Beginner's Guide

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General Information

Ponzi

How to avoid a fraud? This problem concerns almost all participants of high yield projects. As the HYIP specifics provides no transparency of economic transactions dishonest dealers organize false projects and make them seem real investment programs and then after they collect money from the clients suddenly stop their activity.

One of the most popular forms of deceit is Ponzi. Ponzi is a classic financial pyramid where the profit is created not due to the effective economic activity but by attracting investments of new project participants. Similar projects are like a snake eating its own tail. Up to some moment it looks stable as the payments are provided with real money invested into the program by new members. However, the impression is false. At some point there comes the stagnation and new members stop joining the project and the pyramid breaks down. However, sometimes the founders do not wait till this phase and get lost with all money they have accumulated. As a rule, clients learn it when they stop getting regular interests on their accounts.

How one can distinguish Ponzi from the real HYIP? There are several signs indirectly indicating the project may be fraudulent. First of all, it is great every-day payments. If you are offered to be paid 40% per day think how the founders are going to provide such profitability. Secondly, it is very big partnership payments. Serious high-yield projects are always open for mutually beneficial cooperation; however, their main goal is to bring profit from effective investing. That is why if you are offered more than 10% for the referrals you ought to think whether the clients are the only source of incomes. And, finally, it is a carelessly designed web-site and the content stolen from other resources. Organizers of Ponzi projects know in advance that the program will get closed in some time that is why they do not pay any attention to creating a functional design and information content.

One more popular fraud forms is the so-called Ā«Golden GamesĀ». They are a kind of miniature Ponzi introduced just for a few days or weeks. The only difference from Ponzi projects is that they initially are positioned as financial pyramids.

Users invest money and then, if they manage timely to leave the program they have some profit. If they dont, theyll lose all money invested. There are several versions of the Golden Games but they all end up as who-will-be-on-time game. Surely, programs like this do not have any relation to serious HYIP projects.

Some people eagerly participate in the Golden Games and Ponzi projects. Of course, such projects may quickly bring rather big profits however you should not forget how quickly they can make you lose everything. Moreover, not always the skill to make a decision quickly and calculate the time when you enter and leave the program right can help you in programs like these. Often organizers friends and acquaintances participate in such projects as stool pigeons; surely, only they will get the profit because they have all the information from the inside. The risk level when you participate in such programs is many times higher than in serious HYIP, and the income probability is many times less.

If you reasonably decide to check your chances in Ponzi, remember even if you are lucky, your profit will be created at the expense of other people. Do not forget that the financial pyramids are illegal and their creators get a sever punishment from the law-enforcement.

In case if you select an interesting HYIP project and fear it is a pyramid, carefully study the terms stipulated by the program leaders. Analyze the offer, consider the mentioned numbers with other suspicious features indicated earlier. Start making serious investments only when you make sure that the project is safe: at first invest little. Only then, when you are sure your interests regularly get to your account, invest the rest.