Introduction.

In our “First Thoughts” article about Private Club, we provided the following brief introduction to the company’s investment plans:

Private Club offers five investment plans, all of which are 30 days long and all of which return your deposit as part of your earnings.   The first three plans pay interest daily, the amount of interest depending on the amount of your deposit.  The second two plans pay you all of your earnings at the end of the plan.  Remember that your earnings in ALL of the investment plans include your deposit.  So, to repeat, in the first three plans, you receive earnings on a daily basis while, in the second two, you receive your earnings at the conclusion of the plan.  This would appear to make the last two investment plans riskier than the first three.  This is correct.  But, if my quick mental calculations are correct, Private Club offers higher interest rates for the second two plans as a “carrot” to entice the investor to put their money into them.  So, at first glance, these investment plans appear to be very well thought out.  We’ll take a close look at them when we review the program which should be within the next day of two.  Please stand by…

Now let’s do that “closer look” I was talking about…

Here’s what the website has to say about the five Private Club investment plans.  Remember that all of the plans are 30 days long and that all of them return your investment as part of your earnings.

Plan I
4.0% daily
\$10 – \$499

Plan II
4.5% daily
\$500 – \$1,999

Plan III
5.0% daily
\$2,000 – \$50,000

Plan IV
180% after 30 days
\$1,000 – \$9,999

Plan V
200% after 30 days
\$10,000 – \$50,000

Analysis of the Private Club Investment Plans.

OK, now that we know what the investment plans look like, let’s determine the two pieces of information that will enable us to make a final decision concerning how good the plans are.  These are breakeven point and daily net interest rate (DNI).

It’s simple to determine the break even point of an investment plan.  You simply divide 100% by the daily gross interest that is returned to you.  For example, In Plan I, you divide 100% by 4 to get 25 days.  If you do the same calculation for Plans II and III, you get the following results:

Plan I     25 days
Plan II     23 days
Plan III     20 days

Since you don’t receive any return at all in Plans IV and V until the 30-day period is up, they don’t break even until the full 30-day term of the plan is over.

Next, let’s determine the daily net interest that each of the plans provide.  For Plan I, you determine the total GROSS interest that you will earn in the 30-day period by multiplying the 4% daily gross interest by 30 days to get 120%.  Subtracting 100% from this to account for the fact that this includes your investment, you get 20% as the total NET interest.  Finally, dividing this by the 30-day period, you get an effective daily net interest (DNI) of 0.67%.  Doing the same arithmetic for Plans II and III, you get the following values for DNI for the three of them:

Plan I     0.67%
Plan II     1.17%
Plan III     1.67%

For Plan IV, the total gross interest you receive is the 180%.  The total net interest is 100% less than this or 80%.  Finally, averaging this out over the 30-day period, you get a DNI of 2.67%.  Doing the same arithmetic for Plan V, you get a DNI of 3.33%.  repeating all these findings in one place, we have:

Plan     Days to break even                DNI

Plan I               25                                0.67%
Plan II              23                                1.17%
Plan III             20                                1.67%
Plan IV             30                                2.67%
Plan V              30                                3.33%

In our Article in HYIP Insights #21 entitled “A Safe Investment Guide,” we listed four factors that we felt are the characteristics of investment plans that would make an HYIP a good candidate as a place to invest your hard-earned money.  These characteristics are quite stringent and very few HYIPs can fulfill them.  Let’s see how Private Club fares…

The first characteristic is that your investment should be returned to you as part of your earnings on a daily basis.  The idea is that you begin to recover your investment immediately rather than risk losing it if it is only returned to you at the end of an investment plan.  Well, the first three plans do this; the third and fourth do not.

The second characteristic you should be looking for are plans that break even in 30 days or less.  All the plans do this with the first three breaking even in considerably less time.

Third, you should be looking for programs having investment plans with DNIs of less than 2%.  Here again, the first three plans shine while the last two have DNIs considerably higher than this.

Finally, we suggest investing in a program as soon as you can after it goes online — in a week or so, if possible.  Private Club has been online for around a month.  This isn’t too bad, especially since the investment plans are only one month long.  But, it would be nice to have become aware of this program sooner.

Discussion.

All in all, Private Chub looks very good.  Plans I, II, and III would seem to be the best plans to get involved with.  They break even more quickly than the last two plans and you recover your investment on a daily basis.  We didn’t mention it above but Plans IV and V have high minimum investments that might be a deterrent to investing with them.  Plan III is also high too.  This is actually an ADVANTAGE for the survival of the overall program as these three plans all offer the highest interest returns.  The high minimum investment will minimize the number of investors in these programs and this will decrease the obligation of the company for paying high interest returns — which will improve its chances for long term survival.  The bottom line is that Plans I and II will probably be the most popular investment plans.  They will provide the investor a decent return while not jeopardizing the chances of long term survival for the program.

Conclusion.

Private Club offers a well-thought-out array of five investment plans.  The first three that provide daily interest offer conservative interest rates and return your principal on a daily basis as part of your earnings.  The last two hold your principal until the end of the investment term but offer higher interest rates — perhaps as a carrot to entice investors to utilize them.  It is the typical HYIP dilemma — higher profits coming with greater risk.  Because of the high investments required in all but the first two plans, these first two will probably be the most popular.  It turns out that this is also good for the survival of the overall program.

I hope this information is helpful.  Good Luck!

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