Fri Feb 25, 2005 7:50 pm Post subject: 2% Where does the Money Come From? Reply with quote2% Where does the Money come from?
Your funding of the PIPS accounts is NOT investments, but loans to PIPS from a legal standpoint. When you deposit funds into the 2% program you are depositing 1 – $25 unit on a Trust Account Debenture. Each $25 trust debenture unit has a life of 6 months. Over that 6 months your Loan pays you a total of $59.85. $59.85 returned – $25.00 Loaned = a profit of $34.85 for each $25.00 Loaned. Growth comes from compounding by re-loaning a portion of your returns. This means that you loan the $25 to PIPS, we invest it and give you a return of 2% per trading day. Interest on loans is taxable at a lower rate than investment returns. PIPS is an outgrowth of the 2% program which began in May of 2003. In the 2% program, one had to do all reloans manually while this function is automated for the membership in PIPS.Within the actual PIPS investment fund, 60% is PIPS money, 40% members and depositors’ money. PIPS trades with a 12 to 1 margin so only 0.075% is all that is really needed for the return o
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