THE HYIP PHILOSOPHY OF ONE INVESTOR

July 13, 2007

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 invertors 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 says 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, 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 said 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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