Ok. So, somehow you stumbled into a HYIP site. The promise of 300% return in two days not only captured your attention, but made you dream of early retirement and Caribbean holidays. Invest a dollar and you’ll get three. You started making detailed calculation about how much you really have in your savings. Triple that in two days? Wait. Don’t go to the bank just yet. Don’t wipe your savings clean just yet. There are things you need to know about HYIP investment before you hit the “spend” button.
What is HYIP It’s an acronym for High Yield Investment Program. In other word, an investment program which promises, in theory at least, a profit return higher than that of banks. Sounds good? Planning to invest already? Wait. This next sentence will bring you back from your Caribbean dream. The harsh reality is 99% of all online HYIP investments are glorified Ponzi scams. They depend entirely on new investments to pay off the profit to old investors. As soon as the total amount of new investment becomes lesser than that of the profit to be paid, these programs will be out of business. More often than not, a huge number of new investors will lose their money.
Why then, people still invest in HYIP, you might ask. There is only one comprehensible answer. There is no other program either online or offline that promises return as high as HYIP investment. Although many lose their money in HYIP, some do actually make profit out of it. Over time, people have learned the “art of making money from HYIP”. The programs will fold sooner or later but if you know the trick, you can earn some profit while the lasts.
There are two golden rules that you must adhere to in HYIP investment programs. Not to ensure profit, but to avoid total loss.
The first and foremost rule of investing in HYIP is to never, ever invest money that you cannot afford to lose. This includes but not limited to your utility bills money, rental allocation, your baby formula money, your life saving, insurance premium and others. This rule will be easier to follow if and when you come to terms that almost all HYIP programs will turn out to Ponzi scam.
The second rule is to understand fully that past performance should never be used to predict future return. A program that pays well could very well disappear the next day. There is no guarantee whatsoever on how long a particular program will last.
There is however some tell tale signs that you can use to gauge the shelf life of a HYIP program.
One of them is the return rate. It is widely accepted among investors that a one to three percent daily return is the most reasonable return rate for any investment. Anything more than that is pure hallucination on the part of the program admin and fantasy on the part of investors.
This does not mean that you cannot make profit from program that guarantee huge return such as 30% or 50% daily. You can, provided you join the program at its early stage. Invest small amount and get out as soon as possible. Hit and Run
For programs that give out reasonable one to three percent returns, you can invest larger amount and even compound your profit. Compounding however should only be done after you take out your entire principal. This way, even if the program folds, you would only suffer paper loss. Even when you are compounding, make it a habit to withdraw some from time to time.
All this being said, investing in HYIP is more of a luck based investment rather than cold calculation. Just treat it as a game and have fun while making a few dollars.