"If it's too good to be true, then it probably is." - unknown
The Sydney Morning Herald recently reported that the largest bank in the virtual world of Second Life recently closed its door after a run on its deposits. Ginko Financial had been offering 44% APR on deposits of Linden dollars. In a move that would not be possible for a real bank, Ginko Financial has converted deposits to Ginko Perpetual Bonds equal to the amount of the deposit. These bonds are now trading in a virtual world stock exchange, WSE, for much less than the original deposit value.
Of note, Reuters Second Life had previously alleged that Ginko Financial was running a Ponzi or pyramid scheme since the beginning. The owners of Ginko Financial have not revealed how they have been able to achieve 44% returns for depositors.
Unfortunately, all the Ginko Financial depositors have lost some real money. The virtual money does have real value since 270 Linden dollars can be converted to 1 USD. I guess 44% annual interest yield on savings is even too good to be true in a fantasy world :-)
For more on The Practice of Personal Finance , check back every Wednesday for a new segment.
This is not financial advice. Please consult a professional advisor.
Copyright © 2007 Achievement Catalyst, LLC
Wednesday, August 15, 2007
Subscribe to:
Post Comments (Atom)
Subscribe to My Wealth Builder
2 comments:
Wow, that is fascinating. I only briefly installed and played Second life but the it took too long (longer than I was willing to spend) to learn how to do the really fun cooler things.
I think that would be interesting if someone took their virtual company public and made a bunch of money and cashed out in real dollars lol...
Nabloid,
While I haven't participated in Second life, I believe one can do exactly what you suggested - IPO a virtual company public and cash out in USD. Interesting :-)
Post a Comment