The HYIP Philosophy of One Investor

Updated: 02/28/2007 16:20
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the hyip philosophy of one investor
The philosophy of investors. Common mistakes of newbie investors, useful tips and pieces of advice for both new and experienced investors.
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I write a lot about the HYIP, Forex, his traders and brokers, scam and etc. The most important thing to me in my writing is that my articles must tell about the most interesting and relevant events and also some historical facts in HYIP, and give useful pieces of advice for experienced investors and the beginners. I do my best for the HYIPnews audience. But I am looking for new challenge constantly.

That's why I decide that in this article I should tell more about the real life and practice of HYIP investors, in other words, "The HYIP philosophy of one investor in two parts" will tell about the mistakes the investors usually made in their HYIP activity. I will not write the name of the investor who told me this story because he does not want to become famous in such a way. But I name him the HYIP wiser.

His favorite words are "Without mistakes we can't learn". As you can see later if you read this article till an end, he learnt a lot! There is no doubt that every serious investor is responsible for his own investments and should not invest what he cannot afford to lose and that this information should not be taken as financial advice.

His first mistake was spending too much too soon. This is probably the biggest mistake the HYIP wiser made in HYIP land, and the one that taught him the most. In his excitement he invests all of this profit into a single HYIP that the investor found in the top of one of the rating sites. It's been rated in the top 3 for the last 6 months.

Everyone was writing rave reviews about it. Not even 7 days later and the warnings started to come. By that stage the poor HYIPer could see his investment drifting away. That investment had taken him over 4 months to earn. The experience gave him a real good wakeup call. Up to that point this investor has been putting large chunks of his investments into individual HYIPs. That's when the HYIP wiser realized what people meant by "test spends".

After gaining more experience with HYIPs my wiser realized that a single test spend is not enough. Some HYIPs will pay investors for small spends, but when it comes to real (larger) spends they will not see a cent of profit. And you cannot rely on rating sites feedback because sometime they get better treatment from HYIP admins! So nowadays he spends a little at a time gradually building his active balance.

Then he made the second mistake, namely, not testing the withdraw function. I guess that it has this ever happened to you: you've invested in an attractive HYIP, your profit is growing day after day, and everything is going nicely until you decide to withdraw some of your profit. Either the withdraw function does not work at all, or your withdrawal is forever pending. After the wise HYIPer make his initial test spend with any HYIP he does a test withdrawal.

Focusing on individual programs instead of the overall plan is one of the most common of the HYIP investors. The HYIP wiser made this mistake too. According to him, everyone has their favorite HYIPs. Those HYIPs that pay the investors regularly and they feel comfortable with. However, every time the wiser finds himself focusing on his spends on one particular HYIP he remembers a piece of advice that he once got: "Focus on the overall plan and not on individual HYIPs".

This is a fantastic philosophy for managing a HYIP portfolio. When you think about it, putting our faith in one, two or three individual HYIPs doesn't make any sense given the nature of these businesses. So taking this philosophy my wiser would much prefer to have 10 programs paying him $100 each to a total of $1000 than having two programs paying him $500 each.

It would be even better to have 30 programs paying a little bit each. Obviously it's a lot harder to find 10-30 solid programs instead of focusing on 2 beloved HYIPs. But according to the HYIPer, focusing on the overall picture and building multiple income streams helps him sleep at night.

My HYIP wiser tells me: "Don't get your original spend back quickly, Nicole!" I'm sure you've heard this is a number of times before. He points out that the investors should always get their seed money back as soon as possible. Given the fact that most HYIPs tend to fold within 6 months or even sooner, this does make sense. Figuring out when to start withdrawing your profit is more of an art than a science.

For example, should you deposit a large amount and start withdrawing straight away? Or deposit a small amount and start withdrawing after one month? This really depends on how long you think the HYIP is likely to last and how long it takes to get your original spend back. To date, all HYIPs tend to either slow right down: like one of the original cycles that has been around for 2 years and now has a 200 day+ cycle time; or they go out of business within 6 months.

Another important thing the wiser told me is that he believes some HYIPs have good intentions but fail to manage the business side of things correctly so they close shop. In other words, he does not believe all HYIPs that disappear are scams. Given the empirical evidence it is best to plan your strategy based on the worst possible scenario.

The HYIPer points out that a rule of thumb is to withdraw your original investment as soon as possible then from there on keep half the profit and reinvest half. Besides, he believes having a clear monthly plan is the key to being successful with HYIPs.

At the start of every month he asks himself the following question: "What if one of my main investments goes under this month... will this be a problem for me?" Based on the answer my wise investor can decide how much he should withdraw, how much he should reinvest and what new HYIPs he should join.
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Getting greedy is one of serious mistakes of HYIP investors. My HYIPer says that making money with HYIPs is not really the problem. It's keeping the money in our pocket that becomes diffult. The temptation to reinvest every single cent to keep our profits growing is so great. The HYIP wiser tells about a program that was paying 5% a day for 30 days.

Every day he woke up and checked his e-currency account to find a nice little deposit. A couple of weeks passed and things were looking good, so he reinvested all of his profits. This went for about 3 months. By this stage the HYIPer grew his investment with this program by reinvesting all the profit.

Unfortunately the program stopped paying. Obviously he got a bit greedy and wanted to multiply his profit quickly. As mentioned before, a better approach might have been to reinvest half of the profit and take the rest to invest elsewhere.

It is very interesting to watch some of the rating sites and how their Top Rated programs seem to fall one after the other. "Maybe it is because all HYIPs have a limited life-span? Or is it because of all the rumors that start floating around once a HYIP gets in the spotlight?" asks the investor.

According to the HYIPer, it is necessary to mix his program selection with some well known HYIPs and some more obscure programs. The ideal HYIP of my investor is one that is not in the spotlight but has been paying successfully for a while (4 months or more).

Some HYIPs seem to struggle when making large payouts. My HYIP wiser recalls a HYIP that became very popular all of a sudden after being rated high on one of the rating sites. Within 3 weeks a number of large investors had started requesting withdrawals. It quickly became apparent that the admins did not have the funds available to make the payments.

It is possible that they were scammers who were not really investing the funds, but it is all possible that they had invested all the funds and did not have enough liquid funds to honor the withdrawal requests. Either way rumors flew or things spiraled badly. They were out of business within a couple of weeks. The HYIP investor finds that making small, regular withdrawals is often better for everyone.

The wise HYIPer mentions that it is advisable not to invest without doing any research. If you are like this wise investor, the last thing you want to do when you find a promising HYIP is to do a whole heap of research.

But then came that time when the investor made a deposit only to find out 10 minutes later on one of the HYIP discussion sites that they have not been paying for the last 5 days. As to my HYIP wiser, how can these programs stay online even after they have been proven not to be paying! Someone must have forgotten to press the off button on many of these HYIP scripts.

Another point in the HYIP philosophy of my investor is investing big at the end of the year. One day he told me about a HYIP case. At the end of 2010 a hand full of solid HYIPs started to come out on top. More and more people invested big into these "safe, established, sure things". Things were looking good.

It was not until mid December that things started to fall apart, in a big way. One after another these established HYIPs started falling. There is no doubt that online marketing hits rock bottom around Christmas time. People do not have as much money to throw around. In fact, many people probably start withdrawing their HYIP profits around this time leading to a mini-HYIP-recession as it seems. This is an established trend that seems to appear online year after year.

In the conclusion of the story about the mistakes of my now wise big HYIP investor, I can surely say that six months into HYIPs he realized that he was tracking the wrong things! The investor was keeping track of all his individual deposits and withdrawals, which is great.

But the problem was that the HYIPer did not have an overall picture of how his portfolio was performing. He was not able to say exactly how much he had put in, what his portfolio is worth, his overall returns to date and his project returns for the coming month. After experimenting with a few different Excel spreadsheet designs my HYIP wiser realized that for him the key is to keep his tracking sheet very simple so he can see the big picture.

Here are some of the main things that the HYIP investor track for each HYIP:
- Name
- Web Site Address
- Investment (amount invested from e-money, etc)
- Worth (what's the current investment worth in this HYIP)
- Earnings
- Earning vs Investment ratio
- Projected profit for next month
- Any comments, interest rate, concerns, etc.

This way the investor can list all the HYIPs on a single page with a total at the bottom. By focusing on these high level numbers as opposed to the individual deposits/withdrawals he is able to see the big picture, where he is over exposed, where he is having success and a lot more. Putting together a suitable spreadsheet makes the daily task of tracking your HYIPs a pleasure.

At the end of the day making money with HYIPs is as much an art as it is a science. By setting and following your own rules you can dramatically reduce your risk of losing money and hopefully significantly tip the balance in your favor to make some serious returns. I hope that this story about the HYIPer's mistakes would be the last one in my writing career.


About the author

Nicole Berger has over seven years experience writing and editing for online and print media. She has held various editor and associate editor positions in some of forefront independent media publications. A consistently dependable team player, I thrive in a high-pressure environment, enjoy the challenges of meeting deadlines and managing a team, and am comfortable researching, writing and editing on a wide range of topics.
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