HYIPs are programs which pool together the funds with their members - hyips
to make the most of investment opportunities, like stock trading
and foreign currency (FOREX) trading amongst others. These HYIPs
attract funds from members (known as "deposits" or "principal") by
promising high rates of great interest payments, which explain why they
are termed "High Yield Investment Programs". Naturally, the larger
the promised monthly interest, the higher the risk borne by the members.
This really is because of the fact that HYIPs repay their members from the - hyips
returns on their own investments. Therefore, it is actually feasible for the
payouts to exceed the HYIP's own returns, especially when the pace
of interest payment is high. If such a situation persists, the
closure from the program could be inevitable and members will stand
to get rid of their principals.
Scams
A gimmick is a fraudulent business scheme and also this is rampant among
HYIPs. Some HYIP owners abuse the trust with their members by
misrepresenting for them about their investment strategy, once they
have NONE. Consequently, they will eventually exhaust money to
pay their members and many of them just disappear into cyberspace,
along with members' money. Therefore, we hope to
educate readers by offering our humble advices on minimizing the
possibility of being cheated.
Ponzi Schemes
This can be named after Charles Ponzi, an Italian who migrated to
america and became one of the greatest swindlers in
American history. His aliases include Charles Ponei, Charles P.
Bianchi, and Carlo. If you are paying off initial investors with money
taken from the later investors, Charles Ponzi were able to
swindle $15 million from 40,000 investors from 1919 to 1920.
This is the way the term "Ponzi Scheme" was coined. You need to be
mindful of the reality that some HYIPs are actually pure Ponzi Schemes.
My Advice
1. Never join any HYIP that pays greater than 3% interest daily as
it is difficult to purchase this type of high payout regularly.
2. Always perform a Due Diligence check on the program.
3. Tune in to what fellow investors need to say concerning the program
in the various hyip forums. See if it really has been paying its members.
4. Diversify your funds by making deposits in several reliable
programs. This reduces the chance of loss you are bearing. Even if
one program shuts down, you still need other programs as back-ups
so that you can recoup your losses from.
5. Determine the coherency from the program's investment strategy.
if and about they hav, find out if the owners know what they may be talking about ande
a solid business plan.
6. It is really not advisable to enroll in a program which uses poor language
on its website. if the program has thousands of dollars of deposits
they will be able to afford to spend several hundred to hire a
professional publicistd Alternatively, at least someone with a decent command
of English to instill confidence among investors.
7. Just because this system is paying does not mean they will likely
carry on and. Decide on your own how long more the program can
sustain and whether it be likely that you should produce a profit.
8. Always read the FAQs and also the terms of payment carefully.
You may discover some terms which can put you in an extremely unfavourable
position.
9. Invest only what you are willing to lose. Expect the worst
but hope to find the best. Be conservative when calculating your profits.
Perform a scenario analysis. This can place you in the correct frame of
mind when deciding the exact amount to deposit with a program.
10. Usually do not compound your interest till you have earned your deposit
back. This reduces the chance of you losing money as some
programs usually do not survive for very long, particularly those without sound
business plans.
