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| HYIP stands for "High Yield Investment Program". Most of these investments focus primarily on FOREX markets. These types of investments yield much higher returns on your money than the standard investment (such as mutual fund, savings account, stocks and bonds, ect.) but also come with a much higher risk of losing your money. HYIP's have been around for decades but up until recently, were only available to the ultra rich, mainly because of the high minimums required to invest.(Most starting at 2 mil.) There are a few pooled funds that are legitimate opportunities for the average investor. However, be aware that most High yield investments are ponzis and scams. |
| Yes and no. There are HYIP's that are legitimate but over 99% of the HYIP's you will encounter online will be out and out scams. However, even with the scam sites, there is a potential to earn although this should be considered a game rather than investment. The key is learning how to work it and to not let your greed become a decisive factor in your decisions. |
| Can I earn a living by investing in HYIP's? |
| Again, yes and no. The biggest problem with investing with HYIP's is understanding the level of risk. While in most traditional investments, you will likely earn up to 15%/year max, with HYIP's the earning potential can easily double this in a year and in some, even pay back 200%+/year. These numbers are for the legitimate HYIP's. In the "scams", the earning potential is much higher, some as much as 200% in a month but the volatility is too great to invest a large sum of money. |
| If 99% of HYIP's online are scams, why should I even bother to invest? |
| While it is true that 99% of HYIP's are scams, a frugal person can make money, even with HYIP scams. Some HYIP sites will last 3-10 months even when they are paying 2-3% daily. If you were to invest $100 into one of these sites, you would have the potential to earn 272% to 440% even after you have pulled your original investment out. However, this is a gamble, very much like going to the casino. You can never be sure exactly when an HYIP scam site will decide to pull the plug and disappear with your money. The legitimate HYIP's are another story altogether. The only way that you can lose with the legitimate HYIP's is if they do poorly on their trades. |
| I have heard that you can make money by playing the scams. Is this true? |
| Yes, it is true. You can make money but consider this to be a form of gambling and understand that you will lose at times and win at times. There are many who play the ponzis exclusively, focusing on the short term high percentage sites. They do this by recognizing these types of HYIP's early on and use a "get in get out" strategy. This comes with an ultra high risk as many of these types of HYIP's never pay out in the first place. Personally, I stay away from this type of gamble most of the time. |
| When someone says that an HYIP is a ponzi, they are basically saying that the HYIP is paying older investors with newly invested money. A ponzi can sustain only as long as the "new" money coming in is more than the "old" money going out. To find out more about Ponzis, click here. |
| Compounding. Einstein once wrote that the most powerful thing he ever discovered in this world was compound interest. He was right. Compound interest, even monthly, is a very powerful thing. To illustrate, you have invested 1,000 dollars in a site that offers 30% monthly with the ability to compound. In just 12 months, that 1,000 dollar amount will grow to almost $18,000! Now, most newbies will become entranced with the big numbers of the future and that is exactly what scam sites want you to do. With the exception of a handful of sites, most sites will not even make it to month six, forget about making it to a year. In other words, don't get too starry eyed when you are looking at the big numbers. Start small, collect monthly, get back your principal and then compound if you want. I personally hardly ever compound as I know that these types of investments can be going great and suddenly disappear overnight. |
| If my HYIP account says I have this amount in it, then I have this amount of money." A lot of newbies just assume that because the site they are invested in shows money in their account, then they must have money in their account. This might be true. Then again, it might not. The money is not yours if it is not in your hands. Take that to the bank. Until the money is in your hands, it is just a blip on your computer screen. If I had a dollar for every person who posted in the forums that they were "paid" but didn't have the money in their e-currency account, I would have.....well, I would have alot of dollars. |
| Relying too heavily on forum members for suggestions. This is bad for two reasons- First, there are a lot of forum members that want you to join under them for the referral fee they will collect from you. Not all forum members are like this, but there is a good number who are. In fact, there are people out there that make a nice chunk of change by whoring out their referral links. A lot of times these people don't have anything invested in the sites they are recommending. Second, there is absolutely noone who honestly knows how long a site will be around. An HYIP will be cruising along and be on everyone's list one day, then disappear the next. It happens all the time. Use your brain, learn how to do due diligence, use other people's opinions as a secondary source, watch the forums for warning signs. |
| Using HYIP monitors as sources of information Many people are introduced to HYIP's through these monitors. A good portion of these monitoring sites are run by scammers themselves, who get kickbacks from the HYIP sites themselves. Even the legitimate sites are vulnerable. A lot of times HYIP's will continue to pay the monitoring sites while stiffing the average joe investors. What does that mean? It means that that number one paying site on the HYIP monitoring site you are visiting might not have been paying for weeks. Don't be sucker. |
| Not diversifying or diversifying in only the high risk stuff- I know everyone has heard how important it is to diversify. I have added a twist to this. Not only should you diversify, but if you are going to play some of the probable ponzi type of HYIP's, then you also need to spread your risk out to the legitimate HYIP's out there as well. What? 10% a month not enough for you? Take a look at what a savings account will earn you in a year. Yea, now go and invest in some of the real HYIPs. |
| Greed. When someone first discovers HYIP's 10% a month seems absolutely incredible. This soon changes very quickly as they get used to 2% daily or 100% monthly. Keep your about you. Realize that even small returns are great, compound only if you are certain that the HYIP is legitimate. |
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