An HYIP is an abbreviation for a High Yield Investment Program. There are not a lot of legitimate HYIPs, as most of them run on the same type of scam. You may make money in the very beginning, but you could lose it all instantly, if you don’t know what you’re doing.

How do HYIPs Work

High Yield Investment Programs work a lot like a chain letter works. For example, I invest $100 in an HYIP company or program. Amy comes along and invests $50 after I invest my $100. The company will then pay me $150, with $100 coming from my previous investment, and $50 coming from Amy’s investment. Next, Andrew comes along and invests $200, Amy will receive $75, and Andrew will have to wait for another investor to join the company before he sees any return. This is the chain that the whole scheme operates on. A new investor or multiple investors are needed to cover whatever amount the previous investor put in.

How do HYIPs Keep Getting New Investors?

HYIPs work on the assumption that if they can make it sound legitimate while promising significant returns, people will buy in. There are a lot of fake reviews written talking up whichever scheme you choose to invest in. The reviews are usually written by affiliates of the program to make it look legitimate. The more positive reviews an HYIP has, the more reputable it sounds.

What to Expect

If you can’t resist investing in an HYIP program, learn not to expect anything in return. You may receive a return initially, most of these schemes collapse between six and eighteen months. If they collapse while you have money invested, your money will be gone. There have been reports of some investors being banned or blocked from receiving any of their returns after their initial investment in the HYIP.

Why do People Invest in HYIPs?

There are two main reasons people invest in these schemes, and they are greed and innocence. Many people dream of a quick payday with minimal effort. This system seems like a perfect way to obtain it. These people invest huge amounts of money very early on in the program and pull their money before the program gets well-known. This may pay them large sums of money quickly, but it is a huge risk to anyone who attempts this. The second set of people who invest in this program are entirely innocent and believe this program is legitimate. They invest their money solely on whatever information is written on the scheme’s website with very little additional research.

How do You Tell if an HYIP is Legitimate?

You should check the company address listed on the site. You can use Google maps to see if it exists. If the address exists but is located in a multi-company building, email one of the other companies and see if the HYIP office is there. Also, avoid any HYIP that promises daily return rates with short-term payout options. Use legit monitoring sites like HYIP, to keep track of legit programs.

HYIPs should mostly be avoided as they are almost a guaranteed way for you to lose your hard earned money – unless you know what you’re doing. There is a massive risk with very little payoff reward.