HYIP stands for High Yield Investment Programs. Almost all of them are modified Ponzi scams which try to pass themselves off as investment schemes which carry high returns, along with high risks. “Investors” who fail to get paid are often written off as falling victim to the “high risk” factor.
High Yield Investment Programs typically offer high rates of returns like 0.5% per day or 30% per month. Most of these programs rely on investments by new members to pay off old members. There are a few which actually do invest, but these are usually risky and financially unsound ventures, which will eventually lose money in the long run, and depend on the HYIP program making the right call almost every time.
Traditionally, HYIP do not reveal the specifics of what they invest in. They may say that they are investing in Forex, in stocks, or are just using your money to place bets. But it’s often another matter altogether behind the scenes. It would be more accurate to call investors in HYIP gamblers, rather than investors.
Participation in a HYIP involves members leaving a sum of money, which can be as low as $1 with the High Yield Investment Porgram in question. Depending on the rate of return (ROI) advertised by the HYIP, after a certain time, they gain a “profit” from their initial investment.
However, quite often, people choose not to withdraw their initial investments along with their “earnings”, and choose instead to let it compound, in order to earn even more the next time payout comes. Quite a number of people will continue to do so until the HYIP closes down and they lose everything that they have put in.
After all, if a HYIP has been paying you for 7 times, it has to be safe right? So ideally, you should leave your money in there till you have enough invested to generate substantial returns to set you up for life, right?
Wrong. HYIPs are by their nature, designed not to last. Some of them may last for a number of years, but eventually, a HYIP will have to close down. HYIPs are not a “invest your money and forget all about it” investment.
There are actually people who claim that they have been able to make money using a HYIP. However, most of these people also spend a lot of time and effort to investigate and discuss HYIPs to ascertain which ones are safe and not likely to collapse in the near future. In this respect, investing in a HYIP is more than gambling, and exchanging tips with your fellow gamblers to ascertain which bets are better. Gamblers accept the high risk involved, and when they are making money, will claim that gambling is a viable investment. Some of them need to take a big loss before they realise their mistake. Some of them never do.