{"id":1061,"date":"2017-05-26T03:30:51","date_gmt":"2017-05-26T03:30:51","guid":{"rendered":"http:\/\/emilynews.com\/blog\/?p=1061"},"modified":"2017-05-26T03:32:02","modified_gmt":"2017-05-26T03:32:02","slug":"hyip-insights-11-compounding-miracle-monster-part-3","status":"publish","type":"post","link":"https:\/\/emilynews.com\/blog\/?p=1061","title":{"rendered":"HYIP Insights #11 — Is Compounding a Miracle or a Monster? Part 3"},"content":{"rendered":"

<\/a>Compounding on Your Own.<\/strong><\/p>\n

In Part 2 of this article<\/a>, we discussed both the influence of interest rate and the length of the investment term on the profitability of compounding.\u00a0 There were really no surprises in that, the higher the interest rate and the longer the term, the more lucrative compounding can be.\u00a0 What might have been a surprise is just HOW lucrative compounding can be.\u00a0 This is the reason that most HYIPs are careful about the interest rate they offer if they are also offering automatic compounding.\u00a0 They might also limit the term of an investment plan in a similar attempt to limit the profitability of compounding.<\/p>\n

However, as you probably already know, compounding doesn\u2019t have to be automatic in order for you to compound — and for as long as you like.\u00a0 The definition of compounding is simply to reinvest your earnings.\u00a0 So, that\u2019s all you have to do in order to compound on your own.\u00a0 The only advantage to automatic compounding is that it is done instantly; the minute you have interest earnings, they are reinvested into your account.\u00a0 On a personal level, it is impossible to do this.\u00a0 Who can monitor their account 24\/7?\u00a0 However, it\u2019s possible to do a pretty good job at this and to build up your principal to the desired amount almost as quickly as when the compounding is automatic.\u00a0 And, obviously, you can compound partially just as easily.\u00a0 For example, instead of reinvesting all of your interest earnings when they are posted, you might choose to reinvest half of them and withdraw half.<\/p>\n

<\/a>Online Programs that Offer Automatic Compounding.<\/strong><\/p>\n

Roughly a month ago, an HYIP that I expected to last a long long time suddenly closed its doors. \u00a0This was SportArb.\u00a0 Even though the program is gone, it might be somewhat educational to read our review of it as it refers to the automatic compounding feature that the program offered (you can read the review here<\/a>).\u00a0 SportArb offered six different investment plans and paid investors a percent of the company profits that depended on the size of a person\u2019s investment.\u00a0 Specifically, their \u201cBasic\u201d plan paid 70% of SportArb’s profits on a daily basis and expired after 60 days (at which time your principal would be returned to you).\u00a0 Of course, knowing what we know now, it would be a simple matter to reinvest your compounded principal at the end of the 60 day period in order to double the length of the term — and so on for as long as you like and for as long as you care to risk your money.\u00a0 Typically, SportArb made around 2% profit per day.\u00a0 So, if they paid you 70% of this, your daily interest would come to 1.4% (2 x .7).<\/p>\n

This is one of the interest rates that we examined in Part 2 of this article.\u00a0 You might want to refer back to the chart showing growth of principal for three different interest rates.\u00a0 For our purposes here, what is important is the principal at the end of the investment term.\u00a0 The chart used 110 days which is close enough for us to get a good idea of how this works.\u00a0 In that time period, we found out that, using 100% compounding, a deposit of $1,000 would grow to $4,615<\/u>.\u00a0 This is certainly acceptable growth in three or four month\u2019s time.<\/p>\n

As an aside, over five years ago I made a good deal of money investing in an online HYIP called GoldNugget.\u00a0 They were supposedly involved with the same business that SportArb was involved with — arbitrage betting on sporting events.\u00a0 Being a bit of a mathematician, this struck me as a plausible method for a company to use to earn lots of money.\u00a0 I might have been correct as the company did survive for quite a long time.\u00a0 Well, I suspected that SportArb might be the same great deal and came very close to investing a sizable (for me!) amount of money in this program shortly after we reviewed it.\u00a0 My plan was to let the deposit compound for one 60 day term and then to reinvest my compounded principal and withdraw the interest earnings on a daily basis.\u00a0 Fortunately, I didn\u2019t do this as I would have lost everything!\u00a0 I mention all this as an example of the thought process that a person might go through in deciding how to manage his investment.\u00a0 Now, even though I fortunately didn\u2019t make this investment, I would probably not opt for 100% compounding.\u00a0 For me (and this is a very personal thing) the risk is too great as you simply cannot predict what will be the fate of an HYIP — no matter how good it appears to be.<\/p>\n

But back to our discussion\u2026<\/p>\n

Right now there is a program that, like SportArb, offers automatic compounding.\u00a0 This program is called AurumBank <\/a>(reviewed here<\/a>) and they refer to automatic compounding as \u201cPlowback\u201d.\u00a0 Also like SportArb, you can select the amount of compounding that you would like to use.\u00a0 A very nice thing about the AurumBank <\/a>website is its clarity.\u00a0 They offer a lot of investment plans (25 of them!).\u00a0 But, they are all neatly categorized, and when you go to the details of a plan, there is a simple online calculator that will calculate your return for whatever compounding rate you might choose.\u00a0 Many of the plans are beyond the reach of the typical online investor.\u00a0 However, four or five of them are certainly doable.\u00a0 Two such plans for which compounding is available are what they refer to as Stable Plan #1 and Premium Plan #1.\u00a0 Both of these plans have terms of 110 days with the Stable plan offering a daily interest rate of 3% and the Premium plan offering 8%.<\/p>\n

\"\"<\/a><\/p>\n

As you might have noticed, these are the other two interest rates we examined in Part 2 of this article.\u00a0 Using 100% compounding, both of them provide amazing returns at the end of the 110 day term.\u00a0 Referring to the chart, the Stable plan will pay you $25,828 and the Premium plan will pay you $1,706,929<\/u>.\u00a0 These are the same numbers that the online calculators in the AurumBank <\/a>website come up with.\u00a0 While it might be possible for AurumBank <\/a>to pay the return predicted for the Stable plan, I don\u2019t think there is even the slightest chance that it can pay the return predicted for the Premium plan.\u00a0 I feel this is very unfortunate as, if someone did indeed make a $1,000 investment in one of these plans (especially the Premium plan), the company would have no choice other than to shut its doors.\u00a0 AurumBank <\/a>has been around for over two years and I sincerely hope that they will straighten this out while it is still possible.\u00a0 It would be wonderful if they were around for many more years to come.\u00a0 I should note that I might be completely wrong on this.\u00a0 If, indeed, ArumBank<\/a> could come through with this level of payment, the company would be famous in the HYIP industry for years to come! \ud83d\ude42<\/p>\n

All this said, you now have an idea of what online programs that have automatic compounding look like.\u00a0 On the plus side, they generally appear to be very understandable from a technical point of view.\u00a0 Both SportArb and AurumBank <\/a>had\/have very nice calculators that precisely predict your return for whatever compounding rate you might choose.\u00a0 Alas, the dilemma always comes down to imprecise subjective judgments.\u00a0 SportArb failed prematurely apparently due to non-technical problems beyond their control.\u00a0 In the case of AurumBank<\/a>, we have to ask ourselves whether they are setting themselves up for failure as well.\u00a0 Or, is the company just hoping that investors will never choose the compounding option offered on their website?<\/p>\n

This is the end of this rather long-winded article.\u00a0 I hope that it has offered you some \u201cinsights\u201d as to how the compounding process works\u2026<\/p>\n

*********************<\/p>\n

If you like this article, please share it by using the social media buttons below<\/p>\n","protected":false},"excerpt":{"rendered":"

Compounding on Your Own. In Part 2 of this article, we discussed both the influence of interest rate and the length of the investment term on the profitability of compounding.\u00a0 There were really no surprises … HYIP Insights #11 — Is Compounding a Miracle or a Monster? Part 3<\/span>Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":311,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[106,57,10,107,53,90,91,103,97,40],"class_list":["post-1061","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-hyip-insights","tag-compounding","tag-honest-hyip","tag-hyip","tag-hyip-compounding","tag-hyip-insights","tag-hyip-interest","tag-hyip-interest-rates","tag-hyip-update","tag-hyips","tag-instant-hyip-updates","exalt-entry"],"yoast_head":"\nHYIP Insights #11 - Is Compounding a Miracle or a Monster? 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