Yes it IS 100% true. I admit that if the daily percentage drops down to .9% or less, growth will stop and even shrink, I've mentioned that on this thread.
If the rate drops below 1.12% you cannot recover your money with a 100% cashout if you have no affiliates signed up. If you have affiliates under you who are not cashing out but are re-buying more bids, then you can survive a slightly lower rate.
Since the points expire, and there is no way to withdraw your entire balance (like if you were investing in a HYIP), you are at full mercy of whatever the company decides to give for profit share.
The people who get in early (like any HYIP) ride a good rate for as long as the cash flow is positive. When the cash flow recedes, or in this case the profits relative to affiliates result in an average rate below 1.12%, you take a haircut on your point balance. If you've already double or tripled your balance, you will still cash out a good chunk of it and be profitable, but the gravy train ends at that point.
The claim of making "daily profit" is a little misleading in that you start out with a deficit balance. The points that you buy in cannot be withdrawn except over a 90-day period, a few % points per day, and not guaranteed to be above 1.12%.
Practically speaking, it will be hard to entice others to join unless the rate stays above 1.4%. Any income projects and point balance spreadsheets (all now disallowed by company's compliance dept) will not look very impressive unless you can show an average rate above 1.4%.
Realistically, if you put on your economics cap, how can the company continue to share such a high rate, especially as everyone's point balance keeps growing? The incoming retail profit has to peak at some point and when the balance between ever-compounding affiliate balances surpasses legitimate retail profits, the rate will drop. My prediction is the rate will drop suddenly, there will be the "sky is falling" mentality and everyone will start moving to to a higher cash ratio. This will impact profits even further, the rate will drop more, and you will start seeing 0.5% rate.
Did you know that at a 0.5% daily profit-share rate, after 90-days when your points expire, you've taken a 55% haircut on your balance? If your point balance is 1000 and the rate averages 0.5% over 90-days, and you move to 100% cash, you cash out $450.
However, you are basing all your statements on the assumption that the daily percentage will go down. You state "Up until now..." and "when the daily profit share drops, the jig is up." What has changed? The new compliance rules?
Firstly, I am basing my statement on the reality that the company cannot continue to offer profit share at the same rate, when the growth of affiliate point balance is out of balance with retail bid purchase.
The scales will tip, it's just basic economics. If you can't see how compounded daily interest, plus the incoming rush of MLM affiliates, will not dilute the profit share, you perhaps are being too optimistic (no offense intended).
Think about this, why can't you purchase more than a $10k share? Because they need distributed pool so they can manage the daily profit share rate. If the opportunity was that good, why not let me buy a $100k share?
Secondly, I'm basing my assessment on the fact that it's so difficult to buy affiliate VIP bids with a credit card. They don't take credit cards direct anymore (they claim fraud but that seems like a poor excuse to me, especially when they essentially have no cost for bids compared to a retail business like Staples where they ship physical products). So they have to resort to third party processors that live in the world of online gambling, HYIP, and other high risk, sometimes scammy business ventures. AlertPay lost its ability to accept Visa and MC a couple months ago, lost it's ability to accept AMEX last week. Search for AlertPay and see how often they lose their VISA/MC merchants. SolidTrustPay takes forever to verify now (try it and see) and charges a 6.9% + $1.50 fee.
Do you know of any other affiliate or MLM business that in order to participate you had to send in a check (with SSN and drivers license), or a money order/cashier's check and sign a statement saying it's not refundable?
There is risk if you want to "invest" money. If you only want to recruit others your investment will be more time, than money. I would be reluctant to buy in for the full 10k at this point as there's no guarantee you could recoup all of it.
If that is it, I'd say you are being WAY overly pessimistic. They're JUST NOW being inforced and I personally look at it as a positive move.
The vast majority of affiliates promoted the opportunity by doing one of the following: 1) sending out spreadsheets showing how income can grow, 2) talking about compounding interest, 3) showing their backoffice as evidence of compound growth, 4) showing copies of their checks as evidence of profit, 5) showing a copy of Todd Disner's YouTube video where he had account balances between 100 to 400k (depending on which video you saw, before corporate took them down).
I would LOVE to promote this if I could use the above tools. Now you can't do any of the above. It is all illegal.
Plus, now, all online material has to go through compliance. So if I create a blog network to promote this using BHW marketing methods, I have to send all of them through for compliance review first?
Nothing in business is a for sure thing, if one believes differently they are living in a dream world. This is exactly why I recommend to my recuits to always cash out their seed money (unless you don't mind the possibility of loosing it).
Agree with you here, completely. Unfortunately, this opportunity is being promoted as "daily profit" or "guaranteed profits" which is only true if the rate remains high. What's often not talked about is that your points expire in 90-days and that the rate has to remain high to become profitable.
Cashing out your seed money makes complete sense. The problem is you need to build a balance first. So if you join the program, you are betting on it being profitable for at least a few months so you can grow your balance high enough such that you can then switch to an 80/20 or 70/30 withdrawal and recover your money.
Now you could just wait until you hit some level, like 2-3x your initial balance, and then do 100% cashout. The problem there is while you will recover your seed money, your account balance will be so low it will take awhile to grow it back up. But at that point it is "house money", other than your monthly premium subscription which takes 150-days to recover (60-days to convert bonus points to VIP points, then 90-days to withdraw it).
You are posting here like you are saving us or "enlightening us". You're not telling us anything that we don't already know.
Far from it. I'm raising issues that few have mentioned, or haven't mentioned in great detail. For example, in your own reply you mentioned 0.9%. I would hope that as involved as you have been with the program, you've run Excel simulations and knew that the break-even rate based on 90-day points expiration is 1.12%.
I think I brought some value to the discussion. If the rate stays high for a year you guys will all kick butt. If it comes crashing down in a month or lack of credit card processing stifles growth, I've raised some good points. At minimum, any new affiliate joining should at least know about the credit card issues.
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