Opinion that the program that pays out every day is scam on default is so widespread, that many investors accept it as an axiom, which cannot be argued. But as soon as it is widespread we cannot avoid paying attention to it and would like to tell the freshers what it means, at the same time providing experienced investors with new angle of vision on the problem that is extremely relevant at present.
Where did the notion that the program that pays out every day derive from? It derived from the fact that each of the persons ever facing investment (for instance, trading) could make sure that the investment is quite an unpredictable process, which allows getting or losing within one day the sums that cannot be involved into operations in other branches of industry. This happens every day. You lose and then you win. There is no other way round, unless we speak about fairy tales.
Thus, thus, the everyday payout of the interest from your deposit is absurd. How trader would decide to pay back your interest if he is to operate your money the next day, or possible lose it. Or, rather, lose it. In practice almost all profitable operations are made only after decrease of the product value, and to make this decrease one need an amount of money that under the circumstances of the shoulder, determined by the bargains, will provide the acceptable holding back without closing “stop” transaction.
In short, without going into peculiarities of various legal methods of getting profit, it is impossible to waste the funds received as income, because the next day it won’t be profitable. No matter what you operate – calls, shares or precious metals. The only exclusion is investment in business or real estate, but here we cannot speak about everyday income.
From the other side, we can make the following thesis: the interest that is paid every day is the reserve fund , which is used by the program for these purposes. The basic funds are operated that becomes the income and the loss, which reveal in business operations. Thus, if you are suggested 1.2% every day, it doesn’t mean that your money was involved into operations so soon. The matter is that the organization takes your money at these interests, and it doesn’t mean that the interests are paid from your money. This issue is often omitted.
At the end, such model of an “ideal program” (if it works honestly on one of the markets) looks like this: we take your money and pay out the interests from our money, and your money are operated by our trader which can provide for 37.2% of income per month. It is not a huge amount of money. It is real and possible. It is acceptable to get $3720 from $10000 per month. But what’s the matter? The matter is that nobody speaks about it. Nobody explains the possibility of such interaction with your money, and such usage of your money.
The lack of such theory is that in this case the program should possess a relatively huge reserve fund, which must be equal or greater that the sum of the money that is invested by the investors. In other words, if the sum of the investments in the program amounted $10 000 at the beginning of the month, and this sum is operated by the trader up to the end of the month, the reserve fund`s sum should be $3720 minimum.
Then this sum is to be multiplied by the term that the program needs to include money into the operations. If it takes the money and doesn’t get them back (principals included in payouts), this is the one thing, if it gets them back separately, then the sum of reserve fund should be multiplied by the number of the months of payouts
see what I mean?Even if we do not multiply by the number of month that may appear to be unfortunate for trader, the sum of the fund amounts $3720 taken from the deposit sum. If trader really makes out 37.2%, he just gives away the money, without receiving anything and without paying anything to his administrators. How many percents should he earn each month to receive income? 50%? Have you ever seen such traders? If any such trader exists, he would be richer that Bill Gates.
Let us leave alone joking. Let’s go on dreaming. Let’s count what would be if he makes out 50%. The sum of deposit is 10 000. 3720 should be given away by the end of the month. The sum of the reserve fund (that this HYIP already possesses to pay out everyday interests) is equal to $3720. Do not forget that $10 000 cannot be given away, as it is done in pyramid, because this is the sum that is operated by the trader. And the general sum of the income with profit of 50% is $ 5000. $3720 are paid back to investors, and the program remains with 1280. Did you have what it means?
Investor will receive $3720, HYIP will receive $1280 (trader, developers, support team and other staff). He will receive this profit, using 10 00 of investors’ investments, having 3720 of the reserve fund , and earning 50% profit per month. Isn’t it enough for you? Then count how much this trader and the program will earn, just operating only its reserve fund at the financial markets (3720). It’s correct – 1860
I wonder, if it is reasonable to borrow 10 000, pay the interests each day and make out less, then one may make out working for oneself? It’s absurd. And if the program pays out 5% every day? This is unreasonable. Does it mean dead end? Not at all.
Pyramid is one of the most unpleasantly sounding words for investor, but it fully reflects the essence of the matter. It always stands next to scam and pursues daily paying programs. But this is fraud only when someone doesn’t receive his money. And he cannot receive them both in programs that pay every day and those that pay every month. It is equal. And the risk rate is also equal.
All the more, one may think over the above-mentioned calculations and reject the notion of the reserve fund . This is destroyed at the beginning, what are the guarantees? And who speaks about the guarantees? The guarantees are least spoken about, and if you choose the program that pays out 1% per year, you may not escape loses in almost all cases, including those programs that suggest 10% per hour.
The matter is whether you accept the rules of the market game or not. Do you seek for a real program or for an income? The real program may be found at real addresses, meeting real people and working with trader, standing next to him. If you look for it, the answer of the question whether you should invest on the program that pays out monthly or daily won’t be helpful for you. You need your own real program that cannot be found at 99% of cases.
If you accept these regulations and you really understand the fragility of the situation, just ask yourself what is more convenient for you. What game you choose to play? To what extent you are going to trust administration? To what extent are you attentive and risky? To what extent you penetrate the details to make sure that the program essence is scam or try to cheat and receive your profit?
Consider all this and see – these programs are complex in performance. They went so far in their development, that fully moved away from the reality. My simple math calculations break the most part of the promises that fill in the catalogues. But does it make proposal less attractive? Does it delete all the profits that are received by the investors? Not at all. It points out that despite all absurdity, earning is possible here, and many investors earn without regarding if the program pays monthly or daily!
Peter.
Lella Prior