The Investor Personality in Home-based Business
An Affinity for Money
Background
If it seems too good to be true, it’s because it is too good to be true.
Investing on the web falls into three big categories open to the home business person.
Day trading using the trading systems of the big investment houses like Charles Schwab, Merrill Lynch or TDWaterhouse is a legitimate and understandable way of investing. You are essentially trading on the world’s legitimate exchanges.
HYIPs however are a different proposition. “High Yield Investment Programs (HYIPs) are all over the Internet, and while it's possible that some do make money, I’ve heard that more often they are scams. An HYIP would typically promise ridiculous returns as high as 50% a month or more. If you have done any traditional investing (stocks, bonds, options, etc.), then you know that even 50% a year is extremely difficult to attain. So right away, a knowledgeable investor should be very suspicious of an opportunity that offers such a crazy return.
It is often said that many HYIPs are complicated systems based on Ponzi schemes, where the returns provided to existing investors are paid out by the investments made by new investors who join the program. This type of scheme does not create any real value or wealth, and therefore, it eventually falls apart, usually within a year or two. If you do not pull out your funds before this breakdown occurs, you could stand to lose all your money.
Because it’s so hard to discern which HYIPs are for real, my advice is to avoid them altogether. I’ve never invested in one, and never plan to.”
The final category is the “legitimate” schemes that still yield high returns. Whether these are REALLY legitimate or not, is unknown. They typically have longevity – they have been around for a while. So the Mazu Business Pak of 10 schemes, or Empowerism rooted in a leads generation company but has a variant of an MLM matrix with an investment component at its core, and DxOne Currency Exchange (ostensibly acting to exchange e-currencies but when I last checked they were not actually doing so) have survived for some time. Most of them are secretive about how they truly make their high returns – notably DxOne – and they may all one day collapse. The returns can be as high as 10% per month.
The day-trading option is too complex to go into here – and too well known. However, it’s a real opportunity, but it carries all the risk of the stock markets. The HYIPs I personally would avoid. The others carry risks but are researchable as to their current legitimacy on the various forums on the web.
What it Takes to be Successful
Process
There isn’t really any process for investigating an HYIP-type scheme except applying common sense then following whatever rules the scheme has.
All the other schemes you simply have to follow their rules. Some like DxOne have detailed mechanics that you need to become aware of or you’ll not be able to get your money out.
Critical Success Factors
The only real CSFs are to investigate as far as you can, do not invest more than you can afford to lose and to get your initial stake out as soon as possible so you are playing with your winnings.
Concluding Remarks
Investment opportunities on the web are as tough as offline. Assume for safety that people are trying to separate you from your money and act accordingly. For those with ethical concerns, HYIP schemes are dependent on fleecing the naïve and the greedy. If this doesn’t bother you there is money to be made – but you have to be nimble!! On the website are Resources for some of the information suppliers and more reputable operations.
For an extraordinarily interesting site on HYPs go to http://www.hyip.org/. There isn't much they don't cover.
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