Investing in HYIP. How the profit is formed?

Many prospective participants of high yield income projects think about where the organizers take such big money that they can regularly pay very serious interests. Incomes, surely, do not come from nothing. In serious HYIP experiences managers, professionals developing and realizing many high income projects work over the effective investment schemes.

So the main sources of incomes in High Yield Income Programs are the following:

1. Investments in FOREX market.
2. Trading of stock of different companies on international stock exchanges.
3. Participation in different commercial sweepstakes.
4. Investing into high-yield business
5. Import and export of scarce goods.

That means, actually by accumulating money of the participants, the programs leaders use them as their floating assets. Then by investing in high-yield projects and actively using the off-shore status they create the profit not subject to taxation. As the result there are sums enough to support the HYIP activity and to pay charges to the investors, as well as to further expansion of the program.

People distant from complex economic processes may think it is unreal that over a month the amount of the investment may double or even triple. An experienced investor always may predict which investment will bring profit and which will not. Having wide knowledge and serious experience he/she is able to easily make profit from price fluctuations to some goods.

Many investors have made huge fortunes on the currencies rate fluctuations. Trader who knows the specifics of currency market over just few hours may double the invested capital. For example, trader has 100$ and he/she is going to speculate for Euro fall and long for Dollar. Trader takes 9900$ no-interest credit and sales 10000. Then he/she buys Euro at the rate 0.9755 and in a few hours resells it at the rate 0.9845. Then he/she pays off 9900 to the broker and the pure profit of the investor is 90$. So the deposit increases 90% less than in 24 hours.

Surely, for an inexperienced investor an attempt to play for currency rates fluctuations may result in financial crash. Instead of prospected profit he/she will bear significant damage. Actually, the role of all high yield income programs is to create some initial fund of money from investors contributions and then using various economic schemes to distribute it among profitable projects. Within HYIP there is no industrial processes, projects managers do not just manage your capital but help you to multiply it. HYIP is an agent between a private investor who does not have possibilities and knowledge to effectively play on the market fluctuations and high yield economic formations.

Of course, besides for the currency rate play there are many other effective methods to invest money, for example, buying securities of organizations which work well in the developing countries. Such financial instruments are risky but the risk is compensated by their high profitability. Besides the HYIP leaders prefer to reinsure and place the part of the invested funds into securities of the highly reliable companies.

Good HYIP will never lie to its clients because high yield income programs are an ideal example of mutually beneficial cooperation. By effective management of the investors capital the program organizers get enough income to pay interests to the investors and have profit on their own.

The rate of capital circulation, for example, on FOREX significantly increases the circulation rate during regular business activity. In 24 hours one can perform several high-yield transactions providing every-day or every-week payments.

However, you should not forget that the majority of projects organizers prefer keep information about their income sources secret, fearing unfair competition. That is why often the high yield income programs are not absolutely transparent. However, it does not influence the regularity of payment and programs trustworthiness. High Yield Income Programs leaders knowledge well the fact that the effectiveness of mutually beneficially cooperation are not likely to risk their investors trust.

At first we should explain what HYIP is. High yield income programs are not just a network phenomenon. This term refers to any investment bringing income more than the deposit account with the standard rates of 4–5% per year.

There are many off-line HYIP, they are all managed by registered companies and bring stable high income. However, the entrance limit, the minimal investment to participate in the project, as a rule, makes up the sum starting 500000$ and up to tenth millions. Surely, the private investor not having big savings is isolated from participation in the off-line high yield programs.

For ordinary people the only way out is on-line HYIP. On the contrast to off-line programs network high yield income programs, as a rule, are minimally transparent. Often the participants do not know anything about their organizers and do not know the companys legal address. The main income sources for off-line HYIP are the stock market games, real estate trade and FOREX investments. On-line HYIP rarely give true information about its commercial activity that is why the income sources may be very different; it is often impossible to check the information. Often the information is secret not to hide it from the clients but with a view to keep the know-how confidential. The competition at the HYIP market is rather high that is why the company that is able to offer the most rational way of managing the invested assets has more chances to succeed.

In accordance with the interest payment periods all on-line HYIP (further we will call them HYIP) may be divide to every-day, every-week and monthly ones. Every day HYIP make payments of 1–7% per day; every-week — 7–50% per week, and monthly — 20–200% per month.