The Truth About HYIPs
by Ajibola Aries
I want to believe that by this time, the vast majority of people who are interested in making money online, are fully aware that HYIPs are very risky and dangerous. I believe the only people who may think differently are those who are inexperienced, or some experienced people who keep putting themselves in a world of make-belief that this or that new program would be different. Well, experience has repeatedly shown that none is different. They always end the same way, which is to run away with people’s money.
Every HYIP admin always starts his program with a determination to gain money from investors, but with certainty that at the end, a lot of his investors MUST cry. If you should decide to venture into HYIPs, be rest assured that you stand at least 50% chance of falling into the category of those who will cry in the end.
There are of course many other far more useful ways you can deploy your financial resources constructively. Many of you have friends, family members, relatives and even neighbours who are in financial distress and in whose lives you could make a whole difference even with just a quarter of what you could have invested in a HYIP. Yes, using your money for humanitarian purposes is much more worth the while than investing in HYIPs, because it takes humanity forward, and there's always joy and reward in helping others.
Moreover, HYIPs aside, there are lots of alternative money making ventures which are real, that you could put your money into. Way back in 2010\2011 when a popular HYIP called Genius Funds went scam, you would be shocked by the incredible amounts of money a lot of people were lamenting that they lost in investments. What if these people have used same money to start a small or medium scale poultry farm, or a fish farm, or a car wash, or to start a recharge card business, or to set up a barbing salon, etc since that time? Why would any reasonable person put his money into the hands of a faceless, untraceable HYIP admin when lots and lots of real, better options exist? A word is enough for the wise.
Of course, the shutdown of Libertyreserve was probably the online scam of the century. Sincerely, I was expecting the entire HYIP 'industry' to collapse at that time, but the worst it did was to sweep away most of the programs at that time. Many went down because they couldn't stand the shock; some others simply saw it as a good opportunity to run. Again, this underscores the danger in HYIPs.
This leads me to the issue (or the question) of WHY HYIPs are still surviving. Many factors could account for this, but the one that is perhaps most relevant to our present discussion, is the fact that other payment processors, such as Perfectmoney, Solidtrustpay, Payza and Egopay (now defunct), quickly moved in to fill the vacum created by the collapse of Libertyreserve. However, to me, the greatest 'culprit' is Perfectmoney. Had it been that after the collapse of Libertyreserve there was only Paypal left, the entire HYIP industry would have collapsed in a single day, since Paypal doesn't reckon with HYIPs. Thus, these alternative payment processors indirectly encourage the continuity of HYIPs.
There are other factors responsible for the continuity of HYIPs.
Three come to my mind but two of these factors have to do with investors but they are nevertheless distinct.
The first one has to do with the fact that at any point in time, there will always be new people who want to come in to try their hands on HYIPs. These people are for the most parts inexperienced and gullible and HYIP admins know how to exploit their weaknesses. Thus, while it is true that there are many people who are quitting HYIPs because they have become frustrated with HYIP scams, there are always newcomers all year round. These newcomers are the ones who are always giving new life to the industry as they keep putting new money into the HYIPs. And of course, the admins always know exactly how to take advantage of the inexperience and naivety of newcomers.
There is yet another factor which has more to do with investors who are already involved with HYIPs. This factor is an attitude of undying optimism that every new program will be different and that perchance, luck will come with the new program. HYIP investors have for long continued to have this kind of unreasonable optimism despite the fact that history has been repeating itself - much to the delight of HYIP admins.
In addition, there is the operation of HYIP monitors. HYIP monitors, as the name implies, are there to keep some degree of watch on HYIPs as well as providing existing and prospective investors with information about HYIP programs. But there is another purpose that monitors serve, and that is the advertisement of HYIPs. Owners of HYIP monitors (who are also usually faceless; did you notice this?) benefit because admins of HYIPs pay monitors to feature their HYIP programs, plus the fact that owners of the monitors gain referral commissions from the signs up of new investors. The existence of monitors is an important factor in the continuity of HYIPs because monitors give the HYIP 'industry' some semblance of legitimacy, for there are many investors who put their minds at rest by the mere fact that they believe that a program is being monitored. HYIP monitors want HYIPs to continue to exist because it is in their interest that HYIPs continue to exist. Hopefully, this article is going to be an eye opener for many people. HYIPs are unregulated entities. You won't see anyone that is registered with the Securities and Exchange Commission (SEC). Let's get this clear: the selling of securities is a very serious corporate matter, and the authorisation to do so is not something that faceless private individuals can easily obtain. In most cases it is popular, well-established, government approved corporate entities - and NOT faceless private individuals like 'Sam Serino' or 'Roman Novak' or 'Alex Rege', that get official approval to sell securities! ln fact, the best a HYIP can do is to lay mere claims to being registered with SEC, with the hope that investors will never bother to go as far as trying to fully investigate - and it is true that the vast majority of people don't bother to investigate, since they are enticed by the prospects of gains as much as they are often motivated by greed. Greed, therefore, could also be said to be one of the factors that account for the survival and continuity of HYIPs. The temptation to invest money (and practically do nothing else) in an online program in which the returns on investment are much higher than what obtains in conventional, regulated financial institutions, is so great that few people are ready to hesitate to do second thoughts before taking the plung.
Finally, there are those people who are natural gamblers with extra money to ‘throw’ about. For the most parts, such people are experienced HYIP players who always know what would normally happen to any program – except the exact date it would happen. This category of people see the whole thing as fun, and because most of them are rich, they hardly feel the pain as much as other investors when programs go down. Usually, when one program goes down, even if they suffer loses, they are simultaneously making gains in other programs and this goes a long way in helping to cushion the effects of their lose, and at the same time putting them in a position to remain in the game.
Is HYIP a job? Capital NO. Don’t ever take it as a job or rely on it as a source of finance. Is it a business? I would rather say it is more of a game or gamble, for if we should call it a business, it might mean that we have inclined a little to the side of those who unwisely perceive it as a job.
Long ago, I stopped encouraging people to do HYIPs, as I personally gained more experience. For in fairness to my prospective downlines, while it is true that I occasionally invest in one or two HYIPs, I wouldn't want to encourage other people to do the same because I know that not everyone has got the same level of investment experience, smartness and luck that I've got. Simultaneously, I gradually began to remove HYIPs from the CASH ARENA page of this web site - as part of my slow and gradual process of disengagement from HYIPs. However, just as I earlier said, once in a while I still put a tiny fraction of my money into certain programs that appear strong (and that is why I still retain a space for the listing of HYIP programs on CASH ARENA) but the good thing is that for the most parts, I gain. In most cases I know when a program has reached its peak and could even predict its closure with just a little margin of error. At other times, my reason for listing HYIPs on the CASH ARENA page is simply in response to the demand of certain visitors who write to me, asking me to list HYIPs on HYIPs section of the CASH ARENA page. Thus, on those few occasions when I list HYIPs, I might even not invest my own money into such programs but instead earn money in the form of referral commissions paid on the investments of those who chose to risk it. And just as I have already been notifying a lot of readers, sooner or later I will remove the column for HYIPs altogether from the CASH ARENA page.
I wouldn’t know whether this write-up could be described as a contradiction of, or a rejoinder to, What You Need To Know About HYIPs, an article also written by me and posted on this site some years ago. Readers are free to judge. For me however, this latest write-up is meant to balance whatever I said in that other article, since my calculation is that after reading both, prospective and active investors will be in a better position to make good decisions.