Analysis of the DDFutures Investment Plans.
In our recent “First Thoughts” article about DDFutures, we had this to say about their investment plans:
DDFutures offers a total of EIGHT investment programs. All of them return your principal at the end of the investment term. Three of them pay you earnings on a daily basis while the remaining five pay all your earnings at the end of the investment term. At first glance, the thing that will hit you about these programs is that the minimum investment for almost all of them is very high for the online HYIP business. Only one investment plan has a minimum that is less than $5,000. I would be surprised that anyone would invest this much money online only knowing what is given about the company in the website. But, perhaps this might be sufficient for some investors.
Now, let’s take a detailed look at what these plans have to offer. Here is the website information on the first three investment plans that pay daily interest and return your principal at the end of the plan:
2.1% daily for 20 days
$10 – $50,000
2.5% daily for 35 days
$50,000 – $100,000
3.5% daily for 55 days
$100,000 – $200,000
As I indicated in the First Thoughts article, the minimum investments for most of the DDFutures investment plans are simply too high. Looking at Plans #2 or #3, a person would have to be CRAZY to invest $50,000 or $100,000 in one of these plans. I support the HYIP business. However, if a company expects a person to invest this kind of money with them, they owe it to the investor to provide verifiable information about their company and its performance as an investment vehicle. Registration with “Companies House” just doesn’t fill the bill. One can only conclude that this company is trying to catch a big fish and that, when the fish bites, he will most likely lose most — if not all — of his investment. We wrote an article about this type of investment program in HYIP Insights #14 that you can read if you would like more details. Of course, I hope that I’m wrong on this. However, given the track record of survival for HYIPs, the prognosis for survival of this program, if someone makes a deposit in one of these high minimum plans, is very poor.
You can look at the survival issue another way. Since these three investment plans return your principal at the end of the plan, assuming that the program survives till then, all of your earnings are pure profit. So, the interest that is paid is NET interest, daily net interest, or what we refer to as DNI. In HYIP Insights #12, we suggested that programs having investment plans with DNIs greater than 2% might have a poor chance of long-term survival. All three of these plans are in that category. Even if you say that Plan #1 is borderline, Plans #2 and #3 both have DNIs that are in the danger zone.
If, indeed, this program has been online for over a year, I suspect that no one has invested in Plans #2 or #3. By itself, Plan #1 MIGHT be sustainable. It is worth noting that, with a net profit of 2.1% per day, a person is earning a net weekly profit of around 15%. This is quite good.
There is another strike against Plan #1 (let’s forget about Plans #2 and #3 now!) which is that it won’t break even until the plan ends in 20 days. To calculate the breakeven point of an investment plan, you simply divide 100% by the daily percent return which, in this case is 2.1%. Doing the division, you come out with around 48 days (100/2.1). Since the plan is only 20 days long, you won’t break even until the plan ends — which is what I already indicated. In general, plans such as this where you have to wait until the plan ends to get your investment back are INFERIOR to plans that return your investment as part of your earnings. We discussed this in detail in the article in HYIP Insights #18.
Next, let’s take a look at the five investment plans that return BOTH your earnings AND your principal at the end of the plan. I hate to say it, but this is the WORST kind of investment plan as you don’t earn a penny until the end of the plan; it might be the most risky form of investing in the HYIP world. With this as an introduction, here is the website information for these five investment plans:
650% after 25 days
$70,000 – $700,000
1,500% after 45 days
$40,000 – $400,000
3,000% after 60 days
%20,000 – $200,000
6,500% after 90 days
$10,000 – $100,000
15,000% after 155 days
$5,000 – $50,000
Two things should strike you when you look at this list: the crazy minimum investments that are required and the crazy percents that are offered. We already discussed the high minimum investment requirements when dealing with Plans #1, #2, and #3. The same situation exists here and may even be worse. Plan #8 has the lowest minimum investment, and this is $5,000 which would probably still be out of the range of most online investors. Essentially, that would mean that ALL of these five programs are unusable. Plan #4 has the highest minimum investment which is a staggering $70,000.
Now, let’s take a look at the percent returns that these plans promise. Starting with Plan #4 (even though I am SURE that no one will use this plan), if we subtract 100% from the total gross return of 650%, we get a total net return of 550%. Dividing this by the 25-day length of the plan we get an average daily net interest (DNI) of 22%. Clearly, this is OFF THE CHART as we normally suggest that DNIs be kept below 2%! If you do the same arithmetic for all these plans, you get the following results for DNI of Plans #4 through #8:
Plan #4. 22%
Plan #5. 31%
Plan #6. 48%
Plan #7. 71%
Plan #8. 96%
You can see a pattern here which is that, as the length of the plan increases, so also does the DNI until, with Plan #8 having a term of 155 days, the DNI is an amazing 96%. This means that, effectively every day, you would earn back nearly 100% of your investment! Imagine that! If I invest the minimum of $5,000, then every day after that for 155 days, DDFutures will give me back nearly $5,000 (for a total which is over $750,000!). The hang-up, of course, is that this is the THEORETICAL daily net interest. In reality, you won’t see a penny of this until the plan ends. Your guess is as good as mine as to whether or not you will collect this return!
I hate to say it, but this program might offer the most obscene returns that I have ever heard of. DDFutures claims to have been online for over a year. The only way that might be possible is if investors use Plan #1 almost exclusively. The data that the company gives on the home page says it all. They indicate that the funds taken in are roughly twice as great as the funds that have been withdrawn. In Plan #8, DDFutures promises to pay an investor around 150 times his initial investment. Clearly that investment plan has never been used or the amount withdrawn would be MUCH MORE than the amount deposited. Again, probably the only investment plan that has ever been used is Plan #1. Thankfully, there is a chance that the program could survive if this is the case. So, a person must ask: “Why in the world does DDFutures offer Plans #2 through #8. The answer, unfortunately, is probably that they are just hoping to catch a big fish.
Nothing good can be said about this program. Even the one investment plan, Plan #1, with an almost sensible DNI, doesn’t break even until the plan ends after 20 days. It’s hard to believe that this program has been online for as long as it claims. If I were looking for a place to invest online, it would think TWICE before investing in DDFutures.
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