Let’s talk about what is a high-yield investment program. What is HYIP about exactly? HYIP is a type of Ponzi scheme, an investment scam that promises unsustainable high returns of investment, claiming to invest the members money on stock, mostly Forex, markets, but in fact pays the members with the money invested by the others.
What is a High Yield Investment Plan or Program?
What separates the HYIP from other kind of investment plans is it’s relatively short turn over period with exceptionally high yield for your money. The plans can be divided into two categories:
- Short Term
- Long Term
Short term promises you a 10-35% return every few weeks and supposedly pays out the whole amount after few weeks or months.
A Long Term plan promises a certain return, such as 2% daily for instance the next 2 years. Some even offer to pay you forever or at least as long as their scam gets exposed and taken down.
An average lifetime for a HYIP is 6-12 month, although the are some exceptions out there, most notably Forex Paradise which has maned to stay online for 2.5 years, setting a new record. The lifespan of any HYIP website depends on their ability to fool their affiliates and get them to bring in more people.
Where Are the HYIPs Located?
Most people are expecting the scams to be registered in off shores, such as Panama, Gibraltar or Macau. But in fact the top 3 countries these investment plans are lately popping up from are:
- Russia
- Hong Kong
- UK
I guess everyone was expecting Russia, but I bet the last 2 came as a surprise for you. In fact it is very easy to start a company in Hong Kong without ever even visiting there. Although they are officially not an offshore, they are in fact a haven for financial frauders as they have very liberal financial laws and corporation laws, together with very low taxation. There are numerous companies who will offer you a package to set it all up. They will even run a virtual office for you for a very low fee, leaving you free to deal with the financial side of things.
Once you got a company registered in Hong Kong, you can easily open a branch in United Kingdom, hence opening up the European market. This is due to the fact that Hong Kong used to belong to UK. Most people are actually not aware of this loophole and often don’t suspect a company registered in one of these location. I am hoping that if the Brexit will ever actually happen, this will make it more difficult for the HYIP companies to pretend to be European based.
An average lifetime for a HYIP is 6-12 month, although the are some exceptions out there, most notably Forex Paradise which has maned to stay online for 2.5 years, setting a new record. The lifespan of any HYIP website depends on their ability to fool their affiliates and get them to bring in more people.
What Type of People Are Attracted to HYIP?
- Normal people looking for online investment opportunities for their savings
- HYIP pros
Many people are struggling with their finances in today materialistic world. It’s easy to end up in a situation where you can no longer pay off your bills or credit card debts. These people are desperate to make a change in their lives. Some, such as professional gamblers, are even looking for ways to cover up their financial mistakes before the partner figures out what’s going on. They are scanning the Internet for any way to make money and believe the glowing reviews and testimonials.
There are many HYIP pros, or sharks as I like to call them, out there, seeking out new HYIP plans every day. They like to get on to new one as soon as spot it and start massive recruitment campaigns. They are keeping their investments small and spreading their money across multiple plans. These people know exactly what they are doing. They only invest what they can loose and once one plan stops paying, they move into the next one without skipping a beat. There are countless websites and communities which advice you how to best make money with HYIP.
Can I Actually Make Money With HYIP?
By Investing? Yes you can with a little bit of luck, at least at first. The reason why most people loose their money with HYIPs is the fact that they make a little Proof of Concept by investing 10-20USD and once this investment pays itself off, they immediately invest a larger amount, not realizing that 200USD or 2000USD is entirely a different thing.
However if you get into one of these plans early enough, while it’s still growing and invest only small amounts, let us say upto 100USD at the time, you can indeed make a little bit one money.
By Recruiting? Absolutely! This is what the HYIP scams are counting on, you recommending the scheme to others and sharing your testimony on the Internet. Besides for offering high yields for your investments, they also pay for your participation in fooling the others. You will get a certain fee per person you recruit or a percentage of their investment. This way it’s easy to make a lot of money at the cost of the others. These people are considered the lowest of the low among all the network marketers and are often banned from groups and communities for sharing their links.
By Reviewing? Best way to get rich! Many of these plans pay for both video and written reviews, especially in the beginning when they don’t have so many customers. I consider the HYIP monitor admins breed of their own. According to a recent review, approximately 95% of them get paid via the HYIP they are supposedly monitoring, either by receiving a higher percentage of their downline or simply getting paid to keep the status Legit and Paying long after the HYIP scam has been exposed.
How Do They Get Away With It?
It’s really easy to get started with a scam nowadays. All you need is domain, a website with some sort of e-commerce system which allows you to accept payments. You can find so many tools out there that allow you to set this all up in a less than a day and you can be on your way to scam people out of their hard earned money.
Next thing you need to do is the spread the message across. Several easy ways to get the message across:
- HYIP monitors
- Investment Bloggers
- Members
- Paid Adds
Contacting HYIP monitors is a good start as most HYIP sharks are checking these out every day. You can use SEO keywords to ensure that your website ranks well in the various search engines and even pay Google to advertise your services, as Xena accidentally discovered yesterday.
There are also plenty of fake investment bloggers out there, who are pretending to write an honest positive review about a certain plan, of course at the same time sharing their join link, hence recruiting new members.
You also need to get some proof of payments and reviews, since these are very important for any beginning HYIP scheme. There are two ways to go about it:
- Paid Reviews
- Member Reviews
Several freelancer websites are advertising professionals, who are willing to either a write or record a Youtube video review about your plan. If you pay close attention, you find out the same people are reviewing up to hundreds of different scams.
Since people are starting to slowly recognize the individuals and the buzz lines they are using, most program are encouraging, often even rewarding, the members to upload their own testimonials and proofs of payments. Members are complying as they realize this is the easiest way to convince the others of the profitability of the HYIP.
Once the ball is rolling, all the effort goes into keeping it moving as long as possible, the constant flow of new investments being the key. It’s therefore important to do plenty of advertising, releasing new even more attractive plans and incentives. Many websites advertise things such as investment guarantees, conferences and exotic holidays to appeal for even broader audiences.
Should You Get Involved?
Definitely no! These schemes are highly illegal and so is participating in them. This is the reason why people who invest in these schemes like to stay anonymous and prefer digital payouts and currencies, such as Bitcoin. It is not easy to explain to your bookkeeper or even your wife how you made 500% return on your investment in few months, so better keep the money hidden.
While the likely hood that you get caught and facing criminal charges is not very high, you will at least end up on the spam list of every Online Marketing Company out there as these HYIP schemes earn a lot of money by selling your contact details to the others. Furthermore if you have supplied them with valid address details and or scans of any bills and identity documents, you might be facing online identity theft.
Besides you should also consider the fact that even if you know what you are doing, someone you recruit on the Internet might not. They might very well be investing their life saving into one of these schemes and loose it all once the plan goes bye-bye. Do you really want this on your conscience?
Confused about how to actually make money online legally? Take a look at here for my recommendations: Start Making Money Online
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