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Analysis of the LuxEarn Investment Plans.
In Part 1 of the review, the main thing we accomplished was to gain an understanding of how the LuxEarn investment plans work. We also found out that 25 of the 30 plans have minimum investments that are probably beyond the reach of almost all HYIP investors. In fact, we even discouraged people from investing in them as investing large sums of money in ANY online investment program is probably not a good idea. So there were only FIVE investment plans that we planned to analyze.
There is something else about the investment plans that I didn’t notice until now. I should have pointed this out in Part 1 of the review. However, better late than never. If you look at the 5% daily plan in the Business Group and the 8% daily plan in the Royal group, you will see that they are identical except for the fact that the minimum investment for the 5% plan is $750 while the minimum for the 8% is $950. I don’t think the $200 additional in the way of a minimum investment is significant. So, obviously, the investor should put his money into the 8% plan. For that reason, we won’t consider the 5% plan further. That brings the number of plans that we will analyze down to only FOUR.
As long as we have it on the table, let’s continue to talk about the 8% daily plan in the Royal group. First of all, since this plan has a “gain profit” of 100% (meaning compulsory 100% compounding), you will not break even until the end of the investment plan. This will occur 140 calendar days after the plan begins — over four months. That’s when you will receive ALL your earnings.
Concerning profitability, since your investment is returned to you at the end of the plan, all of your earnings are profit (assuming the program survives until the conclusion of the plan). Eight percent per business day translates to 40% profit per week. If you divide this by seven, you come up with roughly a calendar day daily profit of 5.7%. We refer to this as daily net interest or DNI. In HYIP Insights #12, we suggested that HYIPs offering investment plans having DNIs greater than 2% might have a difficult time surviving in the long term. The DNI for this plan is almost THREE TIMES this amount. Unless there are other very favorable factors for this program, the odds would appear to be that it won’t be able to survive for very long.
Let’s put some numbers on this. Suppose that you invest $1,000 in this plan. If you earn 8% of this per day, your daily earnings will be $80. For 100 business days, your total earnings would be $8,000. Since your deposit is returned to you, your total return would be $9,000. This result can be checked in the online calculator by setting the gain profit to 0%.
However, this is wrong! The investment plan FORCES you to have 100% gain profit. In that case, the calculator tells you that your total return will be $2,199,761. This is ASTOUNDING! I even set up a spread sheet of my own to check the result. I won’t bother to calculate the DNI corresponding to this result. It will be way off the chart.
Next let’s take a look at the plan in the Business group that pays you a flat 14,000% after 100 business days (or 140 calendar days).
Here again, since you receive nothing until the plan ends, that’s when you will break even.
This will be pure profit since the plan description indicates that your investment is returned at the end of the plan. So, 14,000% divided by 140 days comes to a DAILY PROFIT OF 100%! Let me repeat that: a DNI of 100%! Considering our suggested upper limit of DNI of 2%, this is WAY off the chart. This implies that every day of the plan you get the equivalent of your investment returned to you. So, if I invest $1,000 in this plan, it will pay me $1,000 per day for each of the 140 days in the plan. In the 140-day period, your total profit will be $140,000. Adding your investment to this, your total return will be $141,000. This result can be checked in the website calculator. Of course, you don’t see any of these earnings until the plan ends.
We are left with the two investment plans in the Ordinary group. And, as the name implies, these are, indeed, very ordinary plans by HYIP standards. They pay a modest interest that is returned to you on a daily basis. You can elect to compound some or all of it, but, unlike most the other programs offered by LuxEarn where you are forced to compound 100%, this is an option.
The first of the two plans pays 0.5% per business day for 356 business days (around 500 calendar days) while the second pays 1.1% per business day for 100 business days (140 calendar days). Both of them return your investment at the end of the investment plan. First, let’s convert these interest rates to calendar days; it’s easier to think in these terms. To do that, you multiply each of the given percents by 5/7 to get 0.36% and 0.79% per calendar day. And, since your investment is returned to you at the end of the plan, these percents are profit or daily net interest (DNI). So, whereas the previous plans that we looked at had DNIs that were off the chart, these are both less than 1% — an amazing difference. Referring again to the article in HYIP Insights #12, programs offering investment plans having DNIs less than 1% have a GOOD chance of long term survivability. Of course, they are not the most profitable ones.
Since these two programs pay you earnings every business day, you might break even before the plan ends. Let’s see if that’s the case. To find out the days to break even you divide 100% by the daily interest paid. For the 0.5% plan, you get 200 business days (100/0.5) or 280 calendar days and for the 1.1% plan, you get around 91 business days (100/1.1) or 128 calendar days. These plans are 356 and 100 business days long; so, you will break even before the plans end and, after that, there will be a period of time during which your earnings will be pure profit until, ultimately, the plan will end and your principal will be returned.
Discussion.
The LuxEarn collection of investment plans is truly amazing. Twenty-five of them have minimum investments that are beyond the reach of the online investor. Of the five that remain, two of them are almost identical except for the interest rates that are offered (so that the investor would be foolish not to choose the one paying the higher interest); three of them (including the two that are almost identical) offer interest returns that are extremely high; and, two are typical of the typical HYIP investment plan, even offering returns that are probably lower than the industry average, and that won’t break even for over nine months in one case and four months in the other. So the choices are extremely high interest with no return until the end of the program or low interest with a daily return that will not enable you to break even until many months into the future. The first choice provides extremely high returns with the risk that the program might close before the investment term ends (which is when you receive all your returns) or that the program might not be able to pay the promised return. The second choice provides low daily returns (by HYIP standards) with the risk that the program might close before the investment term ends (which is when your investment will be returned).
Conclusions.
LuxEarn offers a total of 30 investment plans. However, as indicated above, probably only four of them make sense for the online investor. Of these four plans, two offer EXTREMELY high returns and two offer rather low returns. The Luxearn investment plans that pay extremely high interest rates lead a person to believe that the program will be unsustainable. However, the program has apparently been online for a number of years. This implies that these high interest investment plans have not been used. It is hard to believe that any investment program can afford to pay returns in the neighborhood of 100% per day. So, the inevitable conclusion is that investors have chosen to use the Ordinary group of investment plans. As we have discovered, this is a low interest long-term group of plans. From this point of view, LuxEarn would appear to be a very conservative program. The administrators of the program might want to consider eliminating some of the high interest investment plans that will in all likelihood never be used.
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