Discussion of the Snowbit Investment Plans.

In the first part of this review, we worked out values for DNI for the first three parts of the Snowbit investment plan assuming a number of different lengths of survival time for the program.  Here is what we came up with:

DNI for Different Program Lengths

30 days                 60 days                 90 day                   120 days

Part #1                  —–                        —–                        0.39%                    0.67%
Part #2                  0.17%                    1.83%                    2.39%                    2.67%
Part #3                  2.17%                    3.83%                    4.39%                    4.47%

We also determined the following breakeven points for these three parts of the investment plan:

Part #1.  67 days
Part #2.  29 days
Part #3.  19 days

In order to complete the picture, here is the basic website information about these three parts of the Snowbit investment plan.

Part #1.  $8 – $240.     1.50% daily gross interest
Part #2.  $240 – $1,200.     3.50% daily gross interest
Part #3.  $1,200 – $2,400.     5.50% daily gross interest

 

OK, with all this information in front of us, we are ready to go…

Perhaps the most important factor that we should be looking at is DNI as it is the best indicator of a program’s profitability and survivability.  This should make sense, I guess.  If you make a lot of money from a project, the implication is that it probably is a more risky one.  If you only make a little, the implication is that the project will probably be more stable and will be more likely to survive in the long term.  Only rarely would a high interest project be a long-term survivor.  The reason is simply that the company behind the project will have more trouble sustaining high interest payments than low interest ones.  This is very simple and clear logic.

Well, what is “high” interest and what is “low” interest?  This is a matter of opinion, of course.  In HYIP Insights #12, a FOUR PART article, we went into great detail about this.  In fact, I believe that this was the article in which we introduced the term, DNI, as a measure of the profitability and survivability of an HYIP.  Our suggestion (opinion) in this article was that programs offering investment plans with DNIs that are less than 1% will have a high chance of long term survival whereas programs offering investment plans with DNIs greater than 2% might have a slim chance.  DNIs between 1% and 2% are a sort of transition area and programs having investment plans with DNIs in this range could go either way.  I emphasize that all this is our OPINION and there will certainly be cases where we will be wrong.  However, it is always good to have a rough guide to refer to when making an investment decision.  The purpose of these suggestions is to provide such a guide.

With this as background, if you look at the values for DNI for the three parts of the Snowbit investment plan that we are considering, you will see that there are some difficult decisions that the investor will have to make.  Part #1 of the plan has low DNIs that suggest long term survivability of the program.  In fact, after a year or so, the DNI for this part of the plan will peak out at 1.5% which is perfect for survivability.  However, we already have questioned this part of the plan because it doesn’t break even till over two months.  This could be a problem because Parts #2 and #3 also have to be factored into the mix.

The DNI for Part #2 starts out at the top of our range of acceptability and, after only three months, is in the danger zone.  The DNI for Part #3 is in the danger zone after only one month.  A very important fact is that a program will sink or swim as a unit.  The various parts of the investment plan do not die one at a time.  The entire program will die.  So, you have to look at the combined effect of these parts of the program in order to make an assessment of its survivability.

A factor that favors the survivability of Snowbit and programs like it is that most investors will chose the low interest part of the investment plan because of the low deposit that is required.  If ALL investors choose this part of the plan, the program could be a very stable one.  However, Part #2 of the plan, with only a minimum investment of around $240, will surely get some takers.  The more people that opt for this part of the plan, the greater the chances are that the overall program won’t survive.  The situation gets even worse if there are a significant number of investors in Part #3 of the plan.  With a minimum investment of around $1,200 there will not be too many.  But, I suspect that there will be some.  These investors can make a good return if the program survives for only two months or so.  But, the obligation of the company to pay high returns to these investors will hurt the overall program.

Conclusion.

A disadvantage of ANY “perpetual” investment plan is that things get worse and worse for the survivability of the overall program as time goes on.  This is very different from a conventional investment plan wherein the program gets a breath of fresh air every time the term of an investor’s investment plan is up and he must REINVEST and put NEW money at risk in order to possibly make a profit again.  In short, the idea of “perpetual” earnings is very appealing to the investor.  However, it is also risky as the cards are stacked against the survivability of this type of program.  This is the case with Snowbit.  It could be a very lucrative program, especially the last five parts of its investment plan.  However, the risk is very great.  This is always the situation with the HYIP “Game.”  However, it seems that programs such as this exacerbate the risks involved.

I hope that this information has been helpful.

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