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In this article I’m going to tell you what I’ve learned about HYIP games and why I’m no longer playing the game. Although I’m going to write as if it were fact, please remember that this entire article is strictly my opinion. Some of what is in the article is in Jude’s article “In the Game… or Out.” You can consider this article a follow-up to that one. However Jude did not read this prior to publishing, so I’ve no idea whether his opinion mirrors my own. Program owners are not going to like what I write. Readers please form your own opinions from your own experience and many sources.
HYIP Games Defined
What is a HYIP game? It is any program that is based on new members, new money and/or gambling. Gambling includes playing other HYIP games, betting, sports arbitration and forex. Basing a program on new members and/or new money, it is pretty easy to see why it will fall eventually. Just like a house of cards, if you put too many cards at the top, it will crumble. But, why did I add gambling? There are some really good gamblers/investors out there that can sustain a program for quite a while. The problem comes when a program grows too big (especially if it is a fast growth.) Just how much money can the gambler handle? What happens when some of the gambler’s bets fail and payouts are due? They either try to make a bigger gamble to make up the difference and put the HYIP game players on hold or they fold the program. All gamblers lose sometimes.
Looking at my definition above, it includes all autosurfs that I’ve ever seen (and I’ve seen hundreds.) It also includes 99% of online HYIP programs, forced matrices and any other name you can tag on a program that fits. Now before I ruffle too many feathers, I truly believe that the majority of program owners start a program believing it will work. They are for the most part warm, honest, good-natured folk that relate really well to their followers. Several of them work out what they believe to be a good business plan. If you ask them about their business plan, they will tell you about all the positive growth and why it will work. What they don’t include is what they will do when things go wrong. They act as if things out of their control won’t happen to them. However, the internet is full of the things that have gone wrong before. Why don’t they learn from predecessors and plan for the inevitable mishaps? Because if they did, they would have to admit that their program is likely to fail. There are also a lot of program owners that are not honest and don’t intend to help their members make money. They usually start with a cheap script, like Goldcoders, and either never pay or only pay one or two rounds.
Winning the HYIP Game
There is one way to win the HYIP game. There are several people who are doing quite nicely and I’d imagine that they could even make a living from winning the game. I’m not going to sugar coat how to win. It is hard work and requires a LOT of discipline. You can not become emotionally attached to any program owner, no matter how nice they are. Some try to win the HYIP game by collecting a lot of referrals. While this method may work slightly, it’s not the way to win. Referral commissions are usually the first thing that stops when a program begins to fail.
The way to win the HYIP game is to “hit and run.” Hitting and running is going in with a big spend at the right time in a program that pays. (Forget test spends. They are a waste of time and money.) Get your one payout and move on to the next program. Do this with several programs at once and you’re more likely to gain. Remember to save some out of each win to make a living. If you always invest all you have, you’ll never have it to use. Using it to better your life is the ultimate goal.
While hitting and running sounds easy, it isn’t. As I stated before, it is hard work. First you have to study the HYIP games to determine your own criteria for picking a program that is likely to pay you. Next you have to stay on top of new programs. This means checking MANY blogs, monitors and forums every day. Then you have to resist the urge to go in for a second round (compounding or reinvesting.) Since you’ll be playing many at one time, you have to carefully track where you put your money. If your programs include autosurf, you have to remember to surf the correct number of days.
Even with the most careful plan, you are gambling; therefore some of your games will fail. Do not fret or cry “scam” over the losses. Just move on. Most of the games you’ll either get your win or the program will fold and you’ll have a loss. However, sometimes your game will get stuck in limbo. It neither pays nor folds. What do you do when your money gets stuck in a game? My advice is to keep it on your radar and continue to track it as if it is a paying program, just on the very slim chance it pays or refunds eventually.
Please remember that even a hit and run plan is HIGH RISK. You will most likely experience more losses than wins until you perfect your plan enough to increase your win/loss ratio.
Why DD Doesn’t Matter
It is always a good idea to send a series of questions to the program admin before spending. How fast and how the admin responds helps to determine if the program is worth your money. Include spelling and grammar in your criteria for evaluating the response. Beyond that, nothing else matters, unless you’re excluding owners that open and close programs more often than you hit programs. However, those are the owners that hide their DD information.
All programs have a clause about earnings not being guaranteed. When a program folds, there isn’t anything you can do about it. Sure you can get their PP account(s) closed or limited, but that’s not going to get your money back. If a program gets really huge, government may get involved (12DP), but do you honestly believe you’ll ever see a dime? No!
The purpose of a DD is to give you a warm, fuzzy feeling about investing. Forget it! Warm, fuzzy and feelings should not come into the picture when making investment choices. If you base continuing in a program on a gut feeling about it or really trust the admin, you will lose.
Conclusion
I’m sure that I will receive a rash of responses about other ways to win the HYIP game. (If you’re going to respond about how this admin or that admin isn’t like what I described and your program really works, please don’t bother.) There are probably other ways of winning. Discipline in removing your principle and only playing with profits is one I’ve tried. Pulling out XX% of profits from each spend is another I’ve tried. The problem is that if you stay with a program for more than one spend, you begin to get comfortable or worse, complacent. This is especially true for programs that last several months. At the end of the program, you’ll cry because you had so much invested and lost it all. As stated above, getting lots of referrals is another way, but that way obligates you to stay with a program until failure. There are plenty of signs that a program is going to fail, however by the time you see the signs it is usually too late to get out. Now and then you’ll get out early enough, but not often enough to win more than you lose. ONE spend per program helps to insure that you’ll get out before failure, but even one spend is not a guarantee. The spend has to be at the right time, too.
There are some real programs out there. Finding them is not easy. The mark of a true program is that they have something of real substance behind them. They let you see what that is up front. Or if the profits can be gains or losses, it is probably real. It’s the programs that only go up and up and up with no down that are most likely a game, especially if the profit is a static % to be paid at a specific time.
Please remember that this article is only my opinion. There are those that think the same way that I do and those that have a different opinion. Some will say I’m completely right and some will say I’m completely wrong. The smart person will neither agree nor disagree. They will take away the parts they think are correct and add the information to their knowledge, based on experience and many information resources.
JMO,
Sharon
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Ok….I neither agree or disagree. I hope I’m finally a smart person now….lol.
I’ve been in this stupid - yes, stupid - “industry” since November 1, 2005. I’ve learned some very hard lessons, and am worse off now financially than when I started. Test spends are a waste of time, yes. Sitting in a program and trying to build up capital to a certain level has done me in time and again. Hitting and running does seem to be the only way to really make a decent profit in this game but it hinges on this; that you have a big enough chunk of risk capital (at least 4 figures) to start with. Hitting and running with $100 isn’t going to do you much good, I would think.
So am I correct in saying that only a lucky few with a few thousand dollars lying around will succeed with this strategy?
Good article Sharon.
BBT.
Hi BBT,
TYVM! You could start with a smaller amount than $1,000. It would just take you longer. It’s like any investment. The more you have to start, the faster the build. Just don’t try to put all you got into each hit and run. Start with 2 or 3 (even if it’s $50 each) and build from there. But, don’t forget that to do this right requires a lot of time and work!
JMO,
Sharon
You mention DD doesnt work and why it doesnt work? I can tell you some more facts about this. Suppose you got a bulletproof DD. You got the admins real name, real address, real bankaccount, you were able to drive past his house, ring his doorbell and talk to him at his own house. You saw the trading account. Its very real. You are experienced in forex trading as well and after 10 sessions with the trader at the admins house you are very convinced they trade for real and that they are also very good at it as well. 9 months later the program goes bust because of a bad mistake. Your DD will only partially work. Will the admin pay you? Maybe. There is a 20% chance the admin will run away to another country. Another 10% chance the admin laughs and spit at you, knowing you cannot go to court for a louzy 1000$. 70% of the times however, yes the admin will pay you part or all of your investment. However, it wont stop the admin from not paying others. Most often the admin will probably try to make a deal with you and say “I pay you and maybe some friends you really want me to pay, in return you will have to cover my back” Now the DD did work for you. But it was worthless for others that didnt made their own DD. A DD only means that “some” people have the admins real life data(that is, if the admin didnt tricked you with fake DD, always be carefull for that!). It may guarantee that those that made a real verified DD, will get their money back if they become silence and disappear theirself. But it wont help the poor small little investor. If the DD guy dont accept the “silence” money from the admin and fight for every single investor to get back his/her money 3 things can happen. The admin still pay you, but still doesnt pay others. The admin will simply run away or he/she will say : “I see you in court”. When this happens, it takes months or years to see something back and it would only be pennies on the dollar.
This is my personal opinion as to why DD’s dont work. I love to hear some comments on this.
Peter.
Hey Sharon,
I pretty much agree with what you said… but I think everything you said applies only to a specific sub-category of “HYIP” - that is, the illegal ponzi scams/games. Of course, that would include about 99.999% of what people out there throw under the “HYIP” umbrella.
As you said, however, there ARE real opportunities out there that have something real to generate the profits - they are hard to find as you said, and have varying results.
So I say, let’s focus this blog more on the “real” stuff than the ponzi stuff.. which Jude already seems to be doing as of late.
Nice Article Sharon,
The long and short of it is that HYIP gaming/investing does work but it takes work. Much more work than most are willing to do.
So ..
They go from program to program with no real plan until they finally lose all their money and drop out of the industry.
The “Hit and Run” technique is really the only way to make a descent return on your money in this arena. There are far to many outside influences that determine the life-span of a particular program to put your faith in just a few programs and hope it makes you rich.
I don’t agree that DD is totally worthless but I do see that most people put to much weight on what they find. I think a certain amount of DD will keep you out of the obvious scams but after that, it really doesn’t matter.
Even in the so-called “real” world 95% business fail within 1 year. Out of the 5 that are left, only 1 will be standing 5 years from now.
Running a business is tough and let’s face it, most people do not have the character or the stamina to handle it when things go bad.
Running a ponzi is deceptively simple. It looks easy but they are born to fail by their very nature. Thus the “hit and run” technique suites itself well for playing the ponzi game.
I have been in the hyip business since 1999. I have made a lot, lost a lot and learned a lot. What I can say is there is plenty of money to be made for those who want to put in the time to learn and work.
Unfortunately, most don’t have the discipline to do well at this type of investing and will end up with much less than they started with.
Best of luck to you all
-Paul-
WOW! Excellent comments everyone! If you’re reading this and skipped over any of the longer comments, please go back and re-read them. All are excellent advice. (I especially agree with Cashking’s comment about Jude’s concentration on the real programs.)
JMO,
Sharon
Excellent article Sharon. The sooner people realise that doing DD is pointless in the online HYIP arena the sooner people will stop losing money.
Every single aspect of a DD document, reference and resource can be faked, photoshopped, phished.
As I’ve just mentioned in our forum, doing DD on a hyip to “prove” it’s a ponzi or a scam is like doing an experiment to prove that chicken tastes like…err…chicken.
Peter
Dealing with a real program can be helpful, but I feel it is much more important to develop an investment strategy that will raise the odds of making money no matter what type of program you invest in.
“Real” programs fail just as often as ponzi do. There are a variety of reasons why, but I suspect the biggest reason is incompetence. I don’t say that to be mean but just stating a fact.
Most programs owners spend a few hundred dollars on a script and a few more dollar on a little bit of advertising and wha-la… they are in business.
In the meantime, they no very little about marketing, public relations or customer service.
Their customer base is made of people with unrealistic expectations and zero loyalty.
The first time an owner hits a “bump in the road”, investors yell “scam” and program owner decides it ain’t worth the hassle to keep the darn thing running. Besides, they only had a few hundred dollars invested and a little bit of time.
My point being, there are so many things that go into the success or failure of program that it is very difficult to know for sure how long any program will last, real or otherwise.
So what’s a would be hyip investor to do? …..
Well, first develop a strategy that will bend the odds in your favor and allow you to make money no matter what type of program you are dealing with. ( I know, that is easy for me to say
) But it is not as hard as you might think. Just think of ways to make consistent small profits. You will be surprised how they add up at the end of the month and year.
Treat every program as a potential ponzi. If you develop a hit-run style you will make money most of the time.
Take % of profits and look to invest in some sort of arrangement where you keep control of your funds. This is where your long term growth will come from. A good MA is great candidate.
This is a slow process but it works over time. Most people will not follow it which is why most people lose money.
Happy hyiping
Really enjoyed this article so very true a lot of it. I’ve always thought most DD was useless a smart scammer has taken care of that and have their “you beaut” responses down pat. Yes there is real programs but its like a punt at the track you have your sure things and you still go for your outsiders. I suppose its what you want to get out of it “safe” or taking a wild grab for “pie in sky” with all the “rush” that brings. You can do both. Just don’t gamble the verandah or barbi. I do believe that most people just get greedy and want it all fast, so they rush off to fund with money they really shouldn’t be using here. Consistent small profits I agree that can work Profits then become your seed larger each time. No whining allowed.
Dear Sharon,
What an excellent article! I’m new to the arena and yet I can still see the truth in everything you say! I can also see the complacency in human nature and how easy it is to go “back” after your first quick kill, hoping to make “real money” now that your “test” has paid off. I’ve been as guilty of this as others, but my advantage has been in starting in the whole hyip arena with gambling money only, with a full expectation that I could go belly up in days/weeks/months and just learn from it.
What really gives me pause are the newbies who come in with some decent money and expect to be “taken care of for life” based on their projected earnings in any one or even several hyips. I’m sure decent money can be made over the long haul with a learning curve, but anyone expecting to generate a living based on starting with a little bankroll and dumb luck are begging for disaster. I see kids on the forums thinking they will be able to pay all their expenses from one hyip just by investing a couple of thousand, who seriously believe that if they say they just want “real” solid programs, they’re going to get them. For heaven sake, don’t give up your day job!
Leo, DrunkOnLife, pointed out an excellent article on this subject. Please read http://www.theratingblog.com/the-winning-strategy-another-hyip-myth.html.
JMO,
Sharon