HYIP - High Yield Investment Programs

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HYIP - High Yield Investment Programs

HYIP, or high-yield investment program, can help you generate passive income from online enterprises, provided you exercise caution and due diligence, as this article explains ...

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If you're looking for a way to generate a passive income stream from online enterprises and if you can bear the ups and downs of risky deals, then you may want to consider investing in a high-yield investment program, or HYIP for short. HYIPs are among the hottest online programs around, and are generating a great deal of interest and excitement among wealth-seekers all over the world. There are hundreds of existing HYIP opportunities for you to check out, and new ones spring up by the dozens every day.

A typical HYIP is run by an individual or a small group of investors. Unfortunately, you often won't be able to dig up very much background information about these people. In fact, you probably won't even get the full names of the people operating a particular HYIP, so you can't be sure if they are experienced investors or not. At any rate, they pool members' money together and then invest in different markets or commodities, such as forex, stocks, futures, precious metals, real estate, and oil. The investments are very risky, which means you'll either get outstanding returns on your money or lose everything. Some verified HYIPs yield as much as 12% per day, so you can certainly make a small fortune by investing in the right program.

A Warning About High Yield Investment Programs

A High Yield Investment Program, or HYIP, is a purported investment program normally offered via the Internet. HYIPs typically accept investments of $100 or less while promising high returns. The introduction of e-currencies such as e-gold and StormPay has made it easy for HYIPs to operate across international boundaries, and to accept large numbers of small investments.

No HYIP has, as yet, survived for very long without it turning out to be a scam. Scam HYIPs are Ponzi schemes, in which new investors (usually unwittingly) provide the cash to pay a profit to existing investors, which they could then withdraw leaving nothing to pay the new investor. This approach allows the scam to continue as long as new investors are found and/or old investors leave their money in the scheme, known as compounding (because even higher profits are promised).

HYIPs are frequently advertised in spam emails, forums or mailing lists, since people are typically given a commission (for example, 9% of invested funds) when they provide a referral of a new customer.

HYIPs typically are not based in the United States, Europe, or Japan - places that have strong laws against unregistered investment programs. HYIPs disclose little or no detail about the principals, management, location, or other aspects of whom is getting the money to be invested, and relatively little information (other than asserting that they do various types of trading on various stock and other exchanges) on how their investment programs actually work.

Source: Wikipedia

And that is of course the tricky part. Determining which HYIP offers are legitimate and which ones are outright scams can be quite difficult for beginners. The first thing you should do when you find a HYIP that sounds like a good bet is to run a Google search on the program name. In addition to the program homepage, the search results should point you to review websites where former or current members can post messages about their personal experiences. These messages generally contain information about whether or not the program pays out on time and lives up to all the claims made by the operators. If a particular program generates a lot of negative responses, you'll know that you should stay as far away as possible. Conversely, if it receives numerous glowing reviews, including proof of payment received by members, then you should feel more confident about giving it a shot.

As with any other type of investment, do not put up more money than you can afford to lose. There is great risk involved in every HYIP out there, even the ones that appear stable for the time being. It's not uncommon for a program to pay out on time for the first few weeks or months of its existence, and then suddenly collapse without any warning. So just because you receive a couple of nice payments at the beginning, that doesn't mean you should mortgage your house or dump your life savings into the program. The key is to proceed with caution, make a bit of a profit, and then get out before things go south.

Investing in a solid HYIP can provide you with a great second income and can even lead to financial independence. However, you should always exercise due diligence and thoroughly check out every program before you hand over your money.

A Warning About High Yield Investment Programs - Interest Rates

HYIPs typically claim to offer interest rates of 1% or more per day on invested funds; some claim to offer much higher daily rates exceeding 200% a day. The highest HYIP known has offered 10,000% ROI in one day, and looks like an obvious scam.

Such high interest rates raise the question: why would any business that can earn such profits, legitimately, bother to look for small investors? Such unusually high yields should tip off investors that there are serious risks involved.

As a comparison with a typical 1% per day claim, Warren Buffett, the world's most successful investor, made around 30% per year during his most successful period, i.e only less than a tenth of one percent per day. If it is assumed that such huge claimed returns as 1% per day cannot in fact be produced legitimately, all HYIPs are therefore likely to be Ponzi schemes, and so most investors will in due course lose their money.

Source: Wikipedia

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