The Revised Caribbean Dream Investment Plans.
A few days ago, in News Commentary #677, we pointed out that Caribbean Dream has come up with a completely new website — along with a completely new set of investment plans. Here’s what we said in that article.
Caribbean Dream has implemented the new website we hinted at in News Commentary #674. It is completely new! No more pirates! In fact, it looks a bit too “normal” as far as I’m concerned! Perhaps most important, there are four new investment plans. They are completely different from the previous single investment plan that Caribbean Dream offered previously with very different interest rates and much higher investment limits. We had suspected that Caribbean Dream would expand its investment opportunities, but this new website far exceeds our wildest expectations. The changes are so great that this is essentially a new program and we will do a new review of its investment plans in the very near future. Please stand by for this.
The four investment plans each have a variable daily interest rate and they each continue to pay interest until a preset maximum gross profit is reached. As you can see, this complicates things for the investor since you know neither the interest rate you will be receiving nor the length of the investment plan. Here’s the website information on the four investment plans:
Total Gross Interest Daily Gross Interest Investment Limits
170% 1% – 1.35% $25 – $999
180% 1.05% – 1.45% $1,000 – $4,999
190% 1.1% – 1.65% $5,000 – $9,999
200% 1.15% – 1.75% $10,000 – $100,000
The investor will naturally want to compare the investment plan that was previously offered by Caribbean Dream to their new offerings. That’s what I’d like to concentrate on in this second review of Caribbean Dream. Let’s begin…
Analysis of the New Caribbean Investment Plans.
In the way of a review, Caribbean Dream previously offered only one investment plan. It paid 1% per working day for 20 working days and then returned your investment at the end of the plan. So, you recovered some of your investment during the course of the plan and, when it ended, you got your entire deposit back. So, these daily interest earnings became your profit. The maximum investment for the plan was only $500.
In News Commentary #605, we made a few updates and corrections to our original review of the program. Most important was that we determined that the average daily net interest (DNI) that the Caribbean Dream investment plan paid was 0.71%. This works out to an average weekly profit of around 5%. We commented that, although this level of return might be considered to be low by some online investors, it is still satisfactory and is in the ballpark that might maximize chances for long term survivability of the program. Here are our comments from this News Commentary…
We DID make a mistake, however, when we reviewed the program. We indicated that the average daily net interest (DNI) for the investment plan was 1%, the logic being that, since your investment is returned at the end of the plan, all your earnings will be pure profit — assuming the program doesn’t close before the investment plan ends. Well, this would be true if the 1% was paid on a calendar day basis. However, it is paid on business days and, since DNI is based on calendar days, a conversion is necessary. Since there are roughly 22 business days in a 30 calendar day month, 20 business days is approximately equal to 28 calendar days (30/22 x 20). So, if you average out the 20% interest that you receive over a 28 calendar day period, you come up with a DNI of around 0.71% (20/28). On a weekly basis this comes to around 5% profit (7 x .71). These values for DNI and weekly profit are right in tune with our recommendations for a sustainable online investment program and this might be at least part of the reason that Caribbean Dream is still alive and well today (please see HYIP Insights #12 and HYIP Insights #23 for further information on all this).
Well, how do the new investments plans compare to the old one? First of all, you have probably noticed that the maximum permissible investment rates are now much more higher than the old maximum of $500. Even the lowest interest plan, the 170% plan, has a maximum of $999. The three higher interest plans have maximums that go as high as $100,000. Quite an increase from $500!
For purposes of comparison to the old plan, we will focus our attention on the 170% plan and make only passing reference to the three other higher interest plans. I note that, due to the high minimum investment requirements, the 190% and 200% plans with minimum investments of $5,000 and $10,000 will probably have minimal use. In fact, we discourage investment of large sums of money in ANY online investment plan.
Let’s try to estimate DNI for the 170% plan. In order to do that, we need a gross daily interest rate. For the sake of simplicity, we will use the average of 1% and 1.35%, the limits that were given on the gross return. Their average is 1.175%. Since we know that the plan will end when the total gross return reaches 170%, you can divide 170% by 1.175% to get an estimated length of the investment plan. This comes out to around 145 days. Dividing this by 30 days per month, you get that the plan is around 4.8 months long. To get the total net interest, you subtract 100% from the total gross interest of 170% to get 70%. Finally, if you divide this by the 145 day estimated length of the plan, you come up with an estimated average daily net interest (DNI) of 0.48%. You can do the same arithmetic for the other three plans to come up with the following results:
Plan Days Months DNI
170% 145 4.8 0.48%
180% 144 4.8 0.55%
190% 138 4.6 0.65%
200% 138 4.6 0.72%
Before we can discuss all this, we should also determine how long it will take each of the new investment plans to break even. That’s easy to do. You simply divide 100% by the assumed daily gross return. So, for the 170% plan, dividing 170% by 1.175%, you get that the plan will break even in around 86 days or, dividing by 30, in around 2.9 months. Here are the results if you repeat this arithmetic for the other three plans:
Plan Break Even
170% 86 days or 2.9 months
180% 80 days or 2.7 months
190% 73 days or 2.4 months
200% 69 days or 2.3 month
As I suggested previously, let’s focus on comparing the new 170% plan with the old plan as they deal with comparable investment amounts. Let’s look at the critical factors, one by one:
The old plan had a DNI of 0.71% for an average weekly profit of around 5.0%. The new plan has an estimated DNI of 0.48% for an average weekly profit of 3.4%. This decrease in profitability is over 30% which is quite significant. There is a lot of “smoke” or camouflage in the presentation of the new investment plan. 170% sounds very profitable — until you determine DNI, which is the true measure of profitability of an investment plan. So, as far as profitability is concerned, by HYIP standards, and compared to the old investment plan, the new plan is not a profitable one.
The flip side of the coin is always sustainability. Lower profits always improve the chances that the program will be more sustainable. The individual investor will have to choose the balance between profitability and risk that he is most comfortable with.
Length of Plan
This is now a very long-term plan. The old plan was less than a month long. The new one is almost five months long. Although Caribbean Dream already has a good record of survivability, the investor should think long and hard before committing his hard-earned cash for such a long period. Likewise, a breakeven period of nearly three months is a long time in the HYIP business.
Caribbean Dream has replaced its previous short-term investment plan with four long term plans. The maximum investment limits of the new plans are much higher than the limit of the old plan. The average daily net interest paid by the new plans will probably be lower than that paid in the old plan. Thus, the plans will likely be less lucrative on a daily basis. However, it is possible that this will improve the survivability of the program.
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