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Thursday, 3 April 2008

Sunshine Empire - Too Good To Be True?

Blogged By: Low Hang Wei

If you have heard of Sunshine Empire, then you would know of the insane returns that they have been projecting. While most of their merchants do acknowledge that these returns are not guaranteed, it does not change the fact that many people who buy into the program are expecting those returns. Many people are unaware of the potential risks of putting their money in a program like Sunshine Empire.

Firstly, the benefit illustration that their merchants are using in their presentations exceed a 100% annualized return, which is around three to five times the performance of top investors like Warren Buffett and Peter Lynch. That alone is enough ground for people to shout ‘too good to be true’. Additionally, their customer rebate program sounds just like a Ponzi scheme, since it basically takes only 10% of membership fees to rebate current members. In short, people who joined later are paying people who joined earlier. In order for a ponzi scheme to sustain, the amount of members need to grow at an exponential speed month after month. That alone is enough reason to drive rational investors away.

However, I recently decided to get a slot in Sunshine Empire and paid for the membership fees and GP fees of $11,800 just today.

Do I think that it’s a wise investment to make?
Not a chance, Sunshine Empire is not even recognised by MAS as an investment vehicle in the first place.

Would I refer anyone to put their money in Sunshine Empire?
Fat hope, why would I refer anybody to something that I do not think is a wise investment.

Why did I put my money in Sunshine Empire then?

  • The desire to grow my money made me blind.
  • While their customer rebate program sounds like a Ponzi scheme, their customer loyalty program does make a bit of sense. If you don’t know what these are, don’t bother to find out, since I do not recommend anyone to put their money in.
  • This amount of money is what I made in investments for the year and I can afford to lose them.

Basically, the last point is the most important point. Never put your money in these type of schemes if you cannot afford to lose them. I sincerely feel that this whole thing is very risky, but I’m willing to take the risks. I don’t know about you, but my advice to anyone would be… stay away unless you are prepared to part with your money forever.

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