The LedGeneration Investment Plans.

We recently published a “First Thoughts” article about an online investment program called LedGeneration.  In the article, we presented an overview of the program’s business operations and also summarized its investment plans.  Here’s what we said about the investment plans:

Concerning its investment plans, there are three of them and they are all very long term, running for 180 business days.  Noting that there are roughly 22 business days per 30 calendar day month, this converts to around 246 calendar days (180 x 30/22).  This is more than eight months — definitely a long time in the HYIP world.  An unusual feature of the investment plans is that they return HALF of your investment at the end of the 180 business day period.  I have not seen that approach before.  Perhaps it is a good compromise between returning all of a person’s investment as part of his earnings and returning all of it at the end of an investment plan.  LedGeneration pays earnings daily on business days.  Interest rates appear to be modest, which probably makes good sense for a long-term program such as this which the investor would hope will survive for a very long time.  There is a lot more to say about these investment plans.  The fact that they return half of your investment at their conclusion will make us work a little bit in comparing them to other online investment programs!  Please stand by for our review of this interesting program when we will take a closer look.  We expect to publish the review within a few days.

To complete the picture, here is additional information about the three investment plans as it appears in the LedGeneration Website:

Cold Plan
1.45% daily
$10 – $999

Warm Plan
1.65% daily
$1,000 – $9,999

Hot
1.85% daily
$10,000 – $50,000

Analysis of the LedGeneration Investment Plans. 

(Correction to LedGeneration Review)

If you want to REALLY understand these investment plans and be able to compare them to those of other online investment programs, you will have your work cut out for you.  First of all, they pay interest on work days rather than on calendar days.  Next, they return HALF of your earnings when the plan ends which, in all three cases is after 180 working days.

When we analyze an investment plan, we typically determine two quantities: the number of days that it takes the plan to break even and the daily net interest rate (DNI) that it provides.  Remember that DNI is the total net profit that you earn from an investment plan divided by the number of CALENDAR days in the plan.  We have referred to DNI in a number if HYIP Insights articles that we have written and have discovered that it is the best way of presenting the profitability of an investment plan and that it also suggests how well a program might survive in the long term.

Let’s begin by determining how long it will take each of the three LedGeneration investment plans to break even.  This is a simple job as you simply divide 100% by the gross daily interest that a plan pays.  For example, looking at the Cold Plan, if you divide 100% by 1.45%, you get that the plan breaks even in around 69 working days.  If you convert this to calendar days by multiplying by 30/22, you get that the plan will break even in around 90 days — three months.  Remember that, in the First Thoughts article, we indicated that all the plans are around 246 days long.  So, the Start Plan will break even around one third of the way through the plan (90/246 = 0.37).  After that, all your earnings will be pure profit.  The other two investment plans will obviously break even sooner since the gross daily interest that they pay is higher.  Here are the breakeven points (in calendar days) that you would come up with if you did this same arithmetic for all three of the plans:

Plan                 Break Even (calendar days)
Cold                 90
Warm              83
Hot                   74

Next, let’s try to determine the DNI for the Cold Plan.  It pays you 1.45% gross interest per working day.  For the 180 working day investment period, this gives you total gross earnings of 261% (1.45 x 180).  Since the plan returns half of your investment at the end of the investment period (this is a nice way of saying that they keep the other half), your total gross earnings must be decreased by 50% to get your total net earnings.  This comes to 211% (262-50).  Finally, dividing this by 246, the number of CALENDAR days in the investment plan, you get a DNI of 0.86% for the Cold Plan.  Remember that DNI is based on calendar days rather than working days!

If you do this same arithmetic for the other two LedGeneration investment plans, you get the following values for their DNIs:

Plan                 DNI
Cold                 0.86%
Warm              1.00%
Hot                  1.15%

Now that we have the basic information for these plans sorted out, we will be able to intelligently determine their pros and cons.  And, that’s what we’ll do in Part 2 of this review.  Please stand by.  We expect to publish it within the next few days.

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