Analysis of the Ace-Corp Investment Plan.
In our recent “First Thoughts” article about Ace-Corp (that you can read here), we noted that the company has only one investment plan and that it is very simple to understand. Here’s what we said in that article:
All this aside, the HYIP investor is, of course, most interested in the investment plans that Ace-Corp offers. Well, there is only ONE plan and it is a very easy one to understand. It offers 3% interest daily for 20 days and then returns your investment at the end of the investment period. The lowest acceptable investment is $30 while the highest is $100,000. Let’s just call that “unlimited.” We will have more to say about this investment plan when we review the program in a day of two from not. It will be a short review as there really isn’t too much to talk about. Please stand by.
When analyzing an HYIP’s investment plans, there are two important quantities that we always determine: breakeven point and daily net interest (DNI). In case you’ve forgotten, DNI is the average daily profit that you receive over the duration of an investment plan’s term. It is a useful term as it “smooths out” high points and low points in daily profit and enables up to talk about a single quantity that can be used to compare one HYIP with another.
Concerning breakeven point, since the investment plan pays 3% interest per day, the total interest that you will receive by the end of the plan will be only 60% of your investment. So, you will not break even until your investment is returned to you at the end of the plan.
Concerning DNI, since your investment is returned to you at the end of the investment plan, the daily interest that you receive will be profit — assuming, of course, that the program survives until the end of the plan. This could be a big assumption (and we will talk about this further in the “Discussion” section of this Review). However, for now, let’s assume that the program does survive for the 20 days for which you have your funds invested. So, the 3% daily gross interest that is paid will also be daily net interest — DNI.
Concerning breakeven point, the most attractive type of investment plan would appear to be the one that pays a daily return such that you break even before the end of the term of the plan. The least attractive type would be the one that doesn’t pay any return at all until the end of the term of the plan. The Ace-Corp investment plan is somewhere in the middle. You do receive a significant daily return. However, it only amounts 60 percent of your investment. So, there will still be some nail-biting as the investor awaits the conclusion of the investment plan term at which time he will have his investment returned and he will finally break even.
Concerning DNI, in the article in HYIP Insights #12, we suggested that HYIPs offering investment plans having DNIs higher that 2% might be at risk concerning their chances for long-term survivability. In the case of Ace-Corp, the single investment plan that it offers has a DNI of 3%. This is quite high, and the investor should be concerned that the company might have trouble paying returns at this level for an extended period. The flip side of the coin is that this program is very profitable. Profit of 3% per day is equivalent to 21% profit per week. That’s a LOT. So, as usual, the classic HYIP dilemma presents itself: the possibility of high earnings but with correspondingly high risk.
You might recall that we just reviewed a program called Caribbean Dream. Coincidentally, the investment plan offered by that program is identical to the plan offered by Ace-Corp — except for the interest rate. Caribbean Dream only has a DNI of 1% which, according to the article in HYIP Insights #12 is at just about the right spot in-so-far-as long-term survivability of the program is concerned. However, Caribbean Dream is only one third as profitable as Ace-Corp (7% per week vs. 21% — a huge difference). So, we have two brand new programs — one that is three time more profitable that the other, and probably also three times riskier. So, you might say that Ace-Corp will appeal to the adventuresome investor while Caribbean Dream will appeal to the more conservative one.
Ace-Corp offers a single investment plan that pays 3% interest daily for a 20-day period and also returns your investment at the end of the plan. Ace-Corp has the potential of being a lucrative place to invest. However, the potential for risk and early closure of the program would appear to be higher than usual.
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