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We have started a discussion on Ponzi Schemes, HYIPs programs and e-currency scams in a previous article. In this article, we will analyse the role of HYIPs Rating websites. These websites specialize in the rating and promotion of HYIPs. Many people seeking the best HYIP programs to invest their money will check such websites, where the administrator rates the various programs and basically reports whether or not the interests of 'test' investments in various HYIPs are paid regularly. Most HYIPs are of course interested in getting listed in such websites where they get visibility and new 'investors'. The way such rating sites work can vary from site to site. A basic mechanism is that the administrator of a rating website will himself invest small sums in various HYIPs and report on his website whether the interests are paid regularly. In more complex sites, also users can rate the HYIPs, and a ranking is established on the basis of the users and admin ratings.
By itself, the existence of HYIPs rating websites is telling something sad about the reliability of HYIPs. Can you imagine a website telling you which of the major banks of your country is still accessible to customers and allows customers to access their accounts? No way. You expect your bank or favorite investment agency to be there to stay, to be reliable and accessible.
When you recieve your monthly savings statement from your bank, can you imagine having a reaction like: "Hey, the bank is still there, this month they sent me my statement, isn't this fantastic? I'll go straight ahead and post these great news on my favorite bank rating website" So, the mere existence of HYIPs rating website should raise an elbow on HYIPs. Let us analyse this phenomenon further by taking in consideration a couple of point of views on HYIPs, the one of the HYIP admin (the scammer) and the one of a potential smart investor who is aware most HYIPs are in fact Ponzi schemes.
The scammer is basically operating a Ponzi Scheme. As we have seen here in order to run smoothly the scheme continuously needs new 'investors' to be recruted. Existing investors, or at least some of them, have to speak loud and say they indeed got their investment returns as promised by the scammer. This will encourage others to put their money in the program. So the scammer initially have to pay the revenues to people that will publicly say they were paid, that everything is working fine. The HYIPs rating websites fulfill this role perfectly, that's exactly what these websites do. All HYIPs pay dividends at the beginning of their operation, as Ponzi did, and rating websites are the perfect place to advertise this. An additional consideration on the psicology of the scammer: if I were running my own HYIP, I would be particularly carefull to regularly pay the dividends of all the administrators of rating websites in which my HYIP is advertised/rated/listed. Paying the dividends to somebody who will tell the world I have done so right after, is of course the best investment I can do to keep my Ponzi scheme running. At a time in which I might consider starting NOT to pay some of my investors, I would keep paying all the owners of a rating website who invested with me, to try to stll keep a good profile for my HYIP on rating websites and grab all I can from late and new investors before just disappearing: as investors in HYIP programs, administrators of HYIP rating websites are greatly favoured with respect to regular investors, the same way an evaluator from the Michelin Guide who presents himself as such in a restaurant will most likely get a better treatment with respect to an anonymous customer. Let's now imagine I am a smart HYIPs investor. How could I possibly get a better treatment from the program administrator, with respect to an anonymous investor? Can I come-up with a better investment strategy then just giving 1000$ to a random HYIP and hope the admin will pay me regularly and not run away with the money? Even if I do know as a fact that most hyip programs are ponzi schemes, can I adopt a strategy to profit from them anyway?
Here's an idea Instead of investing 1000$ in a single HYIP, I could invest 10$ in 100 HYIPs. Knowing that I am probably getting into Ponzi schemes, investing 10$ should ensure a better return then 1000$ for the simple reason that a scammer is more likely to keep a customer happy paying the interests on 10$ than on 1000$. When the scammer enters the phase in which he starts NOT to pay the revenues to some investors, he will start by not paying the ones who invested more, the ones who should get more money. On the contrary, he could decide to still keep a number of investors happy, possibly the ones who invested less. In short, when the scammer begins to 'close' the business, he might for a while continue to pay and keep happy most of his investors, the ones that invested less who will continue to spread the 'good news', while not paying those who invested higher sums. For this single reason, investing 100 times 10 dollars might be a better strategy than investing 1000$ once. But I could do better than that to ensure higher revenues. I could tell every single HYIP admin in which I am participating that I will regularly tell other people if I got paid or not. Even better: I will post the payments (whether I was paid) on a public web site where lots of potential investors will see how's the investment going. By doing this I will put myself, to the eyes of the scammer, in a priviledged position with respect to a random investor. So what kind of web site can I set up to achieve these goals? Well, that's exactly what we are talking about: I will set up a HYIP RATING website. I will have the following advantages: - I will invest very little with every single HYIP, minimizing the risk per HYIP
- By investing little sums it is more likely I will the money back and the interests
- By publishing the payments on the website I will probably among the last to be 'dropped down' by the scammer as I am in fact promoting his business, helping him scamming other investors
- By appling this strategy to hundred of HYIPs at the same time, I migh well get a real return, a really High Yield retun of my investments.
So can I trust HYIP rating sites? Probably (difficult to be sure on the Internet) the HYIP ratings published on rating web sites are often true, in the sense that when ad admin says he was paid by an HYIP at a certain time, this might well be true. Does this mean that you can trust this HYIP? No, as it remains true that most (if not all) HYIPs are Ponzi schemes. In a Ponzi scheme the fact that somebody is paid is normal, that's how it works. In fact, from the 'system' point of view, the admin of the rating web site is 'collaborating' with the scammers to attract other investor (victims of the Ponzi) into sending money. The admin of the rating site get profits from this in the form we discussed above, and often in other forms such as: - Selling advertising space to HYIP programs
- Getting referal fees from HYIPs
If most HYIPs are Ponzi schemes, as it is the case, most rating sites are somewhat 'organically' part of these schemes and profit from money that comes out of the pockets of victims of such scams. In conclusion, what is the best strategy to profit from the HYIP world? What about staying away and finding more serious opportunities?
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