High Yield Investment Programs (HYIP’s)


Looking for quick and easy riches has become a fertile soil for fraud. Today I’ll talk about a trend that has been gaining momentum due to the current financial atmosphere around the globe.

HYIP’s have been popping up out of nowhere every day. They play on the novice investor’s emotions, and to some extent, greed.

The promise is very tempting: Put down as low as $1, and start earning an hour later. If you kept re-investing, you could convert that one buck into $200 easily within 48 hours.

Now try to withdraw all or some of your earnings. To make things look professional, and to get you deeper into the greed hole, the program may actually process your first, and probably second, withdrawal requests. By doing so, it gains your trust, and makes you either leave your profits in the program, or even worse, deposit more cash, lured by the promise of fast accumulation of wealth.

Usually, not all investors ask to withdraw their profits at the same time. This gives the program admin enough maneuvering room to circulate the money among the members, till that admin runs out of spending cash. Now here is the critical point in the life cycle of an HYIP: The organizers wouldn’t distribute all the cash. They keep the bulk for themselves. Absent any real investment activity, such as trading, or real estate investing, the only available cash is the sum of the members’ deposits!

Once they run out of “spending” cash, the modern thieves shut down the site abruptly, disappear, and take with them most of the invested money.

Are there any legitimate HYIP’s out there? If there were, they would be very hard to find. And the only way to test their legitimacy is trial and error.

The web is full of HYIP “monitors”. They invest in a certain program and watch it for a number of days. After that, they give it their blessings as “Paying”. Big deal! Yes, they do pay for some time, but no one knows when they will disappear.

This phenomenon is not new. The proliferation of such programs has increased exponentially because of the web. It’s so easy to find a web host who accepts your site as anonymous, which gives you the freedom to close shop anytime you want!

This is hard to regulate. The only cure, in my opinion, is knowledge. Investing, like any other trade, requires proper training. No respectful training house would encourage you to invest in such programs

Today they call themselves HYIP’s. Who knows what the acronym would be tomorrow? Lucrative Profits Made Easy (LPME), or something else!

I invite the readers of this post to comment, share their experiences, and suggest ways to limit such harmful behaviours from distorting the image of a worthwhile industry like investing.

Till the next post, stay safe and away from suspicious investment vehicles!

The Wealth Maker

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