If I haven’t convinced you yet that HYIP’s (High Yield Investment Programs) are Ponzi schemes, then let me try again. The returns promised in these funds just aren’t possible. Here is an example.

PanaMoney Technologies, Inc. claims to offer up to 2.8% per day for investments over $20,000US. With this example, you would have $120,800US after 180 days and if you re-invested that amount, you would end up with about $730,000US according to the hyipinvestment.com calculator.

Even if you averaged 1% a day, a common promise of HYIP schemes, your $20,000US investment would be worth $156,800US after one year. The average house price in Vancouver is $500,000. If you were to invest that $500,000 at 1% per day, you would end up with over $2.3 million after one year. Who needs a 25-year mortgage?

Sounds incredible doesn’t it? Ask yourself this. If such trading programs were legitimate, why wouldn’t we all be investing in HYIP’s instead of in mutual funds, stocks and bonds? Or why wouldn’t other financial institutions be offering you competitive rates? Because it is impossible to deliver these returns on any kind of sustainable basis.

Here’s a guarantee you can believe in. If money grew on trees the way HYIP programs suggests it does, I would not be sitting here writing this blog. Instead, I would be retired, living in a multi-million retirement home on an exotic island somewhere in the Pacific.

To read previous posts on this and other topics, click on Let’s talk about investing.

Suggested Reading

School’s out: Time for a summer budget talk

BC Securities Enforcement Roundup – March 2013

Canadian securities regulators release 2012 Investor Index

More Resources

New Video: Using a Registered Financial Advisor

Last week we blogged about the video Informed Investing: Investment Fees, that we launched on October 9 to supplement the Guide to Investing: How to be an Empowered Investor. This week we are featuring the video Informed Investing: Using Registered Financial Advisor that discusses how to practice due diligence in researching a financial advisor or firm. […]

BC churches: target for investment fraud

  BCSC is stepping up its campaign to stop affinity fraud in the BC church community. Valley Chaplain Consultants (nicknamed God’s Fraud Squad) is organizing presentations in churches across BC entitled “Telling the Truth…Exposing Affinity Fraud.” The first two are in the Fraser Valley: Thursday, June 10, St Luke’s Catholic Church, 20285 Dewdney Trunk Road, […]