Woman fails to become millionaire with dad’s heritage
With compound interest, his initial deposit of 1,200 yuan, which was equivalent to five years' income in the 1970s, could have grown by at least 50 times
Compound interest is usually the investor’s best friend, but perhaps not in mainland China. A woman aged around 60 and surnamed Chen, in Xiamen, Fujian province, recently found a receipt showing that her father had made a fixed deposit of 1,200 yuan 44 years ago in the People’s Bank of China, which at the time handled commercial banking but during the 1980s was reformed to function solely as the country’s central bank.
Chen recalled that her father, a Burmese-Chinese, said he had been given the money by his brother in Thailand.
Chen wondered if she could retrieve the windfall, and received the good news that she could get the money with interest, according to mainland website Sohu.
Counting in all factors including interest-rate changes and banking reforms, Chen was finally able to get back her father’s heritage – 2,684 yuan (US$407 at today’s exchange rate). After she expresse her gratitude to the bank, netizens mocked her for having failed to become a millionaire.
In the 1970s, blue-collar workers made about 20 yuan per month in the planned economy after the Great Leap Forward. With compound interest, an initial deposit of 1,200 yuan, which was equivalent to five years’ income, could have paid for two houses after growing by at least 50 times, if not more than 100 times, over the past few decades.
But unfortunately as a fixed deposit, it netted Chen only the equivalent of a blue-collar worker’s monthly salary.
This is perhaps why the Chinese feel much more comfortable handing over their life savings to property developers, not banks.
But if Chen regrets that she and her father missed the chance to own two houses, which might now be worth more than 10 million yuan, she could still have chance to be a “rich person” by considering the following opportunity.
Ahead of a national holiday and a traditional high season for property purchases, it is reported that many mainland developers are hiring part-time actors to pose as rich people and attract crowds into their sales offices.
Developers clearly understand that buyers tend to be more willing to open their wallets when they see people fighting for a limited number of available apartments.
It is similar to the logic that people will more easily fall victim to a poker scam on the street if they are emotionally affected by the surrounding “players”, who are actually accomplices of the scammers.
In Hong Kong, property developers may not dare to hire part-time actors to pretend to be potential buyers, as it is a criminal act. But in mainland China, fake buyers are everywhere, especially as the marketing costs are so minor compared with the property prices.
According to some mainland recruitment sites such as Baixing.com and Doumi.com, which put up ads for part-time help for developers, they are looking to hire dozens of people with a daily rate of 50 to 100 yuan, or 10 to 30 yuan per site with meals and transportation included.
They are willing to pay 80 yuan per hour to people aged between 39 and 48 who look wealthy and can brag about their luxury lifestyles. Each job may last about four hours.