High Yield Investment Programs
A HYIP, expanded as high yield investment program, is an investment program that's usually offered thru the Internet and is known for accepting small investments (typically $100 or less) but promising high returns and that makes it one of the most common financial scams. HYIPs typically claim to offer interest rates of 1% or more per day on invested funds; many claim to offer much higher daily rates reaching 250% a day. At this point you've got to ask yourself the question, "Why would any business that can earn such profits, legitimately, bother to look for small investors?" There is no good answer to that question. A HYIP works on the ponzi scheme approach, which is an investment scheme which involves paying abnormally high returns to investors out of the money paid in by subsequent investors, rather than from net revenues generated by any real business. The ponzi approach helps the scam continue as long as new investors are found or old investors leave the money in the scheme because they are promised even higher profits. HYIPs are generally not based in the United States, Europe, or Japan because these countries have strong laws against unregistered investment programs. HYIPs disclose little or no detail about the principals, management, location, or other aspects of whom is getting the money to be invested, and relatively little information (other than asserting that they do various types of trading on various stock and other exchanges) on how their investment programs actually work. There has been no HYIP thats survived for very long without turning out to be a scam. The introduction of e-currencies such as e-gold and NetPay has made it easy for HYIPs to operate across international boundaries, and to accept large numbers of small investments. HYIPs are frequently advertised in spam emails, forums or mailing lists, since people are typically given a commission (for example, 9% of invested funds) when they provide a referral of a new customer. Obviously anyone who advises you a particular high yield investment program has questionable motives. The largest HYIP scam that has ever existed is PIPS (People in Profit System or Pure Investors). The investment scheme was engineered by Bryan Marsden in 2004 and spanned more than 20 countries in the world. PIPS is now being investigated by Bank Negara Malaysia. According to a website HYIP Scam Search that maintains a database of HYIP scams daily As of May of 2006, the total number of HYIP scams was approximately 3500. This is the total number of scams occurred from 2004 to 2006 and excluding scams not reported. About 5 new scams are reported every day. 89% of the scams preferred e-gold as their online payment processors than others.
As a result of online forums and monitoring sites which have made customers of HYIPs more aware of the risks they are taking, a different sort of "honest" HYIP began springing up in the early months of 2006. Basically, the HYIP owner calls his or her program a "ponzi-structured game" where one should "not invest money one cannot afford to lose", and where there is "never a guarantee of earnings or refunds". They promise to pay out up to 95% of deposits, the rest going to hosting or other fees and the owner's profit. The promise to pay out a percentage of deposits is not a legally binding contract or regulated by any government agency In theory, strategies can be developed to squeeze out a profit using these games but, since this is a less-than-zero-sum game, such strategies work by taking advantage of ignorance or errors by others. As these games are by definition Ponzi schemes, it is inevitable that the vast majority of investors who are not at the top of the pyramid will lose their money. If you ask me, it's basically gambling but can have even higher risks and is definitely not as fun. The disadvantages this has is that the odds of winning cannot be determined because you never really know the rules you're playing by and whether you're even playing early enough in the HYIP to even have a chance to win money. Gambling online is of questionable legal status in the U.S. and other countries, and lotteries are regulated in the U.S. and are clearly illegal online. I would assume if you ever do get lucky enough to score a huge return from an HYIP that questions would be asked. I have played around with HYIPs myself in the past and have managed to loose only a little bit of money. In my opinion the major issue is that when you are "successful" with an HYIP that means you made 50% or more on your investment. But if you're unsuccessful that means that you've lost 100% of your investment all the time. In other words you have to be successful with a high yield investment program a lot more often than you're unsuccessful. Around the time that I did my last HYIP I also started doing a home business that in many ways is very similar to an HYIP in some ways. It offers returns that are fantastic (although not as astronomical as some HYIPs), requires only 15-30 minutes a day, uses the same concept of letting your money work for you, and the best part is that its something legitimate because you know where your returns are coming from. I don't know about you but I just never felt right knowing that when I made money from an HYIP it was because someone else lost money and now I was benefiting from it. If you're interested in checking it out just CLICK HERE and let me know where to send you the info. Warmly, 
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