In our “First Thoughts” article about Renaissance Invest (that you can read here), we noted that “the company appears to be new, its incorporation papers indicating that it registered this past June. According to the website they are an investment company that invests in the cutting-edge aspects of industry, robotics, medicine, and even tourism. There is a very informative introductory video to the company on the website that you can conveniently access by clicking on the video screen icon in the program listing in the Emily News monitor.”
We also noted that Renaissance Invest (RI for short) offers three investment plans and that, at first glance, they might be a bit hard to understand (at least they were for me!). So, the first thing we’ll do in this review is to try to understand what they are all about.
Here is the information on the investment plans exactly as given in the RI website. It appears to be straight forward; but, there is more than meets the eye if you are to understand the plans completely…
Duration: 180 days
Minimum Amount: $10
Rate: 1.60 %
Principal Back: Any Time
Duration: 180 days
Minimum Amount: $100
Rate: 1.80 %
Principal Back: Any Time
Duration: 180 days
Minimum Amount: $1,000
Rate: 2.00 %
Principal Back: Any Time
The first curve ball is that, although the investment plans are all 180 days long, you are not paid interest on weekends or holidays. Weekends are clear. In order to find out the holidays are, you have to log into your account and click the “information” tab to see a list of them. It turns out there are 11. OK, let’s try to figure out how many days a person will receive interest earnings in the 180 days period. This is around six months. On the average, there are 22 working days per month. For six months, this would come to 132 days. But, there is, on the average, roughly one holiday per month. So, for a six month investment plan, we have to subtract another six days from our estimate of the number of days that a person will receive interest. That brings the total number of interest paying days down to 126. RI has a calculator that predicts earnings. Let’s see if their result will check with what we will get if we use our number of interest paying days…
Let’s start with the minimum deposit of $10 in the Starter Plus investment plan. This plan pays 1.6% per day. For the 126 days that we calculated, this would come to a total of 201.6% (1.6 x 126). Applying this to our $10 investment, we come up with a total net return of $20.16 (2.016 x 10). Since your principal is returned at the end of the plan, the total you will receive after your deposit is returned will be $30.16. The calculator predicts a total return of $30.64, giving a discrepancy between the two numbers of $0.48. Let’s see if we can figure out why the two numbers don’t agree. For 1.6% interest, a $10 deposit will earn you a daily return of $0.16 (.016 x 10). It is easy to see that the $0.48 discrepancy is three times this. So, RI used 129 days rather than 126 days to calculate the return from the investment.
Next, let’s take a look at a minimum deposit of $100 in the Regular Plus plan. This plan pays 1.8% per day. We’ll use 129 days to make our calculation. It should check with what the calculator predicts. The total interest for the 129 days will be 232.2% (129 x 1.8). This gives total net earnings of $232.20 (2.322 x 100). Adding $100 to this to get the total gross return, you wind up with $332.20 which is exactly what the calculator predicts.
All of this sounds quite simple here. However, I had to scratch my head for quite a while to sort through all this. I used the RI online chat feature to get help with this and the person that was at the chat desk was exceptionally knowledgeable and helpful. This isn’t always the case with chat services. RI deserves a gold star in this department.
Finally, let’s take a look at what will happen with a minimum deposit of $1,000 in the Advanced Plus plan. At 2% interest per day, again using 129 days, the total interest earnings will be 258% (129 x 2). This will result in total net earnings of $2,580 (2.58 x 1,000). Adding the deposit of $1,000, we get a total return of $3,580 which again agrees exactly with the calculator prediction. So, for what it’s worth, we are now sure that RI uses an investment period of 129 days when calculating earnings. Of course, this is an estimate as at one time of the year there will be more holidays than another. I would say that it is a high estimate as we came up with 126 rather than 129 days. All this said, we are now splitting hairs and should probably focus on the big picture rather than details like this. But, it’s nice to understand where a HYIP gets its numbers from. Hopefully, that is now absolutely clear to you.
There is something else that is a bit tricky about these investment plans. The listing above states that your principal can be returned at any time. While this is true, if you request it before the end of the investment term, there are severe penalties, so severe that you probably would never exercise this option. The penalty depends on how many days have elapsed in the investment plan term. It’s a bit involved but is spelled out in detail in the “information” tab of your account. Here is the statement from the account page explaining this:
Conditions for early withdrawal of the principal:
You can back your principal anytime you wish.
– earlier withdrawal of the principal to 15 days is not possible
– in case you want to get your money back from 15 to 91 days of the Investment Plan basic validity period the proﬁt is made on “Available balance” as the following: the principal minus 50% of made proﬁt during the pointed period.
– in case you want to get your money back after 91 days of the Investment Plan basic validity period the proﬁt is made on “Available balance” as the principal minus ﬁxed penalty in accordance with the following:
– 91 – 100 day is 90% penalty of the principal;
– 101 – 110 day 80% penalty of the principal;
– 111 – 120 day 70% penalty of the principal;
– 121 – 130 day 60% penalty of the principal;
– 131 – 140 day 50% penalty of the principal;
– 141 – 150 day 40% penalty of the principal;
– 151 – 160 day 30% penalty of the principal;
– 161 – 170 day 20% penalty of the principal.
– 171 – 180 day 10% penalty of the principal.
After Investment Plan validity period expiring you get your principal back entirely.
Looking at this breakdown, it’s clear to me that, in the first 15 days of the plan, withdrawal of the principal is impossible. Also, in the last half of the plan, it’s clear that starting at day 91, you forfeit 90% of your principal and gradually the percent you forfeit decreases the further you are along in the plan until, after the full 180 days, your entire principal will be returned. I’m not quite sure what happens between day 15 and day 90. I suspect that it has to be WORSE than losing 90% of your principal. So, there isn’t really much sense in withdrawing at that time. Hence, I’ll not waste time trying to figure out the language of the statement applying to withdrawal in that time period of the investment term.
There is one more item to understand about these investment plans. This is the time to break even. Fortunately, this is easy to compute. Your simply divide 100% by the daily percent paid by the plan. For example, for the Starter Plus plan, we divide 100% by 1.6% to get around 63 days. However, these are working days. Assuming there are 22 working days per month, this is equivalent to 2.86 months (63/22). Finally, assuming there are 30 calendar days per month, this is equivalent to around 86 calendar days (2.86 x 30). This is a close estimate that does not include the effect that holidays might have on this. As you might remember, RI doesn’t pay interest on weekends AND holidays. You can do the same calculation for the other two investment plans to get the following results:
Starter Plan — 86 days
Regular Plan — 77 days
Advanced Plan — 69 days
All of this is preliminary information as to how the RI investment plans work. Now, we are in a position to take a look at the profitability of the investment plans. That’s what we’ll do in Part 2 of this review which will follow in the next day or two.
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