Reality Check
When looking at whether an investment opportunity is genuine, you should also consider the plausibility of the "big picture". TIRN was supposedly paying out returns as high as 22% per month. Presumably that would mean they were earning a (much) higher rate than that. But let's assume for the moment that they really were a caring bunch of generous folk who were operating as a non-profit organization, and they were earning "only" 22% on their investments and then passing it along to their investors. That means if they didn't have to deal with other investors they could have been earning 22% each month on their OWN money. I don't know how many were involved in the whole TIRN operation, but since there were 6 people named in the CFTC complaint I would bet they could have managed to scrape together at least $100,000 between them. If instead of scamming the public with elaborate hotel presentations they had simply traded their own accounts, what kind of returns would they have seen?
Here's a copy of an Excel spreadsheet showing what their $100,000 initial investment earning 22% per month would have returned to them over the course of 7 years, broken out by quarter (this is just a simple compounding table of $100,000*1.22^[month number]):
Years Months 22.00%
0.00 0 $100,000
0.25 3 $181,585
0.50 6 $329,730
0.75 9 $598,740
1.00 12 $1,087,221
1.25 15 $1,974,229
1.50 18 $3,584,899
1.75 21 $6,509,632
2.00 24 $11,820,502
2.25 27 $21,464,236
2.50 30 $38,975,789
2.75 33 $70,774,109
3.00 36 $128,515,025
3.25 39 $233,363,751
3.50 42 $423,753,100
3.75 45 $769,471,219
4.00 48 $1,397,242,774
4.25 51 $2,537,180,497
4.50 54 $4,607,134,132
4.75 57 $8,365,855,299
5.00 60 $15,191,121,612
5.25 63 $27,584,767,797
5.50 66 $50,089,745,435
5.75 69 $90,955,364,069
6.00 72 $165,161,115,933
6.25 75 $299,907,482,045
6.50 78 $544,586,401,457
6.75 81 $988,886,127,913
7.00 84 $1,795,666,897,599
If TIRN had simply invested their own $100,000 they could have made $11.8 MILLION in 2 years... $1.4 BILLION in 4 years... $1.8 TRILLION in 7 years (and if they started out with $1 Million instead of $100K, just multiply each of the above dollar amounts by 10.) So a question you might ask yourself when evaluating an "opportunity" like this is, "If this company can achieve these kinds of returns, why do they need ME?!" If every person in this organization could become a MULTI-BILLIONAIRE in just a few years by trading their own account (legally and with far less effort and hassle!), why in the world are they going to the trouble and expense of trying to attract outside investors?
Anyway, food for thought :^>
