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High Yield Investment Program � Reality or Scam? Comments

Kelly Summers   |   March 28, 2008
High profit and minimum risk are two main factors people consider when they make investment decisions. Not everyone though is successful in attaining and sustaining this level throughout the life of their investment. There are different ways to potentially receive high return on your investment within a short period of time. One such option is HYIP. HYIP (High Yield Investment Program) is a program that offers return rates anywhere between 5 and 250 percent a month!

HYIPs apply various investment strategies to generate high returns. They are involved in capital management, such as Forex trading, stock exchange, sports betting, metal trading etc. There even exist HYIPs that invest in other HYIPs.

High Yield Investment Programs carry their daily activities over the Internet. They typically accept investments of $10 or less. Almost all these programs use e-money only, such as E-gold. To work with HYIP you have to register your account on the E-gold e-money system. The next step is adding money to your registered e-gold account. Use only those HYIP projects that operate 10-20 days and have already made a good showing in different HYIP rates and HYIP monitoring. First, invest a small amount (usually $1-10). Check the system of payment and if everything goes right, invest more assets in this HYIP. If you can withdraw your returns daily, do it! If a HYIP hasn�t paid you once, take out your deposit immediately, if still possible.

You have to be extremely cautious before you invest your assets into HYIPs. There are a lot of phony programs that look pretty real. Scammers are very talented and resourceful in our days to make their financial scams look legitimate. Unfortunately, one of the worst qualities of the human nature, greed, drives people into making rush and stupid decisions. Scammers promise high returns and might even pay their first clients. HYIP is alive as long as new investors provide the cash to pay profit to existing investors, which they typically then withdraw. This approach allows the scam to continue as long as new investors are found and/or old investors leave their money in the scheme.

Most people understand all the risks from investing into HYIP, but they still keep taking these risks. Such investors don�t typically invest large sums. Their profit depends on attracting newcomers. Unfortunately, even understanding the real nature of HYIPs does not stop investors. That�s why the programs are still prospering. The SEC has said the following on the matter: "These fraudulent schemes involve the purported issuance, trading, or use of so-called �prime� bank, �prime� European bank or �prime� world bank financial instruments, or other �high yield investment programs.� (�HYIP�s) The fraud artists... seek to mislead investors by suggesting that well regarded and financially sound institutions participate in these bogus programs.�

Perhaps the largest ever existing online HYIP scam was PIPS (People in Profit System or Pure Investors). The investment scheme was launched by Bryan Marsden in early 2004, and spanned more than 20 countries. PIPS was investigated by Bank Negara Malaysia in 2005 which resulted in Marsden and his wife being charged in a Malaysian court with 97 counts of money laundering involving over $20 million. Even after these charges were brought forth, many of Marsden�s investors continued to support him and believe they would see their money one day!

How can the scam be identified? Make sure the program offers a registration form and includes a disclaimer section on its website. I would not rely on a website that looks unattractive or suspicious. Most likely it is a phony one. Also, check if there is any contact information on the website including business address, phone numbers, etc. It is also a good idea to look for forum discussions related to this particular program. Information about scams is quickly spread via the Internet.

Considering both the negative and positive aspects of High Yield Investments, they can be highly lucrative if handled right. A good research is an essential tool that should help you to avoid making bad decisions.
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