Hi, guys! Today I would like to discuss a very important part of the online HYIP industry which many investors, particularly newer ones, are not that familiar with. It’s something which can somehow be misleading and put you in the very dangerous situation of believing that an online HYIP has a real source of income. I am talking about “piggybacking”, an issue that is often talked about among experienced players but rarely discussed by newbies.
So before continuing the topic let’s try to describe “piggybacking” in terms of the HYIP industry. A dictionary definition would be to take a ride on somebody else’s back. In other words for someone else to do the work while you get carried for free. In HYIP terms it’s the practice of accepting money from others and then redeposit it to one or more other HYIPs. So when you think you invest in one program you may actually be paying for somebody else’s investment in a completely different program. And you may or may not be informed of this. Confused? Let’s take a simple example that everyone can understand.
There's a program called “X” for instance. It offers you 1% for 300 days and is paying perfectly well for many months. You actually start to believe that Program X might just be a real business opportunity because it continues for such a long time. You ask yourself if they have a real source of income, or if the admin is such an honest businessman because he’s been paying you for so long. Well, the secret of such perfect performance is simple. The admin of “X” heard about two other great programs: “Y” that pays 2% for 200 days and “Z” that pays 3% for 100 days. So the clever admin of “X” decides to simply reinvest your money in those two programs. He continues to pay you the smaller percentage of 1% as usual while keeping the bigger profits for himself. Now of course Admin X would prefer if you remain unaware of this. After all, if you found out then common sense would dictate that you leave Program X and invest directly yourself to Y and Z, right? I mean that’s where your money was going all the time anyway, so why not you make the profit generated by your own money instead of Admin X? So most likely Admin X will continue with the facade that he is a regular businessman with regular business investments. ForEx trading for example is a popular one, but there are many others. Some of which are quite colorful, even amusing, but unlikely to be true.
Of course, “X” program will be stay online and pay happily ever after. But only to the point when programs “Y” and “Z” collapse. Well, it could still go on for some time if only one collapses but eventually once the outgoing payments begin to exceed the incoming funds, the collapse of program “X” is imminent.
I guess now when we that explained what piggybacking on online HYIPs is, it becomes clear why the collapse of the really big industry giants affected a whole lot of smaller HYIPs, the admins of which were totally dependent on the profits paid by the bigger programs. That's how the so-called domino effect was created when not only the biggest programs but also a bunch of smaller piggybacking ones collapsed one after another thus creating a slump in the entire industry. This in turn leads to a further wave of losses to investors otherwise obediently following one of the most important industry rules – diversification.
But what is the purpose of diversification if we know that many smaller HYIPs reinvest your money anyway, often back into programs in which you yourself are already a member(!) and will collapse “like a domino” when the bigger one inevitably folds? That is why it’s imperative in my opinion for a better chance at success and be in profit you must define the leaders of current HYIP market and to keep most of your initial investment in them. And keep it there yourself! Not through some second hand (and second rate) piggybacking ponzi that simply collects the profits earned from your hard earned money, merely to throw you a few crumbs from the table when they're done. It’s essential if you want to succeed in the long term, so keep studying the industry and form your own opinion about the top programs that you consider the best and spread your own investment between them. What is the reason for handing your money over to someone else to do it for you when they reinvest in the bigger ones anyway, but keep the money that you should have earned?
This is how the things worked in the industry for quite a long time when the biggest programs paid thousands of dollars to both investors and piggybacking admins which made everyone happy. The problem now is that after such a long recession in the industry the new leaders are still to be established. Good programs are still out there. They always have been. They have just gotten a bit harder to find. So without any obvious leaders the small HYIPs still open every day but just can’t seem to make it last for more than a couple of cycles due to inability to reinvest into some more established industry leaders.
In my opinion, we will all see the revival of the industry once three or four leaders establish themselves which will inevitably lead to another procession of piggybacking admins following suit. As per usual you get the scraps while they collect the bigger prize, helping themselves in turn survive the traditional seasonal industry slow downs. The so-called “Black December” for instance which happens close to Christmas, or the summer holidays, neither of which are usually all that fruitful for investors. So until the industry sees such clearly defined leaders it remains hard to maintain the long term stability of smaller HYI programs either.
Piggybacking has been and will always be a part of HYIP industry. But remember that you can always make the analysis by yourself and put your money into a few leading HYIPs by diversifying it properly instead of entrusting it to some piggybacking experts that will promise you the sun, moon, and stars but only pocket the money that you should have earned yourself. How to do it yourself? By constantly educating yourself and only treating all HYIPs like the ponzies they are.
Again do not be fooled by any ForEx, stock market, or whatever piggybacking stories spread by somebody who discovered a magic formula for eternal profits and wants to share it with you. Ask yourself why they are doing it and if there are some personal motives involved beyond his desire to help you. And if he knows the secret to making money and offers you to double yours in a few months ask yourself why he needs your money to do it. Because if you are able to double your money within a few months you would be a millionaire yourself in no time with only a minimal investment.
The answer is simple – to invest his own money in HYIPs is a risk he’s not willing to take. But if it’s your money he’s spending? Well, that’s a different story. He will gladly reinvest that for you. That is why it’s much easier for him to say – I’m going to deposit your money in selected HYIPs, piggyback for you, trust me, I’m an expert in this field, etc, etc, etc. The end result is this – you pay, and he profits. And in the unlikely event that you do ever profit remember that for every $10 you collect your piggybacker collects $40. Now, whose pocket would you rather that money be in? Well, I guess if you’re a professional you should invest and multiply your own money first before proclaiming yourself and expert and an “I’m always right” type of person. We all are not ideal people of course but with due experience I’m sure that MNO readers will be able to pick out the real gems and promising leaders in the HYIP world straight away and draw the necessary conclusions. Conclusions that will help you develop your own unique strategy and apply them to your personal needs.
That’s it for tonight but there will be plenty more where that came from. Please keep offering your own ideas for future articles which will hopefully help you understand better how this industry really works and avoid the more obvious (and hopefully less obvious) scams.