10 Things Newbie Should Know About HYIPs

Very often investors, especially the new ones when jumping any HYIP come to conclusion that is the best choice ever to make lots of money doing nothing at all. Obviously the idea is wrong and most often leads to funds loss. The main reason for this to happen is bad knowledge about HYIPs from wrong people, and even worse, without taking care of professional experience these investors jump into this type of business thinking about it like a game. With a view to educate the newbie investors it is a must for everyone to know the main 10 things about HYIPs to be able to explain them to investors and learn yourself.

One should never trust the HYIP admin saying his company or website or just a project runs some sort of business to make money. Always keep in mind, it is impossible to earn such high profits as declared by many HYIPs running any legal business one can imagine. Even in case there's a real business background behind the HYIP scheme, it always remains a Ponzi scheme after all. The notion of Ponzi scheme implies paying to old investors using the deposits made by new ones. As the result sooner or later it may result in problems with payouts when a HYIP becomes lack of money. This scheme is applicable for every HYIP.

The golden rule of the HYIP investing says the following: "Never invest more that you can afford yourself to lose" Indeed it's the truth. Whenever you enter the HYIP business you should be ready for losing your first deposit due to lack of experience, knowledge and other investment skills. It may take some really long time before you can count on constant passive income earning. Moreover, even having good knowledge and lots of experience you should be ready to lose in some cases. The main point here is to reach positive balance between your funds lost and funds earned. That is pretty hard indeed.

Lots of newbie investors fall into nice pictures, attractive video presentations of HYIPs, the documents of company registration shown on the hYIP website. Please don't get mislead with that. They are extremely easy to get, if you have money. Once a HYIP has a pack of promotional material it means just one thing: the admin of HYIP has spent more money and time than others before launching his program and quite possibly it will take more time to compensate the funds spent on the program development and possibly this kind of a program will last longer than others. Still sooner or later it will fall down just like any other HYIP.

There is also another warning against another trick used by many programs in order to gain more popularity among investors. Some HYIP admins offer various webinars and also send attractive newsletters and using these dirty tricks it may be some sort of brainwashing. Itf you fall into large promises of the admins, get ready for the big loss after all.

Another rule before adding any of the HYIPs to your investment portfolio is to make the due diligence of the HYIP relying not just upon the listing sites. The most valuable information can be accessed on niche forums checking for the payment proofs from other members and asking as many questions about the HYIP performance.

One more advice for the inexperienced investors is not to use compounding option until you reach the profit zone. The best here is to withdraw every part of profit when possible. By doing that you will minimize risks of losing funds to the utmost.

And finally keep in mind the diversification rule. You should not invest all the money into one program. "Never put all eggs into one basket" rule is the basis when making your investment portfolio. Splitting your funds between various HYIPs will keep you making profit even when one of the programs in your portfolio collapses. Also spending large amounts is not a wise solution at all. Large investors always have more chance to get trapped into scam sites than those spending decent amounts. That is why in case you have a budget of $500, the best recommendation is to find several worth attention websites and spend into them.