For those who do not know about HYIP, HYIP is known as an abbreviation of High Yield Investment Program. HYIP is operated based on Ponzi scheme. It is an investment scam that only delivers empty promises such as an unsustainably high return on investment (ROI).
They promise ROI up to 9000% on its 60-day investment scheme. This translates into an annual uncompounded return figure that is unlikely to be possible by any legitimate investment program.
<<< How HYIP Makes Money >>>
The “business” model of an HYIP is based on Ponzi scheme. You often find these investment companies promises outrageous ROIs. HYIPs claim they are companies representing themselves as an Information Technology firm, Bitcoin investment fund manager, real estate company, or a Forex trader.
In reality, they work like a chain letter. One person invests money into the chain, another person follows. Let me give you an example.
** I invest $100 with Company A, Jeniffer then invests $50. Company A pays $150 (my own investment with 50% coming from Jeniffer’s money).
** Jeniffer waits until Adam joins Company A and invests $200. Jennifer then receives $75 (150% profit where 50% coming from Adam’s money).
** Adam has to wait for new investors to come in to contribute and sustain the “investment” scheme.
This is the chain in action. A new investor (or multiple investors) are needed to cover what is necessary to pay the last investor. This is why very often these HYIPs offer referral programs to encourage you to bring in new investors. See in Pic 1.
<<< What Should You Expect from an HYIP? >>>
There is basically nothing you should expect from them. Eventually, they will one day disappear with your hard earned money. Most high yield investment programs are very short-lived and do not last more than 6 to 18 months.
Some people still believe that it is possible to make money from these HYIPs while they are still new on the market. Although most people are aware that HYIPs are mostly scams, they still put money in relatively new HYIPs and pull out their money early.
I wouldn’t recommend people to do that as it is a huge gamble and some “investors” have been blocked and banned from withdrawing their money.
There are numerous HYIP monitoring sites on the internet that you can track which high yield investment programs are paying, and which are not. Please bear in mind that these sites are not legitimate as some of them have been paid for fake reviews.