HYIP (High Yield Investment Program) is any investment program that offers high return and goes along with an corresponding high level of risk. Obviously from its name, an HYIP offers relatively higher returns compared to normal types of investments.
- 90% is just a SCAM by which I mean: you don't get paid at all, not even once!
- 9,9% is a "Ponzi Scheme" which pays you back with your own money and money from other gamblers and it's named after Charles Ponzi
- 0,1% is a legitimate business which actually invests the money and gives you a - small - share of their profit.
A Ponzi scheme is a program that pays returns to investors with their own money or with money paid by subsequent investors, instead of paying returns with actual profit earned. A Ponzi scheme is not sustainable as eventually the amount of money promised in returns will exceed the amount of money invested and there will be no way to pay investors. Many Ponzi schemes never make it to the point where the program is unsustainable, instead turning into a scam while the program is still profitable.
A scam, on the other hand, is blatant fraud, or intentional deception made for personal gain. These are programs created with no intention to pay the investor and are created with the sole intention to steal investors’ money. Scam programs are nearly impossible to identify from other programs and usually can be classified as one of three different types of scams:
- Quick Scam – The program closes before any payments are made.
- Timed Scam – The program closes at some predetermined time set by the admin. Most programs are timed runs that run for a certain number of cycles or until a certain amount of money is deposited by investors.
- Ponzi Scam – The program was set-up as a Ponzi scheme, unfortunately the program is no longer making money and is paying out more than it is making. The admin, with the program failing takes what money is left and runs.
Legitimate programs are what we’re all looking to invest money into. They are the small percentage of programs in our industry where a large amount of money can be made. It is also possible to make money as an investor in a Ponzi scheme. If you are among the earlier investors, there is an increased chance that you will receive payment for your investment before the scheme ends.
Unfortunately, it is impossible to know which investment programs are Ponzi schemes, which are scams, and which are legitimate programs.