Firstly, for those of you who don’t already know, HYIP stands for High Yield Investment Program.
HYIPs are one of the most common scams on the internet today, though they became a source of income for scammers well before the digital age.
There are a huge number of people looking to make extra money, for many reasons, including becoming debt free or in the hopes of giving up their day job.
A large proportion of those people have internet access and will come across some of the thousands of HYIPs that are circulating the net at any time.
The allure of HYIPs is the promise of large returns on small investments, the type of investment a lot of potential internet investors may believe they can afford.
With some HYIPs offering returns from 10% to even 50% per day on an investment of as little as $10, it is easy to see why some people get suckered into them, especially when it is known that some people do make the quoted returns.
The downside of HYIPs, however, is that a larger number of people lose all their money.
In order for the HYIP to pay out to some investors, they use the money invested by the newer members.
In other words, a high yield investment program is nothing more than a Ponzi scheme.
Whilst anyone getting in early could make a profit, the truth is that the only people consistently making money from HYIPs are those that start them.
As no-one really knows how much money is circulating at any time it is impossible to predict when the HYIP will crash, as it surely will.
Therefore, investing in one is not much different to flipping a coin -
‘HEADS’ I win : ‘TAILS’ you lose
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