Wednesday, January 14, 2015

High Yield Investment Programs (HYIP)

High Yield Investment Programs aka HYIP are a type of ponzi scheme that offers high returns for money that you invest in it. For example you put in $100 and then it grows by 1% each day. That is a very high return and it is used with new investors money to pay old investors off. Then eventually when new investors don't come in and they can't pay their old investors. This causes everyone to start losing money.

I have been encountered by very pushy people who are marketing for a HYIP. They would want to speak to me immediately and try to get me to invest by showing me how much money they have made. This is very annoying but this is really the only way they can market. Adwords won't take them and neither will most traffic exchanges. LinkedIn has several people involved in HYIP programs just searching for new people to spam.

ZeekRewards is a perfect example of a HYIP. They were a company that had a penny auction site. They ended up getting shut down because most of their money came from investors. The investors would put in money and then they would see it grow by 1% or more each day. The SEC shut them down and then sued them. This company preached up and down on conference calls that they were not a ponzi scheme because they offered an actual service. Turns out this was just a front for where they were really making their money which was from investors.

There are a couple different websites that show you what HYIP's are supposedly still paying, These are designed to help you not get burned. Problem is, you never know when they are going to stop paying. Some people invest $10,000+ in these programs. You don't want the company to crash a couple days after you invested in them. Even if the company doesn't go under. Ponzi schemes are illegal which is what HYIP's are. This means if the authorities find out, there goes all your money along with other fines and possible jail time. This is just not worth it.

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