Compounding....When Should You Do It?

Is compounding a good idea? I am asked this question quite often by many investors. I have heard many people say that it is never a good idea to compound in hyips. I dont completely agree with that statement. I myself have reaped great benefits from compounding in HYIP's. So I cannot deny that it a great way to skyrocket your profits.

Compounding is when you take your daily or weekly earnings and add them back to your principal investment. Heres an example:

Lets say that your initial investment is $1000.00 usd and your daily interest is 1.5%, this means that your daily payout will be $15.00 a day. Now, if your program has a compound feature on it (some do and some dont), then you can set this account up where a portion or even all of the earnings will go back to the principle balance.

So if you are earning $15.00 dollars a day and you set your compounding to 100%, then your progression will look something like this:

day 1: $1000.00
day 2: $1015.00
day 3: $1030.22
day 4: $ 1045.67
day 5: $ 1061.36

day 30: $1539.98
day 60: $2407.11
day 90: $3762.51

If you end your compounding at this point to take daily payments, you are now making $56.43 a day, versus $15.00 a day. Big difference.

So as you can see instead of doing the $15.00 day after day, you can really blossom your account by being patient and taking the extra risk of compounding. Of course there are some drawbacks in doing so. As I mentioned, it is very risky to compound in HYIP's, because the longer you stay in a program, the higher risk you are taking in getting your money back.

Lots of people have suggested that you first get your principle out and then start your compounding. This way, your seed money will be safe and you can risk the rest of the profit at no personal loss to you. I highly recommend this technique for beginners who do not really know the pattern of HYIP's

Also, you can try another, more advanced technique that has worked really good for me. Sometimes when I run across a program that has gained much popularity in its early stages, I will compound for the first month or two and cash out for the remainder of the cycle. Its kind of like doing it opposite of the first plan, but it works. This technique is displayed in my example above where the $1000 investment started as a $15.00/day payout and grew to a $56.43/day payout in 3 short months. Not bad

I would never recommend compounding for the whole investment cycle as this is extremely risky and could result in a massive headache if the program collapses before you get a chance to cash out. One more thing to consider, if the programs cash flow is restricted, and you request a large amount at the maturity of your investment, you just may not get it.

In summary, I believe that compounding is a risk that should be weighed with all other risks. In other words. I will say go for it if you have taken other measures to minimize your risk. You may be in total profit and have nothing to lose by compounding. Everyones situation is different. Above all things, always have fun at what you are doing.

Take care
Victor

HYIP's: 3 Things To Watch for When Choosing an Investment Program

Hello to all. First of all, Happy New Year. This is my first post for 2010. I have been wanting to post here for a week or so, but I have been busy. Anyway, I am now back and ready to get back to business.

I wanted to write a quick article on things that you should watch for when choosing a HYIP investment program. We all know that HYIP's can be very very profitable, but we also know that HYIP's can be very costly, if you choose the wrong ones. I have been on both sides of the fence, so I can talk very freely about both. During my time in HYIP investing, I have lost thousands of dollars in a matter of minutes. It didnt feel good at the time, but I try to use every bad experience as a means of learning. When you think about it, thats the only constructive element that you can gain out of a bad experience.

I have now, as a result of applying what I know about HYIP's and balancing it with the elements that I dont know, have been able to set my investments up on auto-pilot where it generates hundreds of dollars daily. Here are a few things that I picked up along the way to help me out.

1. Test investments
Test investments are not always the best route to test a program.
When I say that, it doesnt mean that I never test invest a program. Sometimes I will bypass a test if the program has gained a parge amount of popularity in a short period of time. There are several programs that I currently have listed on my blog that I didnt test invest at all. I just jumped in feet first. My logic behind that is:
If I find a program thats very popular, why do I have to test them to see if they are paying?? How did they become so popular?? A test investment can sometimes stall precious time on a "real" investment opportunity.

2. Paid posters and paid monitors.
We all know that best sources for up to date payment info is in the forums.....sometimes. When you are looking in the forums for payment information on a particular program, please beware of "paid posters". A lot of programs will hire people for the sole purpose of placing positive votes about the program. First of all, if the program is really good, they wont have to hire people to lie about being paid. Most of the time they are very easy to identify. if you see people in the forums and they dont have a lot of posts or if all of their posts are on just one program; either positive or negative, then you watch that person very closely and dont trust them. They have an agenda. The same with monitors. Some of them are very unethical and they will post positve votes on a company just for the exposure or a few dollars. Be careful of them

3. "We are going private, better invest more money now!!"
How many times have we heard that?? Theres not much to be said about this one. Just know that if a HYIP program announces out of the blue that they are going private, that in itself isne bad. When they are using that phrase to try to entice you to invest now "while you still have the chance", then its time to cut and run.

Hopefully these three simple tips will help you to cut your losses while you are investing in HYIP's. Always remember, never invest more than what you can afford to lose and never get overcome by greed. HYIP investing can be fun and profitable, once you figure out what you are doing.

take care
Victor