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Monday, July 5, 2010

What are HYIPs or High Yield Investment Programs

HYIP High yield investment program - the name itself suggests that its a program which offers high yield for your investment.

What is high yield?
When "offered yield or profit" exceeds the normal bank returns it can be considered as high yield.

Are these programs legit?
More than 95% of these programs are a sham. They run on ponzi scheme, named after Charles ponzi, who made the scheme popular.

What is ponzi scheme?
It is a well known scam method opted by financial organisations which turn scam after a while. What they do is:
Day 1 A deposits certain amount for daily return.
Day 2 B and C invest a little each for daily return.
Investment made by B and C on the second day is used to pay the interest for A. And so on.
There is really no investment made by the organisation to guarantee the returns or profits. The new investment made is used to pay the old investors. They simply cycle the money and one fine day when they've made enough profit they run away with the money, leaving the fresh investors in total loss and old investors in profit or little loss.

When most of the programs are "to be" scams then how are people able to earn from them?
Not all the members who invest in these programs earn. Average life of these programs is not more then 2 months after which they turn scam. So in order to earn from these programs first u have to learn about them. There are over thousand hyips offering various percentages as profits on your investment. Few are long term programs, few are short term programs. Short term programs have very less life when compared to the long term programs. So the trick is to get in early and get out early.

1 comment:

  1. hyip are scary to me and i have not used them, however i wish you luck with your investments!

    ReplyDelete

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