HYIP - It's All About Making Money
I have been online since 1995 but I have never heard of HYIP's or High Yield Investment Programs in the internet until very recently. I think this is because I never took the money making potential of the internet seriously before. I once joined an affiliate marketing site but this was done without any understanding about this business venture I embarked upon. I just blindly followed the instructions, spent money on a webhost, paid an affordable (or so I thought) registration fee and did not get any return for a P4,000.00 investment. After that experience, I did a lot of thinking, listening and research, and this is what I found out about money making schemes in general.
High Yield Investment Programs (HYIP) is all about making money. And money, like what the priest at Sunday mass said is almost always the root of all trouble.
Wikipedia defines a high-yield investment program (or programme), HYIP, as a type of Ponzi scheme, which is an investment scam that promises unsustainably high return on investment by paying previous investors with the money invested by new investors. A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation. The Ponzi scheme usually entices new investors by offering higher returns than other investments, in the form of short-term returns that are either abnormally high or unusually consistent. Perpetuation of the high returns requires an ever-increasing flow of money from new investors to keep the scheme going.For people who know how to gamble, this kind of investment may pay off because they know when to get out before the whole scheme collapses. But for non-gamblers, this is very risky because their lack of investor knowledge or competence will work against them.
And so whenever a money making scheme was offered to me, my first question was, "what are we investing on?" I have been offered pyramid type schemes, including e-gold investments but as a non-gambler, I wanted answers, not speculations and getting none, I had no interest in joining one.
Now comes, online investments via HYIP's. Almost 100% of HYIP's are internet based which makes it more risky. On the other hand earnings are potentially higher, but as a general rule however, we should be wary of programs that promises a fixed profit of 2% per day on your investment. There are so many scams out there that are trying to make money out of the ignorance and inexperience of people. Often the high ROI influences investors to leave their money in the program, allowing the promoter not to have to pay out very much to investors. All they do is to send statements to investors showing them how much they earned. This maintains the deception that the scheme is a fund with high returns. Investors are now enjoined to recruit new entrants as their downline. It becomes a vicious cycle until everything falls apart.
On the plus side however, most analysts say that for as long as you monitor your investments well, be on the lookout for subtle changes, you can make a lot of money out of relatively small investments in HYIP's in a short period of time.
But to go back to what our priest said about money being the root of all trouble, let me share about a friend's experience in investment banking. He said that when he was in the States, he was convinced by a cousin to put his money in a high yield investment program of his bank, and soon enough his money grew bigger than he ever imagined. As his money grew, he also started getting greedy and thus, he began putting in more money to invest. He spent a lot of time watching his investment grow and was more careful about spending money. Vacations back home were put on hold, as well as his other activities. Then one day, he had a realization. Why is it that during those times when he did not have much money, he was more open and generous as compared to now that he had all these investments. It seems that having that much money not only made him greedy for more, but also made him afraid of the idea that he might lose it all. He did not like what he was feeling and becoming. The very next day, he withdrew all the money he invested and spent it as it should be spent. He felt free and happy again.
Personally, it would be great to earn money from my online activities, and "earn" is the keyword for me. What bothers me is the fact that HYIP's are the ones profiting from the interest of the money invested by members, because members are getting paid not out of real profit (like the interest of their money), but out of the money put in by of new members. Basically that means, I have not earned any of the returns I am getting. That alone is enough to put me off.
Still, I am not closing the door on HYIP's, maybe one day when I learn more and find a reliable and honest program, I would finally give it a try...and most importantly, to remember to never get greedy.