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HYIPs: An Alternative to Stock Trading
People who are successful stock traders
are no strangers to the 'educated guess.' They analyze
the risk associated with a company's stock and then
make a decision. When they are correct in their decision
they earn a gain. If they are incorrect in their decision
they will lose money. Investors that continue to lose
money will sell their stock to recap their investment.
This ultimately means they stop investing in that company
and move on to the next one that looks promising.
Believe it or not stocks are not the
only way the investor can use this same strategy to
make money. People who make money with HYIP (high yield
investments) operate on this principle. To fully understand
the comparison, it's important to first understand:
1) what an HYIP is, 2) how a legitimate HYIP works and
3) how people invest in the HYIP. Each of these are
discussed in more detail below.
WHAT IS AN HYIP?
HYIPs are investment programs that offer
high returns quickly. Like stock trading the more you
invest the more gain you receive. Unlike stocks, however,
HYIPs offer more of a return for a smaller investment.
The reason why HYIPs can do this is because some of
the money is funded from new membership. However, HYIPs
that last DO NOT and CANNOT function on new member money
alone. They must have other legitimate methods of generating
revenue. If they don't the HYIP is really a Ponzi scheme
and will collapse eventually. This will be discussed
in more detail later in the article.
There are two types of HYIPs that are
popular online: those that require a person to do nothing
but simply invest and those that require a person to
view advertisements. The latter has gained more popularity
through a concept known as the autosurf. Autosurfs that
are HYIP-based operate on the same principle as television
does: offering members something 'free' for viewing
advertisements. In this case the freebie is money. If
the autosurf is not HYIP-based, it will offer advertising
credits for its members. The more credits a member receives,
the more they can advertise their sites.
HOW A LEGITIMATE HYIP WORKS
Unfortunately, because of greedy, unscrupulous
people, a large percentage of HYIPs out there are scams.
This is especially the case with HYIPs not based on
advertising revenue though there are shady autosurfs
out there too. But the reason why HYIPs not based on
advertising are more dangerous is because there is even
less certainty on where and how funds are being generated.
At least with advertising-based HYIPs one can usually
see that they are selling advertising, whether through
an 'Advertise on our site' link at the bottom of their
web site or even an Ebay auction. However, the HYIP
that is not based on advertising usually won't make
it apparent how they are generating income streams.
If they don't have some fluff about making money through
Forex or other legitimate trading methods, they may
have the audacity to say they are a ponzi. Whether they
say it or not, if they don't have other ways of making
income they are nothing more than a ponzi. So this means
that the ONLY way they are generating funds are through
new member signups. When new members stop joining the
scheme the program will collapse. This is assuming the
owner is 'honest' enough to let it run that long. Sometimes
individuals using the ponzi scheme will let it run for
a few months, then after getting a healthy build-up
of member investments, flee with the money.
Okay, so keeping all this in mind how
can one distinguish the legitimate HYIP from the typical
HYIP which is a scam? Below are some factors which are
common to the legitimate HYIP.
1) Legitimate HYIP sites will generate
revenue from a variety of sources
Member signups alone are not enough
to keep a legitimate HYIP running. This is because when
new members stop signing up (which is inevitable even
for established membership-based businesses), the HYIP's
revenue source is gone. So if an HYIP is legitimate
it must sell a service or product or invest in stable
trades FOR REAL.
12 Daily Pro is an example of a legitimate
HYIP that generates revenue through web design and advertising
services.
2) Legitimate HYIP business owners can
be contacted
HYIP business owners who are serious
about their business will treat it as such. This means
they will establish a company just like any other entrepreneur
and reveal their contact information. If an HYIP webmaster
can give no verifiable information about their 'company'
including telephone numbers, they are scams.
12 Daily Pro is operated by a company
known as My Life Clicks, a registered business in North
Carolina.
3) Legitimate HYIPs receive positive
feedback
HYIP monitors are sites which evaluate
HYIPs. If they pay then they receive a positive rating.
If not, they receive a negative rating. Legitimate HYIPs
tend to get mostly positive rating through HYIP monitors.
Legitimate HYIPs also receive positive
feedback on virtually any place on the web, even those
not related to investing. 12 Daily Pro, for example,
has received thousands and thousands of testimonials
from people on a variety of websites and message boards.
HOW PEOPLE INVEST IN HYIPS
The best way to invest in an HYIP is
to start small and 'risk' only what you can afford.
Risk is the operative word because there is no way to
know whether or not an HYIP is legitimate until one
actually starts investing. However, the risk tends to
be worth it if the investor thinks the HYIP is legitimate
because the return is incredibly high.
Once investors find HYIPs that are legitimate,
they try to recover their initial investment as quickly
as possible. After this, they invest using their profits
so the risk of 'losing' is minimized. If something does
happen to the HYIP it doesn't matter as much because
they were playing around with just their profit anyway.
Indeed, the HYIP game may not be for
every investor, but for those who want a high return
quickly and are excellent at risk assessment, it is
an excellent alternative. And believe it or not, there
are thousands if not millions who have made money through
HYIPs, despite the number of them that are shady. So
while there is a risk of loss,(which is also present
for conventional trading methods), investors continue
utilizing HYIPs simply because the gain is so profound.
1howto.com
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