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The CoinFinance Investment Plans.

In our recent “First Thoughts” article about CoinFinance, we summarized their investment plans in the following way:

CoinFinance offers five investment plans.  All of them are 70 business days long (around 96 calendar days) and all return your principal at the end of the investment period.  So, depending on your point of view, these might be classed as medium to long-term investment plans.  Daily returns (on business days) range from 3.5% all the way up to 5%.  However, the minimum investments required for higher interest plans are so high that they will be way beyond the reach of the typical online investor.  However, with a minimum investment of only \$10 for the lowest interest plan, all interested investors will be able to invest with the CoinFinance program.  The CoinFinance investment plans are very easy to understand.  However, there are a still few details that should be looked at closely.  We will do this and also try to explain the pros and cons of the program when we review it sometime in the next few days.  Please stand by…

Here is the full information on the CoinFinance investment plans as it appears on their website:

3% per day
\$10 – \$999

3.5% per day
\$1,000 – \$9,999

4% per day
\$10,000 – \$49,000

4.5% per day
\$50,000 – \$99,999

5% per day
\$100,000 – \$1,000,000

Analysis of the CoinFinance Investment Plans.

When we analyze investment plans, unless they have very unusual features, we determine two items: break even point and daily net interest.  The Coinfinance investment plans are very easy to understand.  So, that’s what we’ll do here.

First, let’s talk about break even points.  To determine when an investment plan breaks even, you divide 100% by the daily percent that you receive in earnings.  For the 3% plan, this comes to around 34 business days (100/3).  Since there are 22 business days in a 30 calendar day month, we multiply this result by 30/22 to get the number of calendar days.  The result is around 46 calendar days.  Remember that this result might be off a day or two as the conversion is not always accurate and there are “round-off” errors in our calculation.  However, it is more than good enough for our purposes here.  Doing the same arithmetic for the other four plans, we get the following results:

Plan                 Calendar days to break even
3%                   46
3.5%                39
4%                   34
4.5%                31
5%                   28

Next, let’s talk about daily net interest (DNI).  This is the total net interest paid out by an investment plan averaged out over the number of CALENDAR DAYS in the plan.  Since all the plans return your investment at the end of the plan, the interest that you earn will be profit or net interest.  This, of course, assumes that the program survives until the end of the investment plan.  To keep things simple, let’s make that assumption (this is the assumption we always make in analyzing investment plans of this type in our reviews).  So, for the 3% plan which is 70 business days long, you will receive a total net interest of 210% over the course of the plan (3 x 70).  In our First Thoughts article, we pointed out that 70 business days is roughly equivalent to 96 calendar days (70 x 30/22).  So, dividing 210% by 96 days, we get a daily net interest (DNI) of 2.19%.  Doing the same calculation for the other four plans, we get the following:

Plan                 DNI
3%                   2.19%
3.5%                2.55%
4%                   2.92%
4.5%                3.28%
5%                   3.65%

Discussion.

First, let’s take a look at the minimum investment requirements for the five investment plans.  The 3% plan has a minimum of \$10 and a maximum of \$999.  So, the vast majority of online investors will use this plan.  The 3.5% plan has a minimum investment of \$1,000 and a maximum of \$9,999.  I suspect that a number of very serious investors might invest \$1,000 or slightly more to take advantage of the higher interest rate.  But, they will probably be few and far between.  The 4% plan has a minimum investment of \$10,000.  I doubt if any investors will risk this much of their hard-earned cash on an online investment program.  In fact, we at EmilyNews always recommend that investors do NOT invest large amounts of money in ANY online investment plan unless the company can provide verifiable evidence of both its existence and the earnings it has paid out in the past.  The minimum investments for both the 4.5% and 5% plans are way off the chart.  So, all this considered, in what follows, I will only be talking about the 3% and 3.5% investment plans.  You should keep in mind the important fact that the 3.5% plan will probably not be used very much.

The 3% and 3.5% investment plans take 46 and 39 calendar days to break even.  This is OK, I suppose, as many online HYIPs will survive for this long (you should always keep survivability in the back of your mind!).  In addition, since you are receiving interest on a daily basis, the amount of your investment that is at risk decreases daily.

The 3% and 3.5% plans have DNIs of 2.19% and 2.55% respectively.  These are certainly very profitable investment plans.  If you multiply each of these figures by seven, you get weekly profits of 15.33% and 17.85% respectively.  Almost any online investor would be more than happy with that.  However, the flip side of the coin, when it comes to highly profitable programs, is the increased risk that usually comes with it.  In HYIP Insights #12, we suggested that programs offering investment plans with DNIs greater than 2% might be at risk from the point of view of long-term survivability.  With a DNI of 2.19%, the 3% plan is slightly above this.  The 3.5% plan has a DNI of 2.55% which is significantly above it.  However, here is where the program might be saved as probably only a few investors will use the 3.5% plan.  So, the company will have a much smaller obligation to its clients in the way of paying interest earnings.  It is also important to remember that the 2% DNI cut-off point is only our OPINION of where high-risk programs begin to kick in.  It could be more; it could be less…

Conclusions.

CoinFinance offers five investment plans.  The three highest interest plans are probably unusable because of the high minimum investment requirements.  A fourth plan is borderline as the minimum investment is still quite high.  Only the lowest interest program will probably be popular with online investors.  In spite of the fact that it is the lowest interest plan that CoinFinance offers, it is still highly profitable.  This high profitability carries the inherent risk that the program might be offering returns that are unsustainable.  However, the returns are by no means “out of sight.”  With wise management practices, the administrators of CoinFinance might be able to keep the program running for a long time to come.

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