The Best HYIP GUIDE: Referral Programs

Another element prevalent to many HYIP's is that of referral programs. It means that you earn a commission based on the number of participants/investors that you refer, and/or the amount of investment that they actually place into the HYIP. Some other referral programs only pay a fixed fee, usually between $5 and $25 per person referred. Another thing to remember about referral programs is that you will tend to recruit family and friends, so if the program shuts down for whatever reason and they lose all or part of their investment, you are not going to be a very popular person. Your actions may also have been illegal as you received compensation for the referrals you made, resulting in others loosingmoney. Therefore, it is even possible that you could face a criminal charge in your home country if the matter were pursued. So it is our experience that the majority of HYIP failures or outright frauds are the small HYIP's that also offer a generous referral program.

For those investors who do not want to invest their own money, or do not have the resources to do so, they can offer the program to others for a referral fee, thus they can still make money, whilst not risking any of their own cash. It is very easy for them to lie about their participation in the program, when they do not know you. That is why the swindlers like to use referral programs, because they need to get as many small investors as possible into their program as quickly as possible.

The reason they need to attract individuals quickly into the program is that they do not want to make numerous payouts to investors before they have accumulated enough funds prior to closing down the program. This is essentially a way of network marketing the program at very little cost, a lot less expensive in fact than making legitimate payouts to investors over a period of time.

Most ponzi or pyramid schemes will operate in this manner and you may even find that they will make some payouts before closing down the program. In most cases, these payouts will be made at the expense of other investors, and not from legitimate profits. You should also keep in your mind that contrary to popular belief; ponzi or pyramid schemes can operate for some time before shutting down, due to the self-perpetuating nature of the scheme. Memberships always tend to accelerate early on and only seem to slow down once the scheme becomes more established, so the con artists have a continuing source of funds from which to make payouts, giving the illusion of legitimacy.

Another reason that referral programs are a bad sign for the HYIP investor is that they are a logistic nightmare. It is hard enough for a HYIP program administrator to process a large number of regular payouts to investors, without the added headache of having to calculate and payout a vast number of referral fees in varying amounts. That is why a professional HYIP website needs to incorporate a backend database in order to cope with all the data, and produce the required information. Remember that most HYIP's have membership figures in the thousands. There have been many HYIP's, some of which probably started life as legitimate high yield programs that crashed and burned due to inadequate design and database implementation, as well as reliability. Once a system fails, it will cause other problems for the program administrators, usually resulting in failure to pay out returns to investors on a regular basis.

There must be certain rules that you will have to follow if you are not going to be caught out by the swindlers. We would rather miss a good program than loose our money in a bad one, and after all there are sound programs out there to choose from.

You should always take your time assessing the attributes of any particular program, and try to weigh up the pros and cons of each, until you feel comfortable. You will find sections in this e-book that deal specifically with the due diligence aspect of assessing a program, as well as general selection criteria.