The Invest Fair

THERE was an Invest Fair held at Suntec city from 16 to 17 August. I went to the 17th one today.

The mindset I told myself to have when I'm walking around the booth was: I'm a school student who doesn't know much about investing, so if someone were to stop me and talks more about what they had to offer, I'll stop to listen and absorb as much as I can.

This is the first Invest fair I attended. Unlike book fairs or tourism fairs, I realise that I'm very interested in what was on display.

There were several questions that passed through my mind when I was at the fair. One of them was, what has the indiviual companies have to gain by setting up a booth at this invest fair?

That question made me cautious whenever somebody approached me and preached what he or she had to offer at their booth. The most obvious question related to my worry would be, are they making money from the investments they sell or are they making more through the selling. The difference lies in that one has true wealth generation, one is just living off common hard working people who doesn't know about investing.

Most of them seems to believe in what they preach, except for 1 or 2 who seems amatuerish in talking to people. It made me question their true goals. I discovered an irony. If the investments offered to the public are so lucrative, why is there a need to share with the public and incur unneccessary costs. Those offering the investments could put in their money and get rich themselves.

Then I came to a conclusion. It might be a generalisation, but it would explain things. The reason those companies came to the fair could very well be for one of the ingredients rich people need to get rich. And that's "Other People's Money".

If you are lost at this point, I apologise. I didn't include any article to highlight the list of ingredients rich people use to get rich.

I'll put it simply, in order to reap the maximum benefit of a particular investment project offered by the source of investment i.e; big oil companies, plantation corporations or major banks, large initial investment capital has to be put in before an individual is allowed to invest. But that large sum of money is really hard to come by and really painful to lose.

So... these cunning companies took the investment offer, sliced it down to fit the mass market. If an investment offered by the source have a maximum gains of 60 to 110% return, these companies will subdivide the minimum initial investment as pre-required by the source into bite-size. Then, calculate the amount of profits they can slice off and still make the remaining returns look good to common people. Then, they package it such that its their investment and they are now offering to common people and give them the opportunity to get rich with them.

If their plan goes well, the company would be able to raise a large sum of money from individual hard working common people who are putting money and taking up the risks, without having to put in a single cent or take up a single drop of risk. Get what I mean? They keep some of the money raised as procedural fees and sends the rest to the source to invest. IF the investment goes well for the source, these company takes their calculated profits and throws the leftover to the common hard working people. Everyone happy. IF the investment turned sour, the source folds the project, all investment evapourates, the company tells their common hard working people that there are risks and that this time round they were unlucky. These common hard working loses all their money. What happened to the company? They find another big investment project and continue doing their packaging without feeling a single pinch of pain.

That's part of what it meant by using other people's money. If you are going into debt, make sure someone else is paying for you.

In conclusion, it was still an eye-opener, I didn't understood the need for seeking public investors until today. I'll definitely be more careful with my money whenever I see these kinds of investments. And so should you.