The Instant Bitex Investment Plans.
A few days ago, we introduced the Instant Bitex online investment program in what we refer to as a “First Thoughts” article. In the article, we noted what we thought were the unusual features of the company’s investment plans. Here’s what we said at that time:
For the investor, Instant Bitex offers three investment plans. They are unusual in a number of ways. First, they are all 365 business days long. Since there are roughly 22 business days in a 30-day month, you can multiply 365 by the conversion factor 30/22 to get that the plans are roughly 498 calendar days long. That’s over one year and four months long — which is a long time. So, even though the program has been online for over a year, none of its investors have yet completed a full investment cycle. Second, interests are modest and are 0.5%, 1.0%, and 1.5% per business day for the three plans. On a calendar day basis, the rates would, of course, be even lower. These relatively low returns are at last a partial explanation for the longevity the program has so far achieved. Third, a nice perk is that there is a significant deposit bonus for each of the three investment plans. It is a fixed amount for each plan so that, if you invest a smaller amount, you will benefit more from the bonus. You can even double your deposit amount!
With that as an introduction, if you refer to the website, you will find the following additional information about the Instant Bitex investment plans:
- Silver Plan
- 0.5% for 365 working days
- $25 – $1,000
- Bonus = $50
- Gold Plan
- 1.0% for 365 working days
- $1,001 – $5,000
- Bonus = $500
- Platinum Plan
- 1.5% for 365 working days
- $5,001 – $1,000,000
- Bonus = $1,000
Analysis of the Instant Bitex Investment Plans.
Let’s first take a look at how long it will take each of the Instant Bitex investment plans to break even. For the Silver Plan, dividing 100% by the 0.5% daily gross return, you find that it will take 200 business days to recover your investment (to break even). We can convert this to calendar days by multiplying by the 30/22 conversion factor (that we used in the First thoughts article) to get that the plan will break even in around 273 calendar days — around nine months. Doing the same calculation for the other two investment plans, you get the following results:
- Plan Calendar days to break even
- Silver 273 days
- Gold 137 days
- Platinum 91 days
Things are a bit more complicated than this, however, since you receive a deposit bonus. For example, in the Silver Plan, you receive a deposit bonus of $50 no matter what your investment might be. So, to use a simple example, if you deposit $50, your $50 bonus will effectively DOUBLE your deposit to $100. Your earnings will therefore double and you will break even in half the time it would take you to break even without the bonus. However, if you are still using the Silver Plan and invest the maximum of $1,000, the $50 bonus will only increase your deposit and earnings by 5%. Therefore, the effect on the breakeven point won’t be as noticeable. The important points of this brief discussion might be that:
- The deposit bonus has a great effect on earnings and breakeven point for investments at the LOW end of the investment limits in each of the investment plans.
- You will always break even faster than the number of days predicted above no matter what your investment is.
- The bonuses will also cause your earnings to always be greater that the advertised rates for the various investment plans.
In a later section of this review, I will work out specific numerical examples to put numbers on all this.
Next, let’s determine the average daily net interest (DNI) that you will earn for each of the Instant Bitex investment plans.
Remember that DNI is the total net interest (profit) that an investment plan pays you averaged out over the number of calendar days in the plan. Obviously, in any investment plan, you haven’t accumulated any profit until you break even. However, after that, all your earnings are “pure profit.” DNI averages this pure profit out over the entire length of the plan.
For the Silver Plan, the total gross interest that you receive will be the daily gross interest of 0.5% times the 365-day length of the investment plan or 182.5%. Since this includes your investment, you must subtract 100% to get the total net interest that you will receive, or 82.5%. In the First Thoughts article, we determined that all the Instant Bitex investment plans are 498 calendar dayslong. Do, dividing 82.5% by 498, we get a DNI for this investment plan of around 0.17%. If you do this same calculation for the other two investment plans, you will get the following results:
- Plan DNI
- Silver 0.17%
- Gold 0.53%
- Platinum 0.90%
Again I note that these values do not include the effect of the deposit bonus — which we will find out later in this review is significant.
Because of the deposit bonuses, there is a lot more to discuss. We’ll get into all that in Part 2 of the review. Please stay tuned. Part 2 will be available in a few days.
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