Calendar Days not Business Days!

In both our “First Thoughts” article about LedGeneration and also our review (read it here), we indicated that the program’s investment plans are 180 BUSINESS days long.  We just received an email from the company informing us that this is incorrect; the plans are 180 CALENDAR days long.  Needless to say, this change will have a profound effect on our analysis of the program as well as the conclusions we made about its profitability and risk for the potential investor.

This oversight of our is an understandable one and there may also be investors that have made the same mistake.  When an HYIP — in the same paragraph — refers to a program that is 180 days long and that pays interest on business days, it should clearly indicate that one time-frame is in calendar days while the other is in business days.  I hope that the administrators of LedGeneration will clarify this point of confusion on their website in the very near future.

Because of this ambiguity, we may have confused a number of investors in our review.  It is unfortunate that the administrators of LedGeneration waited until the completion of our two-part review before informing us of this oversight.

All this said, let’s try to straighten things out…

I will try to make this News Commentary stand on its own.  However, it will be briefer than the original two-part review.

Once again, here are the three LedGeneration investment plans.  All are 180 CALENDAR days long and return 50% of your investment at their conclusion.  They pay interest on BUSINESS days.  (It is important to realize that 180 calendar days is a MUCH shorter time period than 180 business days which was the basis of our original review.  180 business days, you will remember, is equivalent to around 246 calendar days.)

Cold Plan
1.45% daily
$10 – $999

Warm Plan
1.65% daily
$1,000 – $9,999

Hot Plan
1.85% daily
$10,000 – $50,000

In our original review, we determined that the plans break even in the following number of calendar days (this result doesn’t change as a result of changing the overall length of the plans).

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

So, for a 180 calendar-day length of plan, you will be breaking even roughly half way through it (we aren’t going to pay too much attention to the Hot Plan due to the high minimum investment required).  Keep in mind that the 90 day breakeven time is three months.

We next determined the daily net interest rate (DNI) for each of the plans. That DOES change because it DOES depend on the length of the plans.  Since there are roughly 22 working days in a 30-day month, there will be roughly 132 working days in the 180 calendar-day investment plan period (22 x 6).   In the Cold Plan, with a gross daily interest of 1.45%, the total gross interest that you would earn would be around 191% (132 x 1.45).  Since this includes 50% of your deposit (remember that the other 50% will be returned to you at the end of the plan), the total net interest that you will receive will be 50% less than this or 141%.  Dividing this by 180, the number of calendar days in the investment plan, you come up with a DNI of around 0.78%.  Doing the same arithmetic for the other two investment plans, you get the following results:

Plan                DNI
Cold                0.78%     (0.86%)
Warm              0.93%     (1.00%)
Hot                  1.08%     (1.15%)

The numbers in parentheses are the DNIs we determined using the 180 BUSINESS day (246 CALENDAR day) calculation of the original review.

Don’t forget that these results assume that the program survives until the end of the investment plan, at which time the 50% of your deposit that was not returned to you as part of your earnings will finally be returned to you.  Although this is a very conservative investment program, in the HYIP business a six-month investment period is still a long time.  So, there is significant risk here.

So, as you would expect, since the plans stop sooner after the breakeven period than we originally thought, they are less profitable.  Average weekly net profits will be in the neighborhood of 5% to 7% (.78 x 7 or .93 x 7).  This is still very significant and will make the conservative investor very happy!

These DNIs are all less than 1% (don’t pay too much attention to the Hot Plan).  Referring, as always, to the article that appeared in HYIP Insights #12, our suggestion is that programs having DNIs in this range will have a high probability of long-term survivability.

In summary, the LedGeneration investment program offers three investment plans.  All are 180 calendar days long and pay interest on business days.  The Hot Plan, the highest interest plan, is not recommended because of the high initial investment required.  However, the two lower interest plans, the Cold and Warm Plans, have the potential of being reliable sources of income for the conservative investor looking for a long-term investment program.  They probably would not be the “cup of tea” for the adventuresome investor looking for quick profits.

I hope that this revised information will be helpful to you in understanding the LedGeneration investment program.  We will add a link to this News Commentary in our original review.

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