HYIP, which stands for High Yield Investment Program is just what it sounds like, a program offering a high yield investment. HYIP's are offering probably the most profitable investments available today. Interest rates of up to 100% a monthis not uncommon. In general the interest rates are ranging anywhere between 5 – 250% a month.
HYIP's are using different investment strategies. Some invest in stocks, others in property. There are even HYIPs investing in other HYIPs. Probably there are also programs that are not investing at all. These belong to the scammers. You’ll read more about unserious HYIPs further down this text.
Most HYIP's use different e-currencies as their way of accepting funds from members. E-gold is undoubtedly the most commonly used one hence the many program names containing “Gold” or “E-gold”. E-currencies makes instant and secure money transfers possible online and have very much paved the way for HYIP's.
The phenomenon of Hyips is growing bigger and bigger on the internet today. Every day new programs are being launched. Lots of people are earning fortunes investing in these programs.
Sounds too good to be true?
Well, while the statements above are not lies, they don’t give you the whole picture. Many program owners are scammers. Their only will is to run with your money. There are more scams out there than serious long term programs.Over the years large amounts of people have lost their money as a result of being involved in High Yield Investment Programs.
Given the fact that the HYIP industry is a very risky one, most people are very hesitant when it comes to investing in HYIP's – which is legitimate. However, not being aware of the risks is the main reason why people are losing their money. There is a great number of cases where people have thought they’ve found an incredible opportunity and gladly invested their entire fortune. When the programs later went out of business, the consequences have been devastating.
Although there are unserious players in all markets, the HYIP arena seem to have more of them than many other industries. The reason for this is the big amounts of money involved and the fact that it’s pretty easy to steal money on the net.
Taking both the negative and positive aspects of High Yield Investments into consideration, the conclusion is; If done right, High Yield Investments can be extremely lucrative.
This is where we come into play. We are constantly studying and researching the market. We are also investing in a number of HYIP's to be able to analyze them and keep track of their payments.
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What is HYIP?
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Mike Wilks
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6/29/2008 06:24:00 AM
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High Yield Investment Program
From Wikipedia,the free encyclopediawww
A High Yield Investment Program, or HYIP, is a purported investment program normally offered via the Internet. HYIPs typically accept investments of $100 or less while promising high returns. The introduction of e-currencies such as e-gold and StormPay (although almost all HYIPs do not use StormPay as of February 2006, see StormPay article for why) has made it easy for HYIPs to operate across international boundaries, and to accept large numbers of small investments.
No HYIP has, as yet, survived for very long without it turning out to be a scam. Scam HYIPs are Ponzi schemes, in which new investors (usually unwittingly) provide the cash to pay a profit to existing investors, which they could then withdraw leaving nothing to pay the new investor. This approach allows the scam to continue as long as new investors are found and/or old investors leave their money in the scheme, known as compounding (because even higher profits are promised).
HYIPs are frequently advertised in spam emails, forums or mailing lists, since people are typically given a commission (for example, 9% of invested funds) when they provide a referral of a new customer.
HYIPs typically are not based in the United States, Europe, or Japan - places that have strong laws against unregistered investment programs. HYIPs disclose little or no detail about the principals, management, location, or other aspects of whom is getting the money to be invested, and relatively little information (other than asserting that they do various types of trading on various stock and other exchanges) on how their investment programs actually work.
The largest HYIP scam that has ever existed is PIPS (People in Profit System or Pure Investors)[1], [2]. The investment scheme was started by an engineer, Bryan Marsden, in 2004 (according to the Wayback Machine record of http://pureinvestor.com) and spanned more than 20 countries in the world. PIPS was investigated by Bank Negara Malaysia which resulted in Marsden and his wife being charged in a Malaysian court with 41 counts of money laundering involving more than RM26 million [3].
According to a website, HYIP Scam Search, that maintains a database of HYIP scams daily, as at May of 2006, the total number of HYIP scams was approximately 3500. This is the total number of scams occurred from 2004 to 2006 and excluding scams not reported. About 5 new scams are reported every day. 89% of the scams preferred e-gold as their online payment processor[4].
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Investing in HYIP. Risks
For a private investor almost all options for risk-free investing are closed. That means, if someone wants to invest money and soon get high incomes from the investment, he/she will risk anyway. You can, of course, deposit your money with a bank, but the private investor rarely has enough initial capital to make a fortune out of the bank interests. That is why the only way out is to invest your money into high yield risky projects.
You should always be careful about the programs connected with risk. First of all you should do your best not to engage into false project or financial pyramid. You have to carefully study all program features and only after that start investing.
The situation gets more complicated because even the trustworthy projects fail sometimes. It happens, for example, when program leaders did not manage to promote their program right or played fair on the currency market risking all their funds.
There is a number of rules and peculiarities by studying which the private investor gets the possibility to minimize the risk. Let us consider them in more detail.
The nature of the high yield income programs is such that almost all of them terminate their activity someday. Pyramids programs fail losing all clients investments, serious HYIP paying off to their investors come to an end. Surely, all honest projects are developed in a very accurate manner and designed for a maximally long functioning term. But often the closure is connected with the objective economic reasons that are very hard to eliminate.
A standard living cycle of high yield income projects comprises four stages: pay-back period, period of growth, period of saturation and descent period. Here they are in detail.
Pay-back period is the birth of the project. The creators of any HYIP invest some money into it. First of all, they are needed for creating a well-functioning and nice web-site, for content development, registration in paid rating systems and for advertisement. It all costs money and as the project does not bring any profit yet the period is always loss-making. One cannot assess the reliability of the project during this period; however, there may be some indirect signs that the project is a fraud. For example, when the web-site is hosted free of charge and all content is stolen from some other web-site, it is intended to collect money and close itself.
Growth period is the beginning of projects functioning. During this period the investors appear who try to attract additional clients with a view to get the referral payments. At some moment the project comes over the point of self-sufficiency and starts bringing the real profit. The project success at the stage depends on the scope of methods applied for attracting the clients. A direct sign that the organizers plan to further support the program are the various strategic actions such as extra money to the account of everyone who register in the project, for example.
Period of saturation is the most stable period in HYIP functioning. During this time the investment flow has stable growth, the program brings maximal profit and clients receive their interests regularly.
Descent period is a determining stage for further programs life. It is characterized by the fact that the users lose their interest to the project, the flow of new investments fall and the program ends its development. All false projects terminate their activity few days after they enter the descent period, they dont pay to their clients and disappear with no trace. Creators of trustworthy programs undertake measures trying to bring their projects out of the stagnation.
Investing in HYIP.
How the profit is formed?
Many prospective participants of high yield income projects think about where the organizers take such big money that they can regularly pay very serious interests. Incomes, surely, do not come from nothing. In serious HYIP experiences managers, professionals developing and realizing many high income projects work over the effective investment schemes.
So the main sources of incomes in High Yield Income Programs are the following:
1. Investments in FOREX market.
2. Trading of stock of different companies on international stock exchanges.
3. Participation in different commercial sweepstakes.
4. Investing into high-yield business
5. Import and export of scarce goods.
That means, actually by accumulating money of the participants, the programs leaders use them as their floating assets. Then by investing in high-yield projects and actively using the off-shore status they create the profit not subject to taxation. As the result there are sums enough to support the HYIP activity and to pay charges to the investors, as well as to further expansion of the program.
People distant from complex economic processes may think it is unreal that over a month the amount of the investment may double or even triple. An experienced investor always may predict which investment will bring profit and which will not. Having wide knowledge and serious experience he/she is able to easily make profit from price fluctuations to some goods.
Many investors have made huge fortunes on the currencies rate fluctuations. Trader who knows the specifics of currency market over just few hours may double the invested capital. For example, trader has 100$ and he/she is going to speculate for Euro fall and long for Dollar. Trader takes 9900$ no-interest credit and sales 10000. Then he/she buys Euro at the rate 0.9755 and in a few hours resells it at the rate 0.9845. Then he/she pays off 9900 to the broker and the pure profit of the investor is 90$. So the deposit increases 90% less than in 24 hours.
Surely, for an inexperienced investor an attempt to play for currency rates fluctuations may result in financial crash. Instead of prospected profit he/she will bear significant damage. Actually, the role of all high yield income programs is to create some initial fund of money from investors contributions and then using various economic schemes to distribute it among profitable projects. Within HYIP there is no industrial processes, projects managers do not just manage your capital but help you to multiply it. HYIP is an agent between a private investor who does not have possibilities and knowledge to effectively play on the market fluctuations and high yield economic formations.
Of course, besides for the currency rate play there are many other effective methods to invest money, for example, buying securities of organizations which work well in the developing countries. Such financial instruments are risky but the risk is compensated by their high profitability. Besides the HYIP leaders prefer to reinsure and place the part of the invested funds into securities of the highly reliable companies.
Good HYIP will never lie to its clients because high yield income programs are an ideal example of mutually beneficial cooperation. By effective management of the investors capital the program organizers get enough income to pay interests to the investors and have profit on their own.
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