In today's article I'd like to share my experience and respond to some questions related to hyip programs.
I think that this article should be read by anyone who is interested in investing in such type of programs or his investments are not successful so please share it to your friends.
Let's begin with the definition of hyip:
What is a hyip?
A HYIP, which stands for High Yield Investment Program, is just what it sounds like, a program offering a high yield investment.
One can often find the Wikipedia definition that is:
a hyip is 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.
I don't agree with this definition because it assumes in advance that every hyip is a fraud and scam and every hyip is based on a Ponzi scheme. Can we say that? I don’t think so, because with such an approach we can also say that every politician is a liar, careerist, manipulator and every police officer is a brute and robber.
These are stereotypes and generalizations because I know many good politicians and cops. I do not deny that many times it happens that a politician is a liar and careerist, police is brutal and hyips are based on a Ponzi scheme but it is not the norm.
Not every hyip is a scam and not every one is based on a Ponzi scheme. The Wikipedia definition is more an expression of frustration than a fair assessment. The connection between hyips and scams, frauds and Ponzi schemes is the result of the market regulation failure which gives a very good ground for cyber criminal operations. The problem of avoiding responsibility and the easiness of hiding one’s own identity gives a considerable scope for online fraudsters. On the other hand, hyips offer honest administrators and traders the chance to combine their skills in spite of their problem with capital shortage.
If they would like to accept direct investors deposits in their domestic countries they would have to obtain multi-licenses and spend huge money. By creating hyips through offshore companies they are able to manage a capital without much formality.
So why do so many hyips are dishonest an collapse so often?
Firstly, if someone can effectively multiply money he doesn't need additional capital, it is sufficient for him to establish a private family equity or he will reinvest generated profits.
Secondly, since Goldcoders hyip script was published on popular torrents and warez forums almost anyone could set up his own hyip without imposing higher costs. The same applies to the hyip monitoring script. Such a spray of cheap hyip scams caused an overall decrease of the quality of hyip programs and discouraged hyip investors.
Today a hyip is associated with a scam and Ponzi scheme therefore hyip administrators don't want to be identified with that name and they write: "we are not a hyip", because in other words they don't want to be named: "This program is a hyip which means it’s a scam."
Hyip monitors are also accused of promoting hyips. I agree that many of them are unethical; it would be my pleasure to monitor only honest and reliable programs but the reality is different and I have no power to change that.
Thirdly, even an honest hyip administrator who really invests investors’ money is not always able to avoid mistakes. A bad investment decision, hackers or payment processors problems, law troubles may bring down even the best organized and honest programs.
In summary, the hyip market is corrupted, hyip Ponzi type of programs prevail and they are more popular because they offer higher ROI (return of investment) than other, less competitive but honest programs. You have to know that even if you are invested in a Ponzi type of program it doesn't mean that you are automatically losing your deposit.
The programs which don't pay to any investors from the beginning of their existence are rare. Administrators know very well that until their programs are profitable for some investors, these programs will continue. This is not a secret that these administrators, after turning their programs to scam, open new ones.
What is the future of HYIPS?
The future of hyips is determined by several factors:
- The ability to continue making profit
- Existence of hyips managed by professional teams which can survive for many years
- The stability of payment systems
- Existence and development of honest and legitimate programs.
A general trend is not stable, because many people are discouraged about this type of investments and it's not surprising. At present you have to treat hyips as a fun or game instead of treating hyips as the main or the only source of your income. As long as more serious and reliable administrators will come to this market, providing transparency, profitability of investments and a guarantee, we can't expect that this trend will change.
Is it possible that the hyip market will fail?
No, not in my opinion; it can evolve as it was with autosurfs and GPTR market but similarly to gambling the hyip market is still stable and has its own followers.
Regarding e-payment systems, we can talk about stability of this market. During e-gold era almost the whole market was based on this payment processor which was not quite safe. Fortunately, when e-gold collapsed, a worthy successor has appeared (Liberty Reserve) and they have been operating continuously for around 10 years. There are also others payment processors like Perfect Money, Solid Trust Pay, Alertpay or OkPay but none of them can equal the leader (Liberty Reserve).
Is it then worth investing in hyips?
Everyone has to answer for themselves. I am only sure that not everyone has predispositions for such type of investments. I have heard about people who take loans from banks or from their families to invest in hyips. This is total nonsense. You have to be careful, patient and not greedy and invest without emotions.
It's a good idea to make one's own investment strategy and implement it consistently. If you usually fail and lose your money, let it go, you will only waste your time and nerves. Of course, what is most important in this type of investments is to have luck and I wish you that :)
The next part of article soon.
Ivaho, Money-Monitor TEAM
SECOND PART - How to invest in hyips to be in profit?