What Exactly is HYIP?

HYIP is basically a program where the aim is to accumulate money or capital from the masses for a venture or an idea. And in return, the program will promise these ‘investors’ a certain or fix return on their money deposited with the program. Most if not all HYIP that are transacted over the internet are not regulated and I doubt that it will ever be. The interesting part is that it seems that the HYIP community or HYIP investors themselves are indirectly regulating this industry. While they can not enforce this industry, the community works together to inform and be informed on which programs are good and which are not. If the program is not living up to it promises to members, words gets out to the mass and the program might suffer.

Hy-ip.com offers to help regulate these programs that are currently on the internet informing the masses which programs are paying and which are not paying or how well is the program performs with certain indications posted on the monitoring sites. HYIP has been deemed, branded and said to be a scams, ponzi and pyramid schemes. But yet, HYIP still continue to draw in a lot of new investors while retaining some of the veteran investors. And that is what makes it an interesting industry.

The Way they Make Money 

As stated, HYIP exist to accumulate capital from the masses to venture in a business idea. Most of the time, if you take out the Ponzi factor, these programs CLAIM that they are making money from the following:

 Forex trading

Stock, Index and Commodities trading

Internet Ventures

Sports Betting

Betting Arbitrage So the real question remains; is it possible to make these kinds of returns? Again, taking the Ponzi factor away, it seems to be possible. Let’s take forex trading as an example because this is what the majority of programs claim to be making money from. If you do a search on Forex trading strategy or system, you will come across loads of sites that sell systems and trading strategies that claim that they can make x amount of money a month using their

strategy. If that was to be true, then by following the system would it make sense that the user of the system will make money? In the forex or financial institution there is something call margin financing. Margin financing offers the investors a way to use a small amount of money to control a larger amount of money in the market. Example: In Forex investing, with a USD 1,000 margin deposit, an investor can control as much as USD 100,000 worth of foreign currency. So how do they make money from this so call margin financing? Let’s assume an investor purchases EUR 100,000 at the EUR/USD exchange rate of 1.18. Meaning he is controlling USD 118,000 with only USD 1,000. Let’s also say that after a certain amount of time the exchange rate between EUR/USD moves up to 1.2500. If the investor sells his/her holding it means that he should get back USD125,000. Thus, the difference of USD 7,000 will be pocketed by the investor.

That is almost a 600% return!

So now let’s take a step further, if this investors were to have say USD100,000 margin deposits the investors could actually control a whooping USD10,000,000worth of foreign currency!!! So how is this investor going to come up with USD100,000?

Yes, you guessed it… by way of OPM or Other People’s Money. If the program owners can seek other investors to pool in their money so that this owner can get a higher margin he or she could actually control more equity and theUSD7,000 profit from the above example could actually be USD70,000 orUSD700,000 depending on the pooled amount. So what do you think each member should receive? Say 1 percent daily? This idea is great isn’t it?