my L$600,000 Ginko investment

(a little long, but TONS of Ginko detail)

I know I'm a little late on this topic.
I've been staying away from the forums trying to do more
"productive" things However, last night, a friend directed
me to the original thread. I've spent the last 8 hours
reading the full content of each post, and 3 or 4 other
threads along the same lines.

Seems like everyone has already made up their minds.
I don't expect to change anyone's opinion, but I thought
some people might like some detailed info on my
Ginko experience.

Two months ago I was directed to Ginko as "a great opportunity".
After a lot of math I decided I would go in BIG TIME,
but the Ginko notecard said:

"Also, there is inherent business risk involved in this venture.
These accounts not being insured in any way by any government,
like in the case of most real life savings accounts, we cannot
guarantee that we will never go bankrupt."

.. and that was a little scary, because I was about to plunk down
US$10,000 (yes, $US). As an adult investor knowing just a little
about "risks" from my dabbling in the stock market, I decided I should
talk to the guys at Ginko about WHAT they are investing in, to
determine my risk.

I ended up talking to 4 people from Ginko, including (lastly) Nicholas.
One, admittedly was new, so I didn't get a hole lot from them, but
they still tried to answer as best they could - I was asking some tough
questions! Of the other two "employees", here's what I got:

Q) What is the risk?
A) very little risk

Q) Seems to good to be true! How can you pay such high returns (almost 100% annually)
when nothing I'm aware comes close to that for such little risk?
A) Some has been made off trading at GOM, some has been invested in things off-world,
4 sims that are also "profit centers" (dwell, casinos, lottery, perhaps shops)

[one of them offered me some pretty detailed GOM trading advice since I
mentioned I was doing that too. It seemed fairly obvious this was probably
a decent part of the income, and I was satisfied they probably knew what
they were doing in that area]

Q) What are the investments of the top 4 accounts? And how long have they had accounts?
A) [I was told, but wont give amounts here. 2 had a decent amounts more than I have now, 2 had a bit less]
Account life ranged from 4-8 months. Both of them (asked separately) gave the same answers.

Q) Is there any real-world corporation linked with you, that I can look up?
A) No. Ginko only exists in SL

Q) How much cash can Ginko handle? I mean, if someone gave you a million $$ could
all that be used right away, or would some be wasted (not used)
A) I don't know of a cap. Nicholas has suggested we could soon reach $30mil very quickly.



I decided to get started, and talk to Nicholas more when he got on later.
I was trying to avoid paypal fees, which would be US$290 on $10,000 and so worked
out a deal with one of them where I would buy $L directly from them via my personal
paypal account. He only had about L$200k at the time and at the current price of $L
on GOM we decided on about US$650. I was a little weary of just "GIVING" someone
I didn't know $650 and so decided to try and work out some form of receipt, as well
as doing it in repeated partial payments of only US$100 at a time. But as soon as I
said it, he replied "WHAT? I just deposited the full amount in to your account!" I did
a quick check, and sure enough... so I felt rather bad for making only the first $100
payment (seemed like HE trusted ME without question). I immediately paid the
remaining $550. We "shook hands" and departed. After a few minutes I was on
edge again. It JUST hit me that if he cold directly deposit cash IN to my account,
then he could take it out also! -- I had been expecting to be paid AV to AV, not
direct deposit. Anyway, I decided to have positive faith, which has lead me to a
more trusting position now.

A day or two after that I managed to talk to Nicholas:

I let him know I was thinking about investing US$10,000, but had some questions first.
He gave an odd reply (I forget exactly), but it was a little discouraging. However, I
continued with the same questions:

Q) How high is the risk
A) Pretty high

Q) What is Ginko doing to offer such high returns? [I felt a little bad/nosey. If it was
ME running a lucrative biz, I would not want to share MY secrets!]
A) Several in-world methods (as stated by the others), as well as [other] speculations
which I wont mention directly, but I'm sure we all know things like stocks can have
some pretty good returns.

After a few more minutes of conversation (and another outright comment he made) I
decided not to invest the US$10k, but rather about US$2k (for now). The change was
not because I felt any dishonesty. In fact, he and the others gave even MORE info
about their biz than *I* would have given out! The reduction was decided based
on something that was going on in the short term (also remember GOM was bailing
at this time too) and Nicholas was very upfront about it. To be honest... he talked
me OUT of giving him the full US$10k !

I've now been enjoying my Ginko gains for 2 months. This is not to say they are NOT
a ponzi scheme or that they aren't doing anything in the real world which is considered
illegal, because I honestly have NO way of knowing that for sure. Even if Nicholas
came out and said he was investing in the HANS, TSO, and GI stocks with their
awesome 3yr returns there is no way to be 100% sure.

Now, here are some of my opinions and observations:

1) Some people claim it MUST be a ponzi scheme because such high gains cannot
(er, have not in most the real world) been maintained
a) Ginko has never stated their rate would not change. In fact, in the last 2 months
I've been with them, it's gone from .17% to .15% to .14%
(/130/38/72894/6.html#post760465)
b) I am involved with an investment advisory and stock portfolio that has seen a
yield of about 84% for the last 3 years. Just lucky? Probably! But my bank
account can't tell the difference. If the gains go down to 15% for the next year
I'll STILL be quite happy.
c) There are other methods to gain decent yield cash with no risk.(mentioned soon)
Just because YOU don't know about every possible way doesn't mean they don't
exist. I bet you didn't know about the 84% yielding stock portfolio either.


2) In a very nice rebuttal
(/130/7e/71981/2.html#post748312)
Nicholas agrees that Ginko investors have about L$16m invested. At the current
rate of .14% daily, then they are paying out L$22,400/day which is close to
US$90/day. All things aside, how many of you big time SL land owners, content
providers, casino owners make at least L$22k/day? I hear several do. How many
of you can make US$90/day outside of SL, at your normal job? I doubt Nicholas
is funding all this from his own pocket, but how many of you fund your SL
entertainment (or biz) with US$ regularly? -- perhaps even more so if there are
hopes of starting a profitable biz here in SL!?

But I don't think he would need to come up with ALL that... casinos, lottery, other
in-world "profits centers" help. Besides that.. how many of you are aware that
camping chairs pay as much as L$5-6 every 10 min? At L$5/10min that is
$720/day per AV sitting. With 5 helper accounts sitting, that is L$3600/day...
what about 10 helpers? 20?

It's not hard to see how they could EASILY maintain L$10,000/day or $20,000/day
with all these incomes combined.

3) Some say it looks like a ponzi scheme because the gains are going down!?
Can no one figure out any legitimate reason for this? Let's say I have a fixed
income (20 chair campers for example) my income might be L$15k/day.
In the early stages when few people invest small amount, I can afford to
give away a LOT in hopes to gain growing momentum for my biz. As more
people catch on and invest.. and the amount needed to pay interest reaches
$5k/day, then $10k/day, etc.. I will need to lower the interest rates (and/but also
hopefully find other sources of income).. which Ginko has said they are
doing with the addition of "websites", and the new sims they are adding.

It takes money to make money, and even though camping might yield
easy results it is not as quick as having a ton of people throw cash
at a newly offered, interest earning "savings account".

In fact, when I was trading on GOM, I was VERY eager to get as much
$US converted to $L as possible to enable more trade volume. It struck
me that Paypal and GOM fees were pretty steep, so if I could get other
residents to "loan" me $L, I could get around those fees, make some decent
money on 2cent tier trading (those who were doing it know), and then
repay the "loan" in short time, with extra cash in my pocket to continue.


4) Some people claim that first life savings institutions need a prospectus.
Uhm, last I checked we are in SECOND Life, not first life... we don't have the
same laws here. So, some people scream that we NEED laws like that..
and then bad mouth LL for not creating such laws... and even worse, since LL
seems to "look the other way".
(/16/c0/72263/1.html)

However, from what *I* see.. LL is only doing what they have
always said they will do. "We provide the platform. You create
the world". And that is EXACTLY the way many would like it!
Including those who see SL as a potential platform for "The Metaverse".
LL should not be making ANY laws! They should ONLY provide
a platform, and we the residents (if we want laws) need to organize
our own governments, laws, enforcement, etc. Yes. There will be
(should be) different "countries" within our SL world, with different
elected leaders and different voted-in laws. If a resident does not
like one place.. then they can go live in another area where the
laws are more to their liking... but I digress (that topic is for another thread).

As far as ponzi schemes being illegal in first life... so is gambling
and prostitution in most places, but they are perfectly legal here.
So let's not get on the "if it's illegal in FL then it is automatically
illegal here in SL too" train, please.

5) Ginko can ONLY be doing 1 of 3 things:
(/130/38/72894/6.html#post760476)


C) doubt it, but I DO know people in SL that give tons of their cash to others
and enjoy it.

B) possibly, but as I said.. not illegal here. Certainly unethical, and it would
probably get them banned, at least (I hope)

A) probably they DO have a way of providing 66% gains which is only
L$22k/day right now. and was less (much less) in the past. It's NOT
guaranteed (everyone should know this). Why doesn't he use his own cash?
Because if I'm starting a biz and have very little money, it might go faster to
pay out small (initial) amounts to get a lot more quick cash.
Think of it as THEM getting a big loan and paying out interest.


6) And FINALLY... let's look at everyone's behaviour... during the course of ALL
threads I have seen NO ONE from Ginko even so much as raise their voice (as
much as can be expected in text)... and certainly not slander or accuse anyone
of anything.
Yet, I see constant accusations of pending theft for example, here:

/130/7e/71981/7.html#post750233
/130/7e/71981/7.html#post750651

I see outright slander here:
/130/38/72894/4.html#post759545
and
/130/7e/71981/6.html#post750129/130/7e/71981/6.html#post750129

and in that last link I even see an outright aggressive threat against
another residents biz:
"I warn you. I am not going watch some crook take whole SL economy hijack
and scam the newbies. You better show us the whereabouts of every single L$
you took or I will end this. It might cost me millions, but I don't care. This
kinda scam goes so 100% against every sense of morality in my bones that I
forget my business, forget my money, forget the PR and just hunt you down."

I actually have very deep respect for this awesome capitalist who's grown a hugely
successful SL biz from nothing! This is truly one of the best examples of SL
providing a platform for financial success. However, I have not been around
long enough to see how these people have behaved in the past (good or bad),
but just from THIS event, it seems one of them is a WHOLE LOT more calm, and
level-headed than the other. If I was going to do biz with one OR the other, I
would have to consider the handling of this situation in my decision.

Many people could certainly act with more professionalism... and I'd prefer to see
SL adopt the policy of "innocence until PROVEN guilt" rather than assuming guilt
first, and requirement the accused to PROVE they aren't going to do anything bad
in the future... how do you PROVE that?

Of course, there must be some REASON for the initial "warning"... smells like
smoke so there MUST be a fire?! I'm going to have to side with Anshe on this
one (again, innocence until proven guilt).. that she honestly does not want people
to get ripped off to the tune of L$16m ! Even though others have given a few
possible motives
(/130/3c/72531/1.html#post755339).

Personally I would be able to give her even MORE credibility if she had just
posted the "alert" msg, and left it at that.. people alerted, mission accomplished.
The continual hounding and hounding made it seem much more like the possibility
of a strategic business attack. In the end there is no proof yet, so it becomes just
another straw on the camels back.


I will continue to (more) cautiously do biz with Anshe, and I will continue
to (more) cautiously invest my $L in Ginko. I'm an adult, have weighed my
risks and will make my own decisions.

There's no need to reply to this if I can point to a post it's already
been said... I've read them ALL! ... I will not respond.


NOW... I will try to avoid the forums again
(and finally go to bed)

Fascinating.

So... a nice burst of 10k USD from one person was *not* desireable?

Yet clearly, aggressive investment from a broad number of smaller investors is?



Gee, I can't possibly imagine why. Anyone have a guess?

LOL

Because that would dramatically increase the amount of money he'd have to pay in dividends.

The trouble with banking is that if someone DOES make a large deposit, you have to pay them the dividends, even if you can't use the deposit right away to fund investments. Typically, banks make money on interest paid on loans and use part of that interest to pay dividends on deposits.

But if the bank already has a large cash reserve, and someone comes in and makes a huge deposit, the bank then has too much cash on hand. That's not good. When that happens, their loan department gets very aggressive.

A SL investment company may not have that option. If the owner of Ginko is not giving out loans but is instead using his own businesses to make money, instead, he has to find a way to put that money to use in order to be able to pay dividends on it.

There's really nothing complicated or sinister about that. That's just how the investment and banking world works. In short, yes - a thousand investors putting in 10 dollars is much better than one invester putting in $10,000.

Portrait of a Ginko supporter:

Join Date: Oct 2005
Posts: 146

Super. That settles that.

Kazuo, you might look in game at the birthdate, as has been said before, in the other posts, the forum date does not reflect the ingame date. I looked, and saw the actual in game bithdate. They have been around longer than you.

You had 16 posts before posting this. You knew a lot about the L$ and SL economy when joining SL, as look at your previous post. This was also not your first post regarding Ginko, the other one advertising Ginko and camping chairs as a way of making money. Your fairly new, new enough for a Ginko investor or a Ginko employee to register, make a few posts, sit back, and wait til the right time to make Ginko look like a respectable company. I'm not buying it, I have many doubts when it comes to Ginko.

So... if I understand correctly, by your theory 10k USD would cause Ginko to have *too much* cash?

While borrowing smaller amounts of money at *66%* interest?

Bloody fascinating.




I really have to hand it to the managers at Ginko. They are brilliant.

No, really! I have a newfound respect I never thought I would have - not one whit of sarcasm intended.

I completely agree with you.

Postcount in the forum != experience within Second Life.

I don't check the forums unless someone links me to a topic of interest, or whenever there is an update to Second Life, and I rarely reply.

I can assure you, that other than having an account with Ginko Financial, Ashling Babka is in no way affiliated with Ginko Technologies, it's subsidiary of Ginko Financial, or any other affiliated organizations.

It's speculation like this that starts flamewars. If you're going to make accusations, make sure you have solid proof.

CCC

all of this is fine and well, but people seriously *SERIOUSLY* forget that in an 'investment scheme' (legitimate or not) you have not *MADE* a single dime, until your total returns, that you have PULLED OUT of it, are greater than the amount of real life money you have put into it.

It sounds all well and good to say that you are going to get x amount back a day, but until the day comes when you take *OUT* yer 1,000,001th linden, on your 1,000,000 linden investment, you haven't actually made a dime.

for ginko that date for most everyone is still a long *LONG* way off.. if you 'let it ride' you are gambling a) that ginko will be here a long time, long enough to pay you back more than you put in b) that ginko is not going to change their rates, while they have said multiple times they will not guarantee that and c) that when you do 'make' that 1,000,001st linden on yer 1,000,000 you initially put in, and go to withdraw it, you are going to get it all.

If people panic, or if the very fragile little web they have built up breaks, its all gone.

things like selling tshirts are all well and good if they can help them meet today's crop of interest payouts.. but thats not actually investing... they don't need to 'hold' yer money to do that... the money is completely immaterial... people keep forgetting this is compunding interest... unless you have a way to guarantee every tshirt sold today will somehow sell two tomorrow, there is *NO WAY* this can scale to a system with 2x as much money invested, or 3x as much, you can't just 'put in more money' and 'sell more tshirts' that doesn work that way...

*IF* this were the real world, for every dollar put in, they would have to have a VERY strict accounting of where it went, what investments it was used to further, what the returns on those investments were, and how much of those returns would be fed to the people who provided the investment capital.. and these are *VERY* slim margins

the tiniest little slivers of a percent that big financial companies take, but they move a few hundred million shares a day, and it adds up. what they *CAN NOT* do, is pay you the dividend on your investment, with a 'bake sale', thats flat out illegal.

DISCLAIMER: I am a former property manager for Ginko (Paris and South Paris)

I must admit, I get a bit tired of anyone slamming anything that works. GOM worked, so people railed against it. IGE works, so people rail against it. Camping chairs, money balls, prizes for guests all work, so people rail against them. Ginko works and so people need to slam them.

First off, if Ginko is not a bank. It is an investment tool, kind of like a mutual fund. If you read the information readily provided by them, you know up front that there are risks in investing in Ginko. As stated by the original poster, the management of Ginko is very upfront and tends to give out too much information, but they do that to make sure that their potential investors understand the inherent risks.

Are there those in SL who have an agenda in attacking anything that works? Yes, mostly because those things that work that they do not control are a threat to their continued success. These people know who they are and should be ashamed of their behaviour. Those that support such atrocious behaviour should be sent to the SL gallows.

IF you choose to ignore those who hate anything successful that they do not control and choose to invest in Ginko, please be sure that you understand that you are making an investment in an investment vehicle that more closely resembles a mutual fund than a bank. Understand that there are risks in both investing and NOT investing in Ginko. The decision is yours to make, not the nay sayers.

Thanks for letting me rant.

i'm right with ya timmy right up to where ya describe it as a fund, cause it ain't, and it ain't even close its a 'scheme' thats presented in a black box...

now i don't know if you've ever actually invested in a mutual fund or not, but if you did, you would find that the investment would be *utterly* transparent, you would know for every dollar you put in exactly how many pennies would go to foreign currancy, how many pennies would go to oil futures, how many pennies would go to technology stocks, etc etc even how many pennies go to the company managing the fund.

why do you know this? because many years ago the government stepped in, and decided that it was the only 'honest' or fair way to allow this sort of practice, and it is to this day *very* telling... 'schemes' never reveal their trick or gambit, because it is invariably one hostile to the investors.

Now i honestly don care much about you guys, or the people who will win, or loose, via whatever machinations are going on... what really bothers me are the callous and really almost flagrant dismissals of *REALLY SOLID* mathematically grounded concerns with the casual 'theres risks' brushoff..

okay theres risks

what kind of risks

what are the anticipated yeilds in Q1 2006, Q3 2006, in a good year how much money is going to be invested, how much is going to be returned, where are the investments or returns coming from? where are they going to? *THAT* is the kind of information that constitutes disclosure of 'risks'

you cannot put up a sign infront of your house 'warning passers by might get shot' and then use that as a defense for why someone took a 22 to the left shoulder...

you need serious disclosure otherwise as far as i'm concerned, i am going to try my damndest to keep my friends and acquintences away because you have done absolutely nothing to reassure anyone that any of what is going on is in any way legitimate. Circumstantial anecdotes, character witnesses, bad analogies to RL systems, thas great, but you guys are doin yer damndest to keep whatever is really goin on *very far* out of the public eye, and when yer talkin tens of thousands of dollars US aparantly, or more, thats pretty damn scary.

If yer system is legit just document the damn thing and post it, its not like you couldn't 'invest' in yer own mutual fund, the whole point is you do ameritrust because you dont' want the damn hastle. Failure to provide that kind of real workable risk assessment and transparency of assets, is only going to *justifyably* do nothing but cast more suspicion

People railed against GOM?

Nah, eltee, I don't know a thing about mutual funds. I mean, I was only a Quality Assurance Manager for Kemper Funds in Kansas City, so I don't really don't know anything about mutual funds.

With that massive amount of sarcasm out of the way, let me reiterate, Ginko is "more like" a mutual fund then a bank. When you open up a bank, you are tend to open up what is commonly called a "savings account". I think you have heard of those, right? I don't recall the bank ever giving me a detailed listing of how my money from my savings account was going to be used. But I was sure told about the rate of interest and about all of the fees for not having a minimum balance and for withdrawals and all of that other fun stuff.

When you open up a mutual fund account, you are opening up what is commonly called an "investment account" and unlike savings accounts at banks, your money that you invested is not always available on "demand".

Yes, banks do sell investment vehicles called "certificates of deposit", which have a higher rate of return than your simple savings account, but again, you are not given a litany of how your investment in the certificate will be used by the bank.

Yes, mutual funds do tell you what stocks they are invested in. Yes, in recent years they have become more transparent, but I stick by my statement that Ginko is more like an investment in a mutual fund than in a savings account.

Honestly, I don't need, nor do I care to know, everything single thing that Ginko invests in, possibly loses money on and such. I have too many other cares in SL and RL to be worried by that. I trust in the management of Ginko to make the best possible decisions to maximize the use of my investment. If Ginko were to go under, then that is how the cookie crumbles. I took the risk. I made an informed decision. I am a grown up and I take responsibility for my actions. Too bad others can't or choose not to.

Again, thanks for letting me rant.

no the bank doesn't generally send out a quarterly flyer of where your money is being invested, but on the other hand, because it is considered savings and not investment, they don't need to, the money will be there, its FDIC insured up to $150,000 and so on and so forth.

the biggest question that needs to be answered essentially, is simply where does the money come from that is paid out every week... if it comes from profits on the investments, thats all well and good and there is absolutely nothing to hide there, you are doing well, heck you'd prolly *advertise* it i know most successful funds boast to great lengths about the specfiic choices they've made that have increased value for those who put their money in. because that attracts new people... when things are open you can say look we made this call, it was a good one, we made our investors a bunch of cash, and i bet we can do it again!

the lack of that, the 'mystery' and the 'intrigue' honestly just really paint the whole thing in a bleak light. If you have been there and done that, you know pretty much exactly what i'm talking about... let the genie out of the bottle, if its bright and shiny, you have no worries, if its not, just let everyone get outta it while theres still some time left

Well then you've probably heard of a prospectus and a fund charter and all that nice little stuff saying what the fund can and cannot invest in and a much more robust list of what the risks are rather than just saying "there are some and mind your own damn business." And NAV and distributions and management fees and what restrictions there are on withdrawing your money and well the list just goes on and on as to what an actual mutual fund does and how whatever it is that Ginko is does not at all do.

Not at all like a mutual fund and it is misleading to suggest it.

There is NO VEHICLE. I understand that you don't even get a bloody receipt. A mutual fund purchases and holds in escrow (real legal escrow) readily marketable securities and bonds with investment money and, by law, discloses everything. All Ginko is, is an unsecured personal loan to an unknown individual who will not be liable ... or even traceable ... if he defaults.

That being said, US$ 60,000 is chump change (in terms of the SL economy) and I think some people are making a mountain out of a molehill because 16 million L$ sounds like such an impressive amount of money.



The "risk of not investing" is a meaningless term. Holding on to the cash is as close to zero-risk as possible (given that LL might go out of business, recall all currency, force a 1:2 negative split, etc.). There may be some opportunity cost of not investing, but you're right that everyone needs to make the call for themselves ... is the investment risk worth the potential reward?

Don't forget the eternally glossed over bit of detail when comparing SL to a bank/mutual fund/etc.


If you invest in a RL mutual fund, there is an actual company you invested with. You have names. You have company information. You have SOMETHING to use should you discover you are being defrauded.

I don't believe you trotted this out! So as a QA Manager, how involved were you in Mutual Fund Operations? Financial Planning? Products? Do you have a CFP or maybe a Series 7 license?

Since you're someone who has worked in the financial services industry, I'm even more amazed at your statement about Gingko. And BTW, it actually is WAY more like a bank than like a mutual fund.

It's not too late to delete your post.

Come now, doesn't everyone see the brilliance of all this?

It's a keen sharp understanding of human nature, combined with a bit of business sense.

And... when it pops... The Lindens themselves will provide anonymity unless the courts get involved, and the losers will even make up their own excuses!

Maybe even re-invest on the next round?

I have learned a great deal recently.




Brilliant. Follow-the-formula, works-every-time brilliant. I think the only slight mistake they made at all was to reply in any fashion here. Why bother?

It's clear that fiesty forum discussion doesn't rock their boat in the slightest.

The only thing that would, would be for... *gasp*... dare I say it?

A few folks to quit rationalising about withdrawal times, and realise they are never getting their big payout. After that... I think the collapse would best be measured in hours.

Of course there will be a few smug folk who did pull out in time, but to do that, I think, would require an absolutely masterful understanding of how and when humans panic.