The investments collected by these firms are generally very small amount like $100 or so. They claim that they will give you a return of 1% per day. Yes you are reading it right it is 1% per day not per month.

So you can imagine the kind of return they falsely assure. Sometimes they even claim to give 250% return per day.

The very nature of return they assure will bring up the question that why do they need small time investors when they can book such huge profits. It remains as a million dollar question without any answer.

Basically "HYIP" is a Ponzi scheme which actually pays the investors out of new investor's money not by the revenue generated by the real business. These kinds of scams continue as long as they get new investors or old investors that don't ask for the returns due to their greedy nature to reinvest their return for higher profit.

"HYIP" never discloses their location, people behind the organization etc. they just tell that they are going to invest this money in some stocks or other high return business like mining.

Generally these types of HYIP's operate from outside the U.S., Europe and Japan as the law against unregistered investment groups are very strict in these countries. Also these HYIP operate for a very short span of time and once they are known as a scam they simply shut down the operation.

Lately with the introduction of e-currencies like e-gold and net pay it has become easy for these HYIP's to operate on internet and attract large number of clients across the globe.

They use spam mails, networking forums and mailing lists to reach people. They offer up to 9% for referral which is very lucrative.

PIPS (People In Profit System) is the largest known scam in HYIP. This was brain child of Bryan Marsden who started it in 2004. Its popularity was such that within a short span of time it spread to over 20 countries. PIPS is now being investigated by Bank Negara Malaysia.

According to the investigation there were around 3500 HYIP scams during the period 2004 to 2006. Every day around 5 new scams are reported. Maximum number of scam prefer e-gold as their online payment system to others.

In early HYIP started coming in a new form. The owners of these so called "ponzi structured game” clearly states that one should "not invest money one cannot afford to loose". Also they never guarantee the return on investments. This is somewhat a honest version of "HYIP".

The promises given by owners of these ponzi game is not bound by law. Also these ponzi game owners will structure the ponzi schemes in such a way that most of the investors will not get into top of the pyramid and thus loose their money.

It is even worse than gambling because you will never know what is happening inside the Ponzi structured game. Also you should be aware if at all you win money from HYIP you are answerable to law as it is illegal in U.S.

I have invested in a HYIP to only see that I have lost some money in the end. You can call yourself successful in HYIP if you are able to get 50% or more on your investment. If you are unsuccessful then you have lost 100% of your investment.

More often you will find more of unsuccessful people in HYIP than successful people.

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Best Wishes,

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