This project was moved on CLOSED! Beware and do NOT invest there anymore..
Discussion
In the analysis of the Monelo investment plan that we did in Part 1 of this review, we came up with a number of results that I’ll repeat here…
First, we decided to work with the average daily return of 2.43% in our analysis rather than deal with the complications of a 3% return on business days and a 1% return on weekends. Then, using this average rate of return, we found out that the plan will break even in around 42 days. Finally, we noted that the DNI that you will earn from the plan will vary depending on how long you leave your deposit in it or on how long it survives. Here are the values we calculated for DNI for different assumed lifetimes (or deposit periods) for the program.
- Assumed Program Lifetime DNI
- 45 days 0.21%
- 60 days 0.76%
- 75 days 1.10%
- 90 days 1.32%
- 120 days 1.60%
- 150 days 1.76%
- 180 days 1.87%
- 360 days 2.15%
Let’s first talk about the TYPE of investment plan offered by Monelo. As we indicated in our first thoughts article, it is what we refer to as a “perpetual” plan. By this we mean that a person receives interest on his deposit “forever.” In addition, Monelo allows the depositor to withdraw his deposit at any time (with a 10% penalty). So, the Monelo investment plan functions the same as a normal bank account, the difference, of course, being that it pays a MUCH higher interest rate. Specifically, Monelo pays an average of 2.43% per DAY whereas, at least here in the US, a bank savings account only pays 1% to 2% per YEAR. Theoretically, this is a wonderful arrangement for the online investor — a lucrative perpetual source of passive income. A problem comes about because the company faces an always increasing payment obligation; there is never any relief as is the case with an investment plan of finite length. So, unless the company has actual revenues in excess of the returns it promises to pay, the company will ultimately have to close its doors. I suppose this is the case with any HYIP. However, the situation becomes more serious with a perpetual investment plan because the amount of “new” money coming into the program will be less.
A compensating factor is the fact that the Monelo investment plan breaks even fairly quickly — in roughly seven weeks. In addition, since you are receiving a decent daily return, the portion of your investment that is at risk decreases at a fairly decent clip — at roughly 17% per week (2.43 x 7).
By most standards this is a profitable investment plan. After only 75 days, your average daily net interest (DNI) is over 1% and, after a year is so, you are averaging over 2%. One percent is equivalent to an average weekly profit of 7% and 2% is equivalent to an average weekly profit of 14%. Wouldn’t it be nice to make 14% weekly profit on an investment ad infinitum…
In the article in HYIP Insights #12, we tried to draw a relationship between DNI and risk. Our logic led us to suggest that the long-term survivability of programs offering investment plans having DNIs higher than 2% might be seriously at risk and, furthermore, that the survivability of programs offering investment plans having DNIs between 1% and 2% might be questionable. So, from this point of view, the implication is that the investor should be somewhat cautious about participating in the Monelo program. Of course, these are only our “suggestions” and they might well be wrong! However, they are at least something for the investor to think about. A compensating factor is that the investor can withdraw his deposit whenever he chooses. So, he might want to get out his “crystal ball” in an effort to determine if/when the program might close and be sure to withdraw his deposit before then.
Earnings Example.
OK, it’s simple to work out an earnings example for the Monelo investment plan. However, we’ll again make the simplification that you are receiving an average daily return of around 2.43%. This, as we calculated, is equivalent to receiving 3% on business days and 1% on weekends.
Let’s assume an investment of $200. Your average daily return will be around $4.86 (.0243 x 200) and you will receive this forever. After 42 days, you will have received a total of $204.12 (42 x 486). So, that’s roughly how long it will take you to break even. This is a very simple investment plan to understand.
Conclusions.
Monelo offers a single “perpetual” investment plan that permits the investor to withdraw his deposit from it at any time (with a 10% penalty). The plan is lucrative, but not insanely so as is often the case with many online HYIPs. However, the fact that the investment plan is “perpetual” adds to the risk of it being unable to survive indefinitely. On the other hand, with the “safety net” of the investor being able to withdraw his deposit at any time, this becomes a program that might appeal to a wide variety of online investors.
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