This program has STOPPED paying! Do not invest there!

The Kryptolect Investment Plans.

A few days ago, in our “First Thoughts” article about Kryptolect, we commented on the information given in the website about the company’s operations and also made a few preliminary observations about its investment plans.  In the way of an introduction, I will repeat what I said about the investment plans here:

Turning to the dollars and cents of this, Kryptolect offers two investment plans.  One of them pays earnings on an hourly basis while the other pay earnings daily.  Both return your deposit as part of your earnings.  The minimum investments required by the plans are reasonable, such that almost anyone should be able to take advantage of either of them and, at first glance, the interest rates that are promised appear to be high enough to be attractive to the investor while not being so high that they will be impossible for the company to sustain in the long term.

In our review of Kryptolect, which will available in a few days, we will take a closer look at these investment plans and try to determine exactly how profitable — and sustainable — they are.  Please stand by.

In the way of additional information, here’s the information on the investment plans as given in the Kryptolect website:

Daily Plan
4% daily for 40 days
Total gross interest = 160%
$25 minimum deposit

Hourly Plan
0.40% hourly for 325 hours
Total gross interest = 130%
$250 minimum deposit

Analysis of the Investment Plans.

In the way of a quick note, it really isn’t necessary for the website to give you the total gross interest because you can quickly calculate it yourself.  In the Daily Plan, you simply multiply the daily interest of 4% by the 40-day length of the plan to get the 160%.  In the Hourly Plan you multiply 0.4 by 325 to get the 130%.  Of more interest to the investor is the NET interest or profit paid by each of the plans.  You subtract 100% from the gross interest (since it includes your deposit) to get the net.  So, for the Daily Plan, your total net interest is 60% and, for the Hourly Plan, your total net interest is 30%.

But, as we know, this can be misleading too.  Is the Daily Plan really more profitable?  Well, the length of an investment plan is just as important as the amount of interest that is paid.  The DAILY NET INTEREST, or DNI, is what we need to determine since it includes both factors.  DNI is simply the total net interest averaged out over the length of the investment plan.  For the Daily Plan, we just divide the 60% total net interest by the 40-day length of the plan to get a DNI of 1.5%.  For the Hourly Plan, it’s a little bit trickier to determine DNI as everything is given in hours and DNI refers to days.  But, no problem.  We simply divide the 325-hour length of the plan by 24 hours/day to determine how many days long it is.  Doing the arithmetic, we find that the plan is around 13.54 days long.  Now we can get the DNI for the Hourly Plan by dividing the total net interest of 30% by the 13.54-day length of the plan.  The result is a DNI of around 2.22%.

It is also useful to see how long it takes each of these investment plans to break even.  You determine this by simply dividing 100% by the percent interest paid.  For the Daily Plan, you get around 25 days (100/4).  For the Hourly Plan, you get around 250 hours (100/.4).  In summary form:

DNI

Daily Plan.  1.50%
Hourly Plan.  2.22%

Days/Hours to Break Even

Daily Plan.  25 days
Hourly Plan.  250 hours

Discussion. 

Well, looking at the values for DNI, it should be clear that the most profitable investment plan is the Hourly Plan because your net profit per day is higher.  That’s where it’s all at — as the saying goes.  It doesn’t matter that the total gross interest for the Daily Plan is higher.

Looking at the breakeven points, for the Daily Plan, you break even after 25 days.  This means that during the last 15 days of the plan you are making “pure” profit.  With the Hourly Plan you break even after 250 hours.  This means that during the last 75 hours of the plan (around 3 days out of a total of 13.54 days) you are making “pure” profit.

The minimum investment of the less profitable Daily Plan is very low, only $25, while the Hourly Plan has a minimum of $250.  Note that there no maximums are given.  So, if you really like one plan more than the other, you can invest as much as you would like in it.  The minimum of $250 for the Hourly Plan should be doable for most serious online investors and, especially since the plan is much shorter term, it is likely to be attractive to all but investors who have a serious limitation on their working funds.

We always refer to HYIP Insights #12 where we made suggestions of values for DNI that might indicate whether a program is a good candidate for long-term survival or not.  Specifically, we indicated that programs with investment plans having DNIs higher than 2% might be in question.  Well, one of the Kryptolect plans has a DNI of 1.5% while the other has a DNI of 2.2%.  Although these values might be a tad on the high side, they certainly are not obscenely so.  I would say that, if the folks administering this program put their minds to it, there is a good possibility that, in spite of these values for DNI being “borderline,” the program could turn out to be a long-term survivor.

OK, as an example, let’s put a dollar value on all this and see how the programs compare.  Since the programs have no maximum investment limit, let’s assume that we invest $500 in each of them.  Furthermore, observing that if you multiply the length of the Hourly Plan, 13.54 days, by three, you come out to almost exactly 40 days, the length of the Daily Plan, let’s assume that we will keep our investment in the Hourly Plan for THREE cycles.  This will make the investment periods identical.  For the Daily Plan, the total net interest in the 40 day period is 60%.  For a $500 deposit this comes to a profit of $300 (.6 x 500).  For the Hourly Plan, the total net interest in the 13.54 – day period is 30%.  For our $500 deposit, this comes to $150 (.3 x 500).  But, to make the length of the Hourly Plan equal to the length of the Daily Plan, we will invest our $500 in this plan two more times to get a total of three times this or $450.  Clearly, the Hourly Plan is the winner.

Just to mess around with the numbers a little bit, you could have gotten these same results by using the DNIs for the two plans.  For the 40-day plan, you make a daily net interest (DNI) of 1.5%.  Multiplying your deposit of $500 by this you get a daily net profit of $7.50 (.015 x 500).  Multiplying this by the 40 days, you get $300 (7.5 x 40) which checks with our previous result.  The calculation for the Hourly Plan will work exactly the same way.  Multiplying $500 by the DNI of 2.22%, you get a daily net profit of $11.10 (.022 x 500).  Multiplying this by 40 days, you get a total profit of $444.  Considering that there was some rounding of when determining the 2.22% DNI, this agrees perfectly with our previous result of $450.  So, there are a number of different ways to do things.

For the very adventuresome investor, there is even another option.  Sticking with using the Hourly Plan, suppose that, instead of just reinvesting your $500, you reinvest the $500 PLUS your earnings after every 13.54 – day cycle.  It would work like this:

After cycle #1, $500 becomes $650.
After cycle #2, $650 becomes $845
After cycle #3, $845 becomes $1,098.50.  Call it $1,100

So, by using the Hourly Plan and compounding your earnings for three cycles to get a 40-day total investment period, you wind up with a profit of $600 (1,100 – 500).  Just using the Daily Plan for the 40-day period, your profit is only $300 — half as much.  This is the beauty of compounding.  However, compounding is a VERY risky business.  We discussed the pros and cons of compounding in great detail in HYIP Insights #11.

Conclusions.

The Kryptolect investment program offers two investment plans.  Both return your deposit as part of your earnings.  One plan pays interest on a daily basis and runs for 40 days.  The other pays interest on an hourly basis and runs for around 13.54 days (one third of 40 days).  The interest paid by the Hourly Plan is slightly on the high side which may be compensated for by the fact that the interest paid by the Hourly Plan is reasonable.  Survivability of the overall program is the most important consideration.  The minimum investments of both plans are reasonable with the higher of the two, for the Hourly Plan, only being $250.  The Hourly Plan is the more profitable of the two plans.  The bottom line is probably that, if an investor can afford the $250 minimum investment, the Hourly Plan is the better choice.

I hope that this information is helpful.

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