more about stocks. I don’t mind sharing with him. During the coffee session, I realised that he wasn’t actually interested in value investment; he was more interested in quick and easy money. Apparently, Jeff is quite familiar with China. He has been flying there frequently. He also knows that China people are crazy for stocks as a mean to get rich. He has an idea to make money from these people. I thought he was thinking of setting up a broking house or some research company. I was wrong.
Well, his idea was to set up a website providing “insider news”. The
news may be true or fake. But genuine insider news can also be acquired through kickbacks; that’s how things work in China. In Singapore, you do this (bribery, insider news, misleading other investors) and you get caught, you go Changi straight away. In case you wonder what is a “Changi”. Changi here refers to Singapore Changi Prison. Anyway, Jeff’s strategy is this: people will surf your website and some will use your so-called “insider news” at no cost. Chances are, some will make money while others may incur losses. For those who made some money, they will come back. Then the website will continue to offer inside information, at a certain fraction of the punter’s profit. As long as a small fraction of the China people believed in the inside news, you do the maths.
I told him that I won’t do it. It’s unethical and who knows the 公安 (Chinese police) may also lock us up. He critised that my approach to business venture is wrong; that I’ve been talking too much but no action. “There is no time to wait, research, planning and forecasting etc. When opportunity comes, you must grab first! If there are problems along the way, then solve it one by one!” I just smile, knowing that if I ever venture into business, he will never be my partner. He may be right, but it doesn’t matter to me. I will continue my search for opportunity to earn big money ethically and then to convert the money into sources of passive income.
To be continue……
- Business integrity. An MLM company should have code of ethics and conduct. In addition, there must be clear policies such as refund policy, grievance procedures and rules that govern the way their distributors conduct their business activities. In Singapore context, MLM companies that are registered under the Direct Selling Association of Singapore should be quite reliable although that is not a guarantee.
- Tested product quality. Except for the business model, a good MLM company is no different to Wal-Mart. They are all selling products that are of good quality, of certain commercial value and that people want it. The products must have a reasonable commercial value. If you pay $2,000 for a pen-holder, you may be in a pyramid selling. And the salesmen are rewarded based on their sales result. So the organisational structure is different, but the principal is the same.
Finally I joined an MLM company - Amway. I have done my homework and I have full knowledge of the business. There are no hard-sales tactics, no camera tricks but just selling the (household) products. Hardworking and successful salesmen will finally earn significant passive income. I started to share with a few friends honestly and openly. A few of them joined in but were not motivated to work hard partly because they are in a comfort zone – civil servants. As my mentor adequately put it – if success is not a must, then dream will continue to be just a dream. As a result, my hope of gaining passive income through MLM ended within a year. But my friends, those downlines, continue to be my brothers till now (and forever).
Business Venture
If you have read Rich Dad Poor Dad, you will know that the bottom left quadrant is business venture. Yes, you can make lots of money if the business venture is successful. Compare to employment income, business venture actually make it easier to jump from left to right quadrant (passive income). Naturally, business venture comes with high risk but equally high gains. There are various sources of passive income. In case you ask, I’ll share one that I know. Imagine I strike lottery of say $500,000 to a million, I don’t have to work anymore. I simply put most of the money in high yield and defensive stocks such as bank, SPH, Singapore Airlines etc. In Singapore context, it is not difficult to find companies with stable dividend policy and with the right price, you can get at least 5% yield. Disregard any capital gains, the dividend I expect to collect from these companies will exceeds my annual employment income. I don’t have to do anything. I simply select and invest in wonderful companies and don’t gamble. And I’m free! And when these companies grow and expand…
“That is commonsense, I also know”.
Again I have to repeat my lecturer’s quote “commonsense is the least common human attributes”. One of my colleagues in my office actually strike lottery around end 90s. Without knowledge in investment, his family bought a “big house”. If you are a Singaporean, I am sure your eyes and mouth will open wide. Yes, that’s the worst time to buy property. Indeed, the wrong moves wipe out his windfall. Commonsense you said?
In 2006, Bob, which I mentioned in my previous article was dispatched by his company to emerging countries such as India and Vietnam. His company was expanding into these countries. Shortly after he was back from Vietnam (Da Nang), we met at MacDonald to have coffee. Remember the story of You Tube that made the three founders billionaires? They came out the idea of online video while having a drink in a Pub? During our coffee session, Bob told me that he fell down in the bathroom while he was at Vietnam. So he wanted to find (Chinese) medicated oil to rub on the bruise. Surprisingly, after visited a few pharmacies, none of them sell medicated oil. Naturally, I don’t believe in his story, but he swore on it. And then he said he knew a Sinseh (Chinese Doctor) in Chinatown selling traditional (secret recipe) medicated oil. I said “let’s don’t waste time drinking coffee here, let’s take a walk to Chinatown.
Lucrative Medicated Oil Business
Cut the long story short, we visited the Sinseh and expressed our
interest to carry his family’s brand. Although their business is just a small shop in People’s Park Complex, they have made enough money from their business and wanted to quit. The Sinseh intends sell his family brand plus recipe to us (at S$1 million). With a good start, we started planning our business venture. We met once a week to brainstorm on our project; I covered Vietnam’s business environment and regulations, analysis of medicated oil companies (Tiger Balm, Eagle Brand, Axe Brand) plus cashflow forecast while Bob study on marketing strategy and linking up with his connections in Vietnam. Although subsequently our research revealed that there are currently a few medicated oils selling in Vietnam, we were not discouraged. This is because with Vietnam’s tremendous growth (just after China), opportunity is in abundance. Most importantly, my research study suggested that selling medicated oil is a very profitable business that makes Tiger Balm into a blue chip stock. Finally, we established certain (verbal) agreement with the Sinseh, registered a company name and book our air tickets. We wanted to do an actual ground study before we put everything in legal forms. With same mindset, same academic ground, and been friends for numerous years, we believed that we are the best team and we are going to make history.Unfortunately, like in every movie, something happened at the very last hour. I re-looked into my forecast and felt that it may be too optimistic or not conservative enough. In worst case scenario, our capital layout will not last even for a year. We need additional partners. The problem is we could not agree on each other’s candidates. While Bob has his own choice (ex-Informatic chairman), I have mine (my mentor and a trainer in Neuro-Linguistic Programme). Finally, the deal was off, air-tickets wasted, and company not incorporated. There goes another opportunity to earn big money.
Targeting China's Hot Stock
Sometime in Mar 2007, I met another guy Jeff for coffee. He was doing his own rental business but wanted to know more about stocks. I don’t mind sharing with him. During the coffee session, I realised that he wasn’t actually interested in value investment; he was more interested in quick and easy money. Apparently, Jeff is quite familiar with China. He has been flying there frequently. He also knows that China people are crazy for stocks as a mean to get rich. He has an idea to make money from these people. I thought he was thinking of setting up a broking house or some research company. I was wrong.
Well, his idea was to set up a website providing “insider news”. The
news may be true or fake. But genuine insider news can also be acquired through kickbacks; that’s how things work in China. In Singapore, you do this (bribery, insider news, misleading other investors) and you get caught, you go Changi straight away. In case you wonder what is a “Changi”. Changi here refers to Singapore Changi Prison. Anyway, Jeff’s strategy is this: people will surf your website and some will use your so-called “insider news” at no cost. Chances are, some will make money while others may incur losses. For those who made some money, they will come back. Then the website will continue to offer inside information, at a certain fraction of the punter’s profit. As long as a small fraction of the China people believed in the inside news, you do the maths.I told him that I won’t do it. It’s unethical and who knows the 公安 (Chinese police) may also lock us up. He critised that my approach to business venture is wrong; that I’ve been talking too much but no action. “There is no time to wait, research, planning and forecasting etc. When opportunity comes, you must grab first! If there are problems along the way, then solve it one by one!” I just smile, knowing that if I ever venture into business, he will never be my partner. He may be right, but it doesn’t matter to me. I will continue my search for opportunity to earn big money ethically and then to convert the money into sources of passive income.
To be continue……
