Discussion.
To summarize from Part 1 of our review a little bit, LoanTech offers a single “perpetual” investment plan that pays you a daily return of 3% per day. An unusual feature of the plan is that, after 22 days, you have the option of withdrawing 34% of your investment. This enables you to break even at that time. Otherwise, if you don’t use this option, it will take 34 days for you to break even. In Part 1 of our review, we observed that the daily net interest (DNI) that you can earn from this investment plan will depend on how long the program survives. Specifically, we determined the DNI for different assumed lengths of survival for the program as follows:
- Assumed lifetime of plan DNI
- 60 days 1.33%
- 120 days 2.17%
- 180 days 2.44%
- 360 days 2.72%
OK, let’s discuss all this…
In general, a “perpetual” investment plan such as this is the online investor’s dream. Much like a conventional bank account, you make a deposit once and you receive interest on it forever. The difference, of course, is that LoanTech will pay you a MUCH higher interest return that probably any bank on the planet. However, LoanTech will only permit you to withdraw up to 34% of your deposit after 22 days whereas, with a bank account, you can withdraw any portion of your deposit at any time you want.
The downside of the LoanTech investment plan is that it is highly likely that it won’t be “perpetual.” The high interest that it pays will ultimately force the program to close down. When will this happen? We don’t really know. However, we can discuss the probabilities of when this will happen based on the level of interest that the plan provides.
But let’s talk about profit first. Although you put 3% of your deposit into your pocket every day, this isn’t your NET profit as you must first recover your investment; you must first break even. After that happens, all of your returns are pure profit and, as the days go by, the average daily net interest (DNI) that you have earned over the length of the investment plan will gradually increase. This is what the table of DNIs for different assumed lengths of the program shows us. Looking at the table, you can see that after three of four months your DNI is in the neighborhood of 2% per day. If you multiply this by seven (days per week), you are approaching a weekly net profit of 15%. Ultimately, the DNI will home in on the daily return of 3% per day which equates to a weekly net profit of 18%. You may disagree with me on this, but in my mind weekly net profits of over 10% are very lucrative. So, this program becomes a very lucrative venture very quickly.
The flip side of high profit is, of course, high risk. In HYIP Insights #12, we suggested that the survivability of programs offering investment plans having DNIs higher than 2% might be at risk. This would apply to the LoanTech program. There is another factor to consider here as well. With an investment plan having a finite length, the company ultimately gets “relief.” The term of an investment plan ends and new investors inject new money into the program. There is no such relief for a company that offers a “perpetual” investment plan such as the one offered by LoanTech. Its obligation to pay interest returns simply grows and grows without limit. Needless to say, this is not a healthy situation for the finances of an online investment company, especially one such as LoanTech that offers an investment plan with a return that is rather high to begin with.
This discussion of profitability and risk is based on our OPINION. We suggest that the reader take what we have said to heart but also do his own due diligence and arrive at his own independent conclusions concerning this most important aspect of an online investment program.
A minor, but nice, feature of this investment plan is that the range of permissible investments is extremely wide; everyone is welcome to invest whether he only has $10 to play around with or he has thousands of dollars.
Earnings Example.
Let’s use $100 as our investment amount; it is very easy to work with. We’ll look at two cases: when you allow your deposit to remain untouched forever and when you withdraw 34% of it after 22 days.
Case 1. You will receive 3% of your $100 investment every day, or $3 (.03 x 100). After 34 days you will have received $102 (34 x 3) and you will have broken even. Every day after that, you will continue to receive $3 — forever. As an example, after 100 days, you will have received a total return of $300 (100 x3), for a net profit of $200.
Case 2. You will again receive a daily return of 3% of your investment. After 22 days you will have received a total of 66% (22 x 3) of your investment, or $66 (.66 x 100). At this time, you withdraw 34% of your investment, or $34 (.34 x 100). So, you have received a total of $100 (66 + 34) and you will have broken even. You now have a remaining deposit of $66 remaining in your account that you will receive a daily return of 3% on, or $1.98. (.03 x 66). Since you have broken even, you can say that everything that you now earn will be net profit. In order to compare this case with the previous one, let’s see how much net profit you will earn in 78 more days (so the total time of investment will also be 100 days). Doing this, we get a net profit of $154.44 (78 x 1.98).
So, you can see that, while the option of being able to withdraw 34% of your funds after 22 days so that you can break even early lowers the risk associated with early closure of the program, it also lowers your net profit considerably. In this specific example, in the assumed 100-day investment period, your net profit decreased by around 25%. The investor will have to decide which is more important: decreased risk or decreased net profit.
Conclusions.
LoanTech offers a single “perpetual” investment plan. It is very lucrative, providing a 3% daily return — forever. The investor can optionally withdraw up to 34% of his deposit after 22 days to permit him to break even at this time. This lowers risk in case the program closes prematurely but is also lowers future profits. “Perpetual” investment programs such as this are appealing to the online investor and this one might be no exception — in spite of the risk associated with it due to its high profitability.
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