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Maximizing Growth/Where should I set my Percentage?


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Grateful
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PostPosted: Sun Nov 28, 2004 6:13 pm Post subject: Maximizing Growth/Where should I set my Percentage? Reply with quote
INDEX HERE
What is the minimal percentage reinvestment assuring that total number of active units continue to grow ?

How it Breaks down By Percentage according to the Simulator Only. Actual figures will vary, but should be close. This assumes that you are starting at the percentage from day one and continueing without change. You can change the percentage in your PIPS account at any time.

With 0% ReInvested your $450 will Build to and earn $153 starting on your 7th month forever.
If you set your percentage to 100/0 until month 13 then switched to 0/100
Your withdrawal would be $8145 but by month 19 would have shrunk to $661 and on your 36th month $661

With 10% ReInvested your $450 will Build to and earn $153 starting on your 7th month forever.
If you set your percentage to 100/0 until month 13 then switched to 10/90
Your withdrawal would be $7470 but by month 24 would have shrunk to $1044 and on your 36th month $901

With 20% ReInvested your $450 will Build to and earn $221 starting on your 14th month forever.
If you set your percentage to 100/0 until month 13 then switched to 20/80
Your withdrawal would be $6770 but by month 24 would have shrunk to $2014 and on your 36th month $1,434

With 30% ReInvested your $450 will Build to and earn $1430 starting on your 29th month and it will go up and down, but not much higher than that forever.
If you set your percentage to 100/0 until month 13 then switched to 30/70
Your withdrawal would be $6039 but by month 24 would have shrunk to $3979 and on your 36th month $3,381

With 40% ReInvested your $450 will Build to and earn $328 on the 12th month, and continue to grow to $640 the 24th month and continue to grow to $5494 on the 36th month, and will continue to grow at 40% reInvestment unless changed.
If you set your percentage to 100/0 until month 13 then switched to 40/60
Your withdrawal would be $5278 but by month 24 would have grown to $7258 and on your 36th month $10,115

With 50% ReInvested your $450 will Build to and earn $409 on the 12th month, and continue to grow $1316 on the 24th month, and continue to grow to $8455 on the 36th month, and continue to grow at 50% reInvestment unless changed.
If you set your percentage to 100/0 until month 13 then switched to 50/50
Your withdrawal would be $4,486 but by month 24 would have grown to $12,196 and on your 36th month $33,182

With 60% ReInvested your $450 will Build to and earn $485 on the 12th month, and continue to grow to $2866 on the 24th month, and continue to grow to $22,308 on the 36th month, and contue to grow at 60% reInvestment unless changed.
If you set your percentage to 100/0 until month 13 then switched to 60/40
Your withdrawal would be $3659 but by month 24 would have grown to $18728 and on your 36th month $101,616

With 70% ReInvested your $450 will Build to and earn $560 on the 12th month, and continue to grow to $6157 on the 24th month, and continue to grow to $79,532 on the 36th month, and continue to grow at 70% reInvestment unless changed.
If you set your percentage to 100/0 until month 13 then switched to 70/30
Your withdrawal would be $2799 but by month 24 would have grown to $25980 and on your 36th month $275,034

With 80% ReInvested your $450 will Build to and earn $581 on the 12th month, and continue to grow to $11,763 on th 24th month, and continue to grow to $251,274 on the 36th month, and continue to grow at 80% reInvestment unless changed.
If you set your percentage to 100/0 until month 13 then switched to 80/20
Your withdrawal would be $1903 but by month 24 would have grown to $31066 and on your 36th month $622,696

With 90% ReInvested your $450 will Build to and earn $431 on the 12th month, and continue to grow to $15,844 on the 24th month, and contue to grow to $599,800 on the 36th month, and contine to grow at 90% reInvestment unless changed.
If you set your percentage to 100/0 until month 13 then switched to 90/10
Your withdrawal would be $971 but by month 24 would have grown to $27,199 and on your 36th month $1,003,060

These are only examples, what you decide to do is your choice. That is the Beauty of PIPS. Disclaimer: All Numbers were taken from a simulator and Neither the this moderator or PIPS assumes responsibilty for the accuracy of the numbers presented. Do your own calculations

Torben wrote:
Just want to clarify: The 43% is an average based on average 21 trading days per month. Some months the point could be lower and some months higher.
Also remember, that during the first 6 months your account will grow even at 0% because of the automatic addition of 6 units per month. But after the 6th month these units will start to expire, and from that point just ensure, that the account never goes below 36 units = $900 invested.

Try out the various simulators to find your own plan. I have one entirely online for rough projections and an accurate in a spreadsheet. Both can be accessed from http://www.jollypipster.com. Select 'Simulator' button and proceed from there.

Please enjoy Wink

/torben Cool


bburwood wrote:
This is what I was going to write first:
"This result seems very strange to me. If you are reinvesting 10% of your returns, then it should grow indefinitely, just the same as if you set it at 60%. It doesn't make sense for it not to grow!"

I wasn't taking into account the effect of expiring units of course!

I've just been playing with Torben's simulator (nice work Torben Very Happy ) using a minimal fully funded account, and it is setting me straight. If you're starting with a bare minimum $450 account and want it to really do anything, other than sit there at an eventual constant level, then 50% reinvest would be the minimum to set it at for continued growth.

I even tried an account with an extra $100,000 just to see what would happen and even at 40% the unit balance is still decreasing at the end of 3 years! Granted you've drawn out over $1.1Million by then, but the balance is still *decreasing*! The same account set to 50% is still growing by about $4000 a day AND you've pulled out almost $4Million by the end of the 3 years of the simulator! At 60% it's growing by over 3000 UNITS A DAY, and you've pulled out over $16Million! At 70% you are pulling out over $600,000 A DAY Shocked by the end of 3 years and over $67Million withdrawn! Shocked At 80% and 90% I couldn't read any of the major columns column due to too many digits in them!! (and not being able to resize it)

So basically anything less than 50% is not going to grow your account by anything significant and will probably decrease your balance (in the long term) if you've put significant extra in it. So setting it less than 50% then is really only useful for getting cash out faster for a short period before setting it higher again.

I will probably end up setting mine to 70% or 80% reinvest eventually, which will make for very nice growth in both unit balance AND payouts as well.

bb from Oz.



If you are alternating percentages every week.

90/10 10%x5=50% on the 5th day
80/20 20%x5=100 1 day on 100% on the 5th day
70/30 30%x5=150 1 day at 100% & 1 day at 50%
60/40 40%x5=200 2 days AT 100%
50/50 50%X5=250 2 days at 100% & 1 day at 50%
40/60 60%x5=300 3 days at 100%
30/70 70%x5=350 3 days at 100% & 1 day at 50%
20/80 80%x5=400 4 days at 100%
10/90 90%x5=450 4 days at 100% & 1 day at 50%
0/100 is of course 5 days at 100%

First number being reinvestment and last AF

Last edited by Grateful on Thu Apr 28, 2005 5:48 pm; edited 6 times in total
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PostPosted: Tue Dec 07, 2004 6:40 am Post subject: Reply with quote
sundari wrote:
turtlegazer wrote:

Can all of us withdraw 100k a month when our time comes?


Hi turtlegazer,
Nice to see you on forums. Very Happy

Ther're many possibilities!

Arrow For a fully funded account without any additional investments and if you're willing to leave your account at 100%-0% for 23 months then you'll get more than what you're expecting now. Laughing Laughing




Arrow For a fully funded account with an additional investment of $450, and if you're willing to leave your account at 100%-0% for 20 months then you'll get more than what you're expecting now. Laughing Laughing




But no one will wait for such a long term..... Wink

Regards,
Sundari.
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PostPosted: Wed Dec 08, 2004 3:53 am Post subject: Reply with quote
mivto wrote:
It is a good question and unfortunately you will find few posts in this forum about this question, which is very strange. I have been in PIPS since Febr. 2004 and it took me some months to find out, that I made a 'mistake', partly because the simulator brings you to think in diff. percentages of re-investment (you can set this percentage in Members Hot Function, Edit Profile).

There is no correct answer to the best strategy. It all depends, mainly on 2 questions:

1 How long CAN or WILL you wait, until you withdraw your 'earnings'?
2 How much do you want on a certain date?

The re-investment % should either be 0 or 100, and not in between. Let us say, you want to withdraw 2.000. Keep an eye on your daily ROI or use one of the calculators like this one http://jollypipster.com/calculator.asp

This is just an example, but one day your daily ROI will be around $200. Now you set re-investerment to 0% and your daily ROI will go into Avaiable Funds (AF). After 10 days, you have 2.000 in AF. You then transfer these 2.000 to your Picpay account and from here to your bank, cheque or Debit Card. And at the same time you set the re-invest % back to 100, until you want to withdraw for the second time.

Or you wait a little longer, until your daily ROI is higher, then you need fewer days to get your 2.000, or you wait very much longer and your daily ROI is 2.000. The question is always: How long time CAN and WILL you wait, until you withdraw? All of us have seen the larger numbers after x months or years. The problem is only: Can you wait that long?

You will have to find a 'compromise'. You want your money to grow fast AND you want some cash some time. Yes, it is a kind of game.

Why not 20% or 80%?
Simple: some of the money in AF are being held there too long without being a benefit to you: Either you want your money to grow, or you want them cash as fast as possible. There are no other options!

I hope, this helped?


Note: There are always exceptions. Some people can't change the % often and it is best to leave at a set % to avoid problems. Each person's situation is different. Each can make the correct choice for their own situation.

If in a Relationship:
It may be best to open two $450 accounts; one for each of you. This way you can both enjoy the benefits of the accounts, but if something goes wrong with your relationship at some point in the future, it is much easier on both of you. (Not saying that your relationship won't last, but it is better to be practical and not base things on emotions when it comes to money) Very Happy

Last edited by Grateful on Mon May 16, 2005 12:40 pm; edited 1 time in total
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PostPosted: Thu Dec 23, 2004 6:12 pm Post subject: Reply with quote
TORBEN's Investment Strategies

Torben wrote:
I have spent some time making a couple of calculations on this.
And in my opinion there is no doubt, that some kind of variation of the 100/0 swapping scheme is preferred to a constant partly reinvestment of the daily ROI.

In the following example I have used the following asumptions and parameters.

- A basic Fully Funded PIPS ($450) without any additional investment and started at PIPS launch, Febr. 15th
- The first 6 months at 100% reinvestment, thereafter an AVERAGE 60% reinvest/40% withdraw strategy
- Withdrawal to be made once each month on the 16th BEFORE the addition of 6 new units. I prefer only to withdraw once a month to limit fees.
- The calculations are made for an 18 months period ... from start of month 7 to end of month 24.

There are 3 scenarios in the following table:
Plan 1: After the 6th month the account is set at a constant 60% reinvest/40% withdraw.
Plan 2: The account is set at 100% reinvest from the beginning of the month, and then changed to 0% reinvest for as many days required to accumulate approximately the same withdrawable amount at the end of the month as in Plan 1.
Plan 3: The account is set at 100% reinvest from the beginning of the month, and then changed to 0% reinvest for the last 8 trading days in the month, which is the closest to the 40% withdraw.



Take a very good look at the table Wink Especially I would like you to notice the number of units invested totally at the end of month 24 in each of the 3 plans Shocked Shocked Shocked