HYIP-A Lucrative Investment or Scam?
May 18th, 2008 by Kaushik Adhikary
Image from FlickrA savvy investor or stock trader is familiar with calculated guess or speculation. They make a decision basing on the analysis of the market risks associated with the choosy company. Sometimes they buy stocks on tips passing from an market expert.
Whatever is the stories, the ground reality is that investors or traders are oftentimes throwing their money away in craps. A few of them actually manage to make some bucks in bull market. This ultimately makes them frustrated and to stop investing in the stock market and move on to the one that looks promising.
Stocks are not the single option or instrument available to the investor to make money from. Sometimes people attract to certain lucrative instrument, such as high yield investment programs (HYIPs) that behave like stocks.
But before I go further, let me introduce you to HYIP and to fully understand the meaning of HYIP.
- What an HYIP is,
- How a HYIP works,
- How to invest in the HYIP, and
- What risks are associated with etc.
1.What is an HYIP?
HYIPs are kind of legitimate (or ponzi?) investment programs that offer high returns on investment (ROI) quickly. HYIP’s are offering probably the most profitable investments available today. Generally the interest rates are ranging anywhere between 5 – 250% a month.
But here a word of caution in any type of investment is- the more you likely to gain, the more you put your money in risks. Its true, HYIP’s are utilizing different investment strategies. Some invest in stocks, others in property. There are even HYIPs investing in other HYIPs that may belong to the scammers and Ponzi scheme .Most HYIP’s use different e-currencies or e-gold as their way of accepting funds from members.
Hyips are growing bigger and bigger on the internet today. Every day newer and newer programs are being launched. Lots of people are earning fortunes investing in these programs. But you’ve to be alert all the time as many program owners are unfortunately scammers.
Given the fact that the HYIP industry is a very risky option, most people are very hesitant when it comes to investing in HYIP’s. However, the ground reality is that some people are losing their money for not being aware of its inherent high risk involvement.
There are two types of HYIPs that are popular online today-
- Where it requires a person to do nothing but simply invest and
- Where it requires a person to view advertisements. Here the operator offers freebie as money or advertising credits to its members for viewing advertisement.
2. How a legitimate HYIP works:
Unfortunately, because of greedy, unscrupulous people, a large percentage of HYIPs out there are scammers. Especially HYIPs not based on advertising revenue are scammers because there is less certainty on where and how funds are being generated. With advertising-based HYIPs, at least one can usually see that they are selling advertising.
However, the scammer HYIPs never publicize how they are generating income streams by other legitimate trading methods, making them a ponzi scheme. So this means that the only way they are generating funds are through new joining members. When new members stop signing up, the scheme the program will collapse.
Okay, so keeping all this in mind how can one distinguish the legitimate HYIP from the typical HYIP which is a scam? Below are some factors which are common to the legitimate HYIP.
- Legitimate HYIP sites will generate revenue from a variety of sources such as new sign-up members. Though these alone are not enough to keep a legitimate HYIP running. This is because when new members stop signing up, the HYIP’s revenue source is gone. So in order an HYIP is legitimate it must sell a service or product or invest in stable trades.
- Legitimate HYIP business owners can be contacted. They establish a company as a serious entrepreneur and reveal their all contact information. If not, then they are scammers.
- Legitimate HYIPs receive positive feedback, if they have timely paying records.
3. How to Invest in HYIPS
The best way to invest in an HYIP is to start with small fund and risk only what you can afford. Until you start investing, you can’t measure the risk level and know whether HYIP is legitimate or not. The risk tends to be worth it if the investor thinks the HYIP is legitimate because the return is incredibly high. Do some calculation using the high yield investment calculator to find out how long it will take before you’ll get your investment back.
4. Indeed, the HYIP game may not be for every investor, but for those who want a high return quickly and are excellent at risk assessment, it is an excellent alternative. And believe it or not, there are thousands if not millions who have made money through HYIPs. Before jumping at, think about what your reasons for investing are. Are you looking at it as a solution to your financial problems you shouldn’t even think about it. However I can’t recommend it to you as I personally yet to invest in the HYIP in coming days. First I need to educate myself to that level where I find it comfortable to invest in HYIP.
