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.

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