This program has STOPPED paying! Do not invest there!
A few days ago, we introduced Currency Global with our “First Thoughts” article. In the article, we presented an overview of the company as well as a very brief introduction to its investment plan offerings. What I’d like to do in this review is to dig a little deeper in an effort to shed more light on the pros and cons of these investment plans.
But first, I’d like to remind you of a new procedure that we are implementing with respect to the HYIP review articles that you will find in the EmilyNews blog from now on. You might recall that in HYIP Insights #16, we published an article entitled “The Two Most Important Things.” In the article we elaborated on the idea that, for all practical purposes, the two things that an investor would most like to know about an HYIP are:
- background information about the company and
- information about the investment plans the company offers
Everything else is secondary to this. For example, if you decide to invest in the stock market, you would like to have the same two pieces of information. You would want to be as sure as possible that the company you are investing with is going to survive (and grow!) and you would want to be sure that the dividend plan offered by the company is consistent with your needs and expectations. So, in our First Thoughts and review articles, this is the information that we will attempt to provide. As was the case in our First Thoughts article on Currency Global, we will share as much information as we have about the company with you. Then we will provide a thumbnail sketch of the company’s investment plan offerings. When we review the program, we will present a detailed analysis of the investment plans — which is what I will do now for Currency Global.
The major weakness I can see to this approach is that typically HYIP companies don’t really tell very much about themselves. Perhaps this is simply because, in most cases, there isn’t really too much to tell! Always remember that the HYIP business is truly a game (please see HYIP Insights #4 for our feelings about this) and that the information that you read on a website about a company is what we call its “Legend” (Please see HYIP Insights #6 for more information about this). We HOPE that this Legend is true but realize that the fact of the matter is that 95% of all HYIPs will fade into the sunset in less than a year. So, we are really gambling that we will come out ahead — ideally WAY ahead — before this happens. But, in spite of this, oftentimes a company’s Legend will provide valuable insights into the prognosis for a program’s long term survival.
And, this, of course, is where it’s all at! We would like to know what the chances are of an HYIP surviving in the long term. How can you determine this? You do your best to learn something about the “company” by studying its Legend and you examine its investment plans to determine if they are set up in a way that is conducive to long term survival. THIS IS THE INFORMATION THAT WE AT EMILYNEWS TRY TO BRING TO YOU IN OUR “FIRST THOUGHTS” ARTICLES AND IN OUR REVIEWS.
With this as a very LONG introduction, let’s get to work on the Currency Global’s investment plans…
As we indicated in the First Thoughts article, Currency Global offers four investment plans. All of them are “perpetual” and pay you earnings on a daily basis. “Perpetual” is the term we use to describe an investment plan that provides earnings until the program ultimately closes its doors.
Here are the interest rates and investment limits for the four Currency-Global investment plans as given in the website:
$10 – $999
$1,000 – $4,499
$4,500 – $9,999
$10,000 – $200,000
Break Even Points.
With this as background, we can get to work. The first thing you might want to know is how long it will take each of these plans to break even. This is extremely easy to determine. You simply divide 100% by the percent of your investment that is returned to you every day. For example, in the Start plan, we divide 100% by 2% to get 50 days to break even. If you do the same thing for the other three investment plans, you get the following:
Days to Break Even
Start plan. 50 days
Basic plan. 40 days
Premium plan. 34 days
VIP plan. 29 days
So, all the investment plans will break even in less than two months. The VIP plan, paying 3.5% gross interest, will break even in one! After that, all of your earnings are pure profit FOREVER! This is the appeal of “perpetual” investment plans such as these. The downside is that, although you EARN forever, the company must PAY forever. As more and more people sign up for such a program, the greater this burden becomes on a company.
OK, but just how profitable are these investment plans? Here’s where things get really tricky. Since you don’t know when the program will close, you don’t know how much money you will make. So, you can’t determine profitability. The best you can do is ASSUME a lifetime for the program and base your arithmetic on that. This is what we’ll do. But, we’ll do it for a number of DIFFERENT scenarios so that you will be able to see how profitability will increase as the lifetime of the program increases.
As a starting point, let’s assume that the program at least lasts for 60 days — so that even the folks in the Start plan (that breaks even in 50 days) will come out a little bit ahead of the game. To determine profitability, we determine the DNI (daily net interest) for an investment plan. This is the total net interest (profit) averaged out over the length of the investment plan. For the Start plan, earning 2% gross interest per day, your total GROSS earnings in 60 days will be 120% (2 x 60). If you subtract 100% from this, you will get your total NET earnings in that time period which is 20%. Averaging this out over the assumed 60-day investment period, you get a DNI of 0.33% (20/60). If you do the same arithmetic for the other three investment plans, you will get the following DNIs for them for this same investment period.
DNIs for 60 Day Assumed Life of Program
Start plan. 0.33%
Basic plan. 0.83%
Premium plan. 1.33%
VIP plan. 1.83%
Looking at these numbers, you can see that, even if the program only survives for 60 days, folks in the VIP plan will have received an average profit of close to 2% per day — which is pretty good.
Now, let’s see how things would look if the program survives for 90 days. Like before, for the Start plan, you would multiply the daily gross interest of 2% by 90 days to get a total gross return of 180%. Subtracting 100% from this, you get a total net return of 80%. Finally, dividing this by 90 days, you get a DNI of 0.89%. Again, like for the 60-day assumed life of the program, if we repeat this arithmetic for the other three plans, we get the following results:
DNIs for 90 Day Assumed Life of Program
Start plan. 0.89%
Basic plan. 1.39%
Premium plan. 1.89%
VIP plan. 2.39%
If we did all this for an assumed life of the program for 180 days (half a year) and also for 360 days (a full year), you would get the following:
DNIs for Different Assumed Lives of Program
60 days 90 days 180 days 360 days
Start plan 0.33 0.89 1.44 1.72
Basic plan 0.83 1.39 1.94 2.22
Premium plan 1.33 1.89 2.44 2.72
VIP plan 1.83 2.39 2.94 3.22
Can you see what is happening here? The longer the program survives, the more the DNI for each plan approaches the “advertised” gross interest rate for the plan. Obviously, the DNI (profit!) can never get greater than this.
OK, we have a lot of numbers here. Let’s take a closer look at them now.
In HYIP Insights #12, we suggested that programs having investment plans with DNIs higher than 2% might not be good candidates for long-term survival. On the other hand, we suggested that programs having plans with DNIs less than 1% might be good ones. For DNIs between 1% and 2% there is a gray area — a transition area — where things could go either way. And, of course, this is only our OPINION. We believe that it is in the right ballpark — a good starting point. But, especially in the HYIP industry, anything can happen. However, at least these limits represent reasonable starting points for discussion.
Looking at the table above, it is easy to see that, the longer a program survives, the higher the DNIs become. Since they gradually approach the “advertised” gross interest rates that can be as high as 3.5%, it should be clear that, the longer the program stays alive, the greater the burden on it will become for paying earnings to its program members. This is complicated by the fact that they have to be paid forever. In the typical HYIP, an investment plan will end and the program will get relief from paying earnings to the member of the plan. Then the member will have to invest AGAIN to continue to receive earnings. So, two things are working against the survivability of this program:
- Relatively high interest rates
- Perpetual payments
But there IS something that might save the day! Perhaps fortunately, the minimum investment required in order for a person to invest in the VIP plan is a staggering $10,000 and the minimum for the Premium plan is a very high — if not also staggering — $4,500. We at EmilyNews always advise AGAINST investing in ANY online program at these levels (unless, of course, you are one of the fortunate few that have “money to burn”). Perhaps there will come a time when online HYIPs provide enough information about themselves that can be clearly substantiated such that a person would have the confidence to invest at these levels. I don’t think that time is here yet. So, it is probable that very few, if any, people will invest in these two plans. If you eliminate them from the forgoing chart, you can see that the DNIs for the remaining two investment plans remain below 2% for almost a full year. So, from the point of view of DNI, it might indeed be possible for Currency Global to survive for a year or so. Unfortunately, remaining is still the problem of the ever-increasing number of members in the program to whom earnings must be paid — forever. This could, indeed, be the limiting factor in the survivability of this program.
Currency Global offers four “perpetual” investment plans. The gross interest paid to the two highest interest programs would appear to be unsustainable. Fortunately, the minimum investments for these plans make it improbable (and inadvisable) that they will be used. So, from the point of view of interest paid, the program might survive if the first two investment plans are used almost exclusively. Unfortunately, the plans are “perpetual.” While this is attractive to the investor on a short-term basis, it places a huge burden on the company in the long term such that long-term survivability of the program will be jeopardized.
In spite of all this, it is important to note that the breakeven times for even the two lowest interest investment plans are less that two months. So, even if the program isn’t a long-term survivor, it would still appear to be possible to make a significant profit in a relatively short period of, say, four to six months. Of course, longer would be better.
I hope this information is helpful to you in deciding whether or not to invest in this program. Good Luck!
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