What are High Yield Investment Programs?

HYIPs are programs which pool together the funds of their
members to take advantage of investment opportunities,
like stock trading and foreign exchange (FOREX) trading
among others. These HYIPs attract funds from members
(known as "deposits" or "principal") by promising high
rates of interest payments, which explain why they are
termed "High Yield Investment Programs". Naturally,
the higher the promised interest rate, the higher the
risk borne by the members. This is due to the fact that
HYIPs pay off their members from the returns on their
own investments. Therefore, it is possible for the payouts
to exceed the HYIP?s own returns, especially when the
rate of interest payment is high. If such a situation
persists, the closure of the program would be inevitable
and members will stand to lose their principals.

Scams

A scam is a fraudulent business scheme and this is rampant
among HYIPs. Some HYIP owners abuse the trust of their
members by misrepresenting to them about their investment
strategy, when they have NONE. Consequently, they will
eventually run out of money to pay their members and most
of them just disappear into cyberspace, along with members?
hard earned money. Therefore, we hope to educate readers
by offering our humble advices on minimizing the
possibility of being cheated.

Ponzi Schemes

This is named after Charles Ponzi, an Italian who migrated
to the United States and became one of the greatest
swindlers in American history. His aliases include Charles
Ponei, Charles P. Bianchi, and Carlo. By paying off initial
investors with money obtained from the later investors,
Charles Ponzi managed to swindle $15 million from 40,000
investors from 1919 to 1920. This is how the term ?Ponzi
Scheme? was coined. You should be aware of the fact that
some HYIPs are actually pure Ponzi Schemes.

My Advice

1. Never join any HYIP that pays more than 3% interest
daily as it is next to impossible to afford such a high
payout on a regular basis.

2. Always do a Due Diligence check on the program.

3. Listen to what fellow investors have to say about the
program in the various hyip forums. Check if it has been
paying its members.

4. Diversify your funds by making deposits in several
reliable programs. This reduces the risk of loss you are
bearing. Even if one program shuts down, you still have
other programs as back-ups for you to recoup your losses
from.

5. Determine the coherency of the program?s investment
strategy. See if the owners know what they are talking
about and if they have a sound business plan.

6. It is not advisable to join a program that uses poor
language on its website. If the program has thousands of
dollars of deposits, they should be able to afford to
spend a few hundred to hire a professional publicist, or
at least someone with a decent command of English to
instill confidence among investors.

7. Just because the program is paying does not mean they
will continue to. Decide for yourself how long more the
program can sustain and whether it is likely for you to
make a profit.

8. Always read the FAQs and the terms of payment carefully.
You may discover some terms which may put you in a very
unfavourable position.

9. Invest only what you are prepared to lose. Expect the
worst but hope for the best. Be conservative when
calculating your profits. Do a scenario analysis. This
will put you in the correct frame of mind when deciding
the amount to deposit with a program.

10. Do not compound your interest until you have earned
your deposit back. This reduces the likelihood of you
losing money as some programs do not survive for long,
especially those without sound business plans.

For searching new HYIPs always use any good HYIP monitor
like http://www.thehyips.info . This information prevents
you from SCAM.