Are all High Yield Investment Programs Ponzi Scams?

This is a question I just answered on MMG:

I’ve been reading a lot of HYIP programs on the website, and was wondering if HYIP is reallya ponzi scam

My answer:

Unless something miraclous changed in the past 2 years? They are indeed all ponzi’s. It’s people with right intentions but not a whole lot of business sense (delivering value) and experience who set those up. You’re better of finding a managed forex company. Which is what HYIPs are supposed to be … but aren’t

And follow up:

Well law is not my expertise, I’m more a nerd. However there are HYIPs that seemed great on paper, might even have an actual corporate team … and still they scam us. That’s what happened with big HYIPs in the past; Tradelite for example … where I lost quite some cash. They were pretty smart with setting up offshore accounts and/or untraceable LTDs (Panama, Belize, Virgin Islands are popular), or forfeiting documents / names, proxy / white label domains, virtual offices and/or postboxes (thus not having an office or place you can visit), etc. Making doing due dilligence pretty difficult as well.

And our friends from the FTC only work within USA borders (to my understanding). Internationally the FBI does something. What usually happens in both those cases is they will freeze the bank accounts … and you will never see your money again. The good news … if the bad guys don’t flee the country, they are going to jail. But that won’t help us really. But that’s cases with ‘the police’ interfers, and they usually only interfere when we are talking about million dollar accounts.

In most cases online crime pays. It’s a sad development, and is happening again on a large scale these days. Cause there are a lot of people who are being hit hard by the recession, and looking to make a quick buck on the internet, and without knowing what to lookout for or how to spot the differences between good and bad … they will run straight into the arms of scammers. Who are ROFLMAO that they did it again.

But yes I’m biased about HYIPs. As I mentioned earlier the idea behind a HYIP is a noble one. For example trading forex, when you’re good … it’s not uncommon to make 300% profit within a few seconds. Of course you will also lose in the bad days, but a good forex trader makes about 30-60% profit a month. Mold that into a managed investment program, with MT4 (metatrader) life statistics sharing, and it could be something great. I know it’s possible, would be nice to hear from some other members if they have some suggestions in that area.

and …

BTW .. if you can accept upfront that all HYIPs are ponzi’s? Then you can make a substantial amount of money by riding the ponzi wave like a real cool surfer dude. However do keep in mind that while you might earn a great chunk of money, you are doing this at the backs of people who joined last. That’s the reason why it’s illegal by law at almost every country on the globe.

and final …

It’s not always a scam when things go south. But yeah, 99% of them do. If they didn’t they would survive beyond 3-6-12-18-24 months milestones. I mean it would be mutually beneficial for them to keep in business, as there’s a win-win situation. But they don’t. So you can’t make long term residual. You can only hope it lasts long enough for your investment to mature, and hoping you can deduct that from your account balance to invest in the next big thing. People use investment techniques like diversification in ponzi’s. It’s … interesting )) (read: CRAZY!) And talking from personal experience. You cannot do what you don’t know about.

Source: moneymakergroup.com/Isn-t-Hyip-Ponzi-Scheme-t411069.html

Long story short. I’ve made a lot of bad decisions in my life, but in HYIP I lost by far the most money … $40,000USD in total. Took me years to earn that all back. If you’re serious about success? Do NOT join HYIP.