Karatbars. Pyramid scheme or no?

skeptic_SA said:
Would you invest R50K here?
Click to expand...

Short answer, No.

Long answer
-Price is $61.73 per g of gold. Even at 5g for $258.88 you are still paying $51.78 per gram. According to http://goldprice.org/, the current gold price per gram is $38.84, so you are overpaying between 33- 59% for the value of the gold.
-They send you a card stating this is gold, do you have the skills to determine that it is indeed pure gold and not metals worth far less mixed with gold?
-Seems like a collectors card, what makes them so special that someone will want to buy them from you aside from their gold value (which you over paid for) when you want to sell?
-I just had a quick look and not sure I understand precisely how it is an investment aside from holding gold and hoping it will rise, and if you don't understand something don't invest in it.
-They pay you commission for selling their products with different reward levels, does that mean people are not buying their products unless people they trust recommend it, a characteristic of pyramid schemes.
-Buying large amounts of these cards increase insurance cost/loss in case of theft.

If you want exposure to gold rather get it via eft for example http://etfcib.absa.co.za/Products/Exchange Traded Funds/Commodities/NewGold/Pages/default.aspx, than some company that you are not certain is not a scam.

This company does not seem to be a miner which makes money by mining gold so they make money buying gold and packaging it and convincing people that it is a good idea to buy.

Also an internet search of the 'karatbars scam" had some of the following results.
http://factsaboutinternetmarketing....nal-scam-review-not-all-that-glitters-is-gold
http://ethanvanderbuilt.com/2014/09/11/karatbars-scam-yes-it-is-in-my-opinion/
http://kbi9999scam.blogspot.com/

So in conclusion I would rather be safe and miss out on deals like these than invest and lose in what seems a very high likelyhood to be some sort of scam, or even if not a scam not likely to be a good investment.
 
Also stay away from Verve, it's scam doing the rounds at universities. You buy and sell energy drinks. The stuff costs over R40 a can, making it hard to sell. As the guy who "works" for them told me, "you don't have to sell it, it's more for marketting. You get way more money as a reward for signing people up." He couldn't understand why I thought that it was a pyramid scheme.
 
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