HYIP- High Returns or a Deception?

High Yield Investment Programs, as the name suggests are the investment programs which promise high returns in a very short time. Whilst some of the schemes are reliable, the majority of them is fake and serves the purpose of deceiving the investors. In a warning issued by theU.S. Securities and Exchange Commission (SEC) in the year 2009, it has asked the investors to stop investing in HYIP schemes and similar investment programs.The FINRA (Financial Industry Regulatory Authority) has reported thatamongst all the HYIPS that they have monitored, majority of them have turned out to be a scam.Being one of the hottest investment scams, HYIP attracts great interest from investors, who ultimately end up in losing the entire investment they make.

Bait of High Returns

The easiest way to identify a scam HYIP is by looking at its return rate. If it offers high returns at no risk, then there is no denial in the fact that it isfor sure a scam. In the current investment market, where banks do not offer more than 2% investment, the returns offered by these schemes are bound to attract the investors.You can do a quick survey and I am sure that you will find various HYIPs bigstockphoto_online_trading_and_investment__7584286offering return rate of as high as 150% to 0.5% per day.

These unusual return rates clearly indicate that these ventures are not real. For a moment consider that you need to raise dome money for a new venture.The easiest solution to do is to take a cash advance from your credit card and then paying an interest of around 20% per year. On the contrary you can also set up a scheme similar to HYIP and you can take some money from the investors at an interest rate of 1% per day. However, if you choose this option, you will end up in paying around 3,600% interest for a year and which any legitimate businessman won’t be able to pay.

So How Do They Work?

You might be wondering that actual process by which HYIPS pay 3600% interest to their customers. To be honest, these schemes do not pay this interest as they are no less than a Ponzi scheme. The money which the new investors invest is used to pay the older clients. Thus the vicious chain goes on and when the person running the HYIP cannot hold it longer, it disappears with the money.

How to Spot Them?

It is very easy to spot a scam HYIP as some of them offer such 922785477bb2d10c84absurd interest rates that even a naïve investor may realize something fishy is going on.Some HYIPs give first returns to the investors in order to gain reviews from authentic investors. However, don’t fall for it as you never know when they will run away. If the HYIP shoes below signs, it is wise to ignore them:

  • Excessive and impossible returns
  • Secret transactions
  • No information about managers
  • Complex investment strategies

The bottom line is not investing if you find something is not right.

 

HYIP
Hi there! High Yield Investment Programs; there is no person in this world who will run a business at loss which is why such programs eventually turn out to be scam. Once I passed my high school, I realized that I have many expenditures coming up every now and then. I then began researching on internet about earning ways and believe me during the whole year I became a puppet of scammers throughout; those either paid way less than the work they asked for or they would go out of sight after gaining trust of people.

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