This program has STOPPED paying! Do not invest there!

Analysis of the Solis Investment Plans.

In Part 1 of this review, I tried to lay out all the characteristics of the Solis investment plans.  It would be helpful if you had that information in front of you when you go over what follows.  In light of what we discovered in Part 1, you might even have suspected that it will be very difficult — or at least very impractical — to do a precise analysis of the investment plans.  It turns out that this is, indeed, the case.  However, we will surely be able to make some useful approximations that should be helpful.  Let’s begin.

First of all, the investor might be overwhelmed by the number of investment plans that Solis offers.  Fifteen is quite a lot!  Simply stated, the rule to follow is that you should put your money where you will earn the most interest.  As an example, suppose that you have $3,000 that you would like to invest.  With all these investment plans, there are a number of ways to go.  Here are some of them:

Plan #8:  Buy six $500 packs and earn 24%/month

Plan #9:  Buy three $1,000 packs and earn 25%/month

Plan #10:  Buy one $2,500 pack and earn 26%/month PLUS use Plan #8 to buy one $500 pack and earn 24%/month

The third option is best.  Again, always aim at the highest interest investment plan.  One wonders why the Solis includes so many lower paying possibilities.  Are they trying to trick their investors?  Usually, in HYIP investment plans, one plan picks up where a previous one leaves off.  So, you don’t have to wrestle with this problem.

Well, if you thought this was complicated, wait till you see what we tackle next!  Let’s see how this 70/30 split of earnings works out with respect to the part of it you can withdraw and the part of it you must reinvest.  To get a feel for this, like the above example, let’s look at a specific case.  Suppose that you invest $250, the minimum amount for Plan #7.  To keep things simple, I’m only going to look at what happens assuming that interest is paid on a monthly basis.  (I realize that, in actuality, things would be a somewhat different because interest is paid in smaller amounts on working days.  However, the concept will be the same).  Plan #7 pays 23% interest after one month.  So, the total earnings for the month would be $57.50 (.23 x 250).  70% of this, or $40.25, goes into your Earnings Balance that you can withdraw and 30% of this, or $17.25, goes into your Purchase Balance that you must reinvest.  So, let’s assume that in the second month we buy 17 of the $1 packs of Plan #1.  At the end of the second month, you would again earn 57.50 in earnings on your $250 deposit (which would again be split 70/30).  You would also earn 17% of your $17 investment in Plan #1 (it is a coincidence that both numbers happen to be “17”).  This interest would be $2.89 (.17 x 17).  You can withdraw 70% of this, or $2.03, and 30% of this, or $0.87, must be reinvested.  Note that this is below the minimum investment of $1.  However, you might be able to squeeze a $1 investment out of this as you had $0.50 left over in your Purchase Balance after you purchased the 17 packs of Plan #1.  But, we are talking about pennies here.  So, a third level of investment is a probably a waste of time to consider in our analysis.  I believe that earnings from this level would always be insignificant compared to earnings from your base investment.

Can you see what is happening?  Every month, 30% of your earnings will be placed in your Purchase Balance.  If you invest it, you will earn around $2 per month.  And, every month you will earn an additional $2 on the NEW interest generated by your original deposit of $250.  So, as the month go by, your earnings would appear as follows:   

First month:  $40.25 (let’s round that off to $40 from now on)
Second month:  $40 + $2
Third month:  $40 + $2 + $2
Fourth month:  $40 + $2 + $2 + $2 (I think that you can see the trend now)
Fifth month:  $48
Sixth month:  $50
Seventh month:  $52
Eighth month:  $54
Ninth month:  $56
Tenth month:  $58
Eleventh month:   $60
Twelfth month:  $62

Now you can see the effect of compounding.  After a year, you are earning around 25% (62/250) per month of your original investment.  These are earnings that you KEEP; these are not split between your Earnings Balance and your Purchase Balance.  We already accounted for that.

Returning to your original investment, recall that your deposit was in Plan #7 that has a nominal interest rate of 23% per month.  However, you only had access to 70% of that or around 16% (.7 x 23) per month.  So, in the course of a year’s time, your “take-home” interest increased from around 16% to around 25% per year.  This increase is due to compounding and it’s very significant.  It’s around a 50% increase!

The question still remains as to what interest rate should be used when analyzing the Solis investment plans to predict their profitability.  There are two complicating factors.  The programs are “perpetual” and we don’t know how long the program will survive.  Also, there is compounding going on which changes the interest earned every day.

Given all this, the best we can do is to make an educated GUESSTIMATE as to how things will work out.  So, just so that we have some CONVENIENT numbers to work with, I am going to assume that the nominal interest rates given by Solis BEFORE deducting the 30 % that is retained for reinvestment will correspond to actual earnings in the long run.  Our example above showed that actual earnings of 25% occurred in roughly a year when the nominal interest rate given by Solis was 23%.  So, we might be in the general ballpark assuming that the program survives for a year or so.  Of course, we would like to think it will survive longer.  Then, these interest rates will be too low.  The flip side of the coin is that, the higher the interest rates go, the more difficulty Solis will have paying them.

So, we will use the first table given in Part 1 of the review for the gross interest rates paid by the program.  I’m repeating it again here:

Plan #    Min Investment    Profit/Month

1                     $1                              17%
2                    $5                              18%
3                    $10                            19%
4                    $25                            20%
5                    $50                            21%
6                    $100                          22%
7                    $250                          23%
8                    $500                          24%
9                    $100                           25%
10                  $2,500                       26%
11                   $5,000                       27%
12                  $10,000                     28%
13                   $25,000                     29%
14                   $50,000                     30%
15                   $100,000                    31%

OK, when speaking of the profitability of an investment plan, we always refer to the daily net interest (DNI) of the plan.  DNI is simply the total net interest averaged over the length of the plan.  We need two pieces of information to compute DNI: interest rate and length of plan.  As I already indicated, we will use the interest rates in the table above.  For lack of anything else, let’s assume that the program has life span of one year.  Obviously, both investors and the folks at Solis will hope for a much longer life than this.  Those are our wishes as well.  So, in advance, I will note, that, if the program survives longer than a year these results will change radically for TWO reasons: compounding will increase the interest rate paid and the longer time period will increase the profits made.

As an example, let’s calculate the DNI for Plan #1 using these assumptions.  For a gross interest of 17% per month, the total gross interest in one year will be 204%.  Subtracting 100% because this includes your deposit, we get a total net interest of 104%.  Finally, dividing this by the number of CALENDAR days in a year, we get a DNI of 0.28%.  Making the same calculation for all the Solis investment plans, we come up with the following:

Plan #    Gross Interest  %    DNI %

1                       17                    0.28
2                       18                    0.32
3                       19                    0.35
4                       20                    0.38
5                       21                    0.42
6                       22                    0.45
7                       23                    0.48
8                       24                    0.52
9                       25                    0.55
10                      26                    0.58
11                      27                    0.61
12                      28                    0.65
13                      29                    0.68
14                      30                    0.71
15                      31                    0.75

Referring back to the article in HYIP Insights #12, we suggested that programs offering investment plans having DNIs less that 1% might have a high probability of long term survival.  The Solis investment plans are all within this range which is a very hopeful sign.  According to the website, Solis has been around for over seven months — which is no small accomplishment for an online investment program.  So, it appears that there might be some good thinking behind these investment plans.

In closing, all of the foregoing is an attempt to put numbers on the Solis investment plans.  In very general terms, our results suggest that, at least for the first year or so of operation, the company has a very good chance of survival.  This, of course, is the most important thing in the mind of the typical HYIP investor.  After a year or so, as interest paid to investors continues to compound, Solis will slowly experience a heavier and heavier burden of obligation to pay earnings to its investors.  And, there will be no relief from this as the investment plans are “perpetual.”  So, it is a good thing that Solis has begun its investment programs with very modest interest rates.

One final thing we haven’t discussed is the length of time it will take you to break even with the Solis investment plans.  In order to do this, we again need interest rates upon which to base our predictions.  The last table that I gave is the result of considering the effects of compounding over a one-year period.  Since the investment plans should break even much more quickly than that, we should use lesser rates.  A safe rate to use would be 70% of those in the first table given in Part 1 of this review.  This table was repeated in this Part of the review as well.  For example, for Plan #1, we would use 70% of the 17% as total gross interest that you receive as the dollars that you put into your pocket every month.  For this plan it comes out to around 12%.  For an HYIP, this is very low.  Dividing 100% by this amount, you find that it would take around eight months to break even.  Quite a long time.  As a second example, let’s take a look at Plan #7 which we studied earlier in this article.  Taking 70% of the published 23% return, you get around 16%.  Dividing 100% by this amount, you find that it would take around six months to break even.  This is an improvement over the result we got for Plan #1.  However, in the HYIP business it is still a long time.  In reality, you would break even sooner than these predicted amounts as they did NOT take into consideration the effects of compounding — which would surely be kicking in after six months or so.  However, we have done more than enough arithmetic in this review!  So, these numbers will have to suffice for now.

Perhaps you might be interested in investing with Solis.  They are doing quite well so far and our analysis above suggests that, while they might not survive forever, they should be able to stay in the business for a decent length of time.  As always, if you do invest with Solis, we recommend that you diversify your portfolio by investing in a number of additional programs.  And, of course, never invest more than you can afford to lose.  Good Luck!

P.S.  As I write this review, I notice that Solis has just added a cryptocurrency investment program to their line-up of investment opportunities.  We’ll take a look at them in Part 3 of this review!


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