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FIB - Scams 101 - Ye Olde Archives
Posted By: Savage In Response To: HUH??? (MaaMaw)
Sunday, 23 January 2005, at 9:08 a.m.
You're Exsqueezed.
Here's the deal. The recruiting site I looked at stated that the average return per session to an investor was 3.5% I used 3% to allow for bad trades. They also said it ammounts to 15% interest on your money per month, compounded. That would be compounded weekly of course if you re-invested principal and interest weekly into another trade.
I rounded down in the following examples to give them every benefit of the doubt.
Using $100 to make the illustration a little easier to follow we have:
$100 returning 3% over 6 days session = $103
$103 = $106
$106 = $109
$109 = $112
$112 = $115
$115 = $119
So what do we have? They claim an average of %3.5 and I used %3. They claim 15% interest on your money monthly and at half a percent less than their claimed average interest per trade I get 19%. So using less than their stated average per session I get more than their stated average monthly return.
Let's try it this way. Let's say we actively trade every 6 days, not missing a one. Let's further assume that we actually get 15% interest per month, compounded.
First month=$115
2nd " =$132
3rd " =$152
4th " =$175
5th " =$201
Gloriosky!! We double our money in 5 months!
Let's make it easier on ourselves and make the assumption that this will, as they keep telling us, continue. Let's use 5 years as before.
There are 60 months in a five year period. 60 months divided by the 5 month period it takes us to double our money equals 12. So, in five years we get to double up 12 times.
MaaMaw's $35 doubled 12 times over 5 years.
1st 5 month period = $70
2nd " = $140
3rd " = $280
4th " = $560
5th " " $1120
6th " = $2240
7th " = $4480
8th " = $8960
9th " = $17,920
10th " = $35,840
11th " = $71,680
12th " = $143,360
Well gee, the magic of compound interest huh? I suspect it would actually be a little more than this but I'm not going to sit here and figure it all out session by session using the actual number compound interest would give. Simply using the fact that you double up every 5 months makes the point.
Notice how you have to leave the whole ammount in over the 5 year period? IF 500 people also invested a measly $35 and never touched it, their collective account would be valued at about $71,500,000. That's 71 million five hundred thousand dollars! All that from a collective $17,500! But they all would have to leave ALL their principal and interest in the hands of dxgold for five years. Assuming this is all on the up and up that's an awful lot of faith and trust being expressed in a company located where you can't get at 'em if they do ya wrong! Well, here endeth the editorial. ( for now anyhow)
MaaMaw, I hope this explains what led me to the numbers that kinda boggled you.
> Exsqueeze me??
> Me too.
> I don't do higher math, and I **never** compound anything (except
> problems) -- but I don't understand how you're getting from $35 to
> $140,000.
> Without even trying to figure it out because I knew it was futile, my HOPE
> was that in 2 years I might have $1,500 in there.
> My biggest concern has been the FBI kicking in my door. I don't get it --
> don't pretend to -- just wanted to try it with my whopping $35 and see
> what happens.
> I didn't check with the FTC on this one because it was Christmas money and
> I decided I could risk it and see what happened.... but I'm headed over
> there now.
> Insanity??
> A "Kick Me Again" personality disorder??
> Nope. It didn't, but thanx for asking.
> I don't know why that happens occasionally. I see another post showed up
> twice (which also happens sometimes.) It usually straightens itself out.
> Luv,
> MaaMaw
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