High-Yield Investment Programs Is Frauds
Many people have heard the term “High Yield Investment,” but are unsure exactly what this term means. A high-yield investment plan is an investment scheme that promises an excessively high return on the initial investment by promising new investors with newly-minted money invested in the scheme. In order to distinguish between genuine high yield investment programs and fraudulent high-yield investment programs, common sense should dictate that any investment plan which promises returns of more than 25% per year must be suspect. If it sounds too good to be true – it probably is.
There are many different ways that high-yield investment programs can be structured and managed to inflate the initial value and then disburse funds to new investors, leaving original investors frustrated and, in many cases, even worse off. As an example, financial instruments used in these schemes may be futures contracts, stocks, bonds, certificates of deposit, or even real estate property. By leveraging a borrower’s potential growth potential via collateral, high-yield investment programs make it possible for investors to obtain large returns without having to reinvest their profits into additional assets. Unfortunately, most new investors learn this hard lesson the hard way. In order to avoid being taken advantage of by high-yield investment programs, new investors need to be well informed about these scams.
When looking for companies that offer high-yield investment programs, it is essential to research the company thoroughly and know the exact plan or proposal being offered to be sure you are not being scammed. For instance, it is common for high-yield investment programs to provide “graphics” of past returns to illustrate the future earning potential, but these graphics can also be telling. Some high-yield investment programs do not tell potential borrowers exactly what they are getting into. Instead, they focus on the “average” or “blue-chip” investment opportunities that are available in the market, enticing investors with promises of high returns that cannot be sustained over time. A wise investor, when evaluating a company’s offers, should look beyond the graphic, asking if the business provides information on the product, plan of implementation, risk factors associated with the business, and whether the business is actually providing any product or service that will be of value to investors.
Another example of a high-yield investment programs scam is often frauds associated with unlicensed individuals or companies selling investment opportunities. Unlicensed brokers are often individuals who do not have appropriate licensing or certification to offer investment advice. Oftentimes, unlicensed brokers lure potential investors with ridiculously high rates of return, making it very difficult for new investors to obtain a foothold in the stock market before the business falls apart. As with high-yield investment programs, there are some unscrupulous individuals involved in this particular type of scam, but with proper research, new investors can reduce the odds of falling victim to these scams.
Another high-yield investment program scam involves high-pressure sales techniques that usually rely on exaggerated statistics to induce consumers to purchase products or services at outrageous prices. Some scammers will offer exaggerated monthly or annual returns in order to obtain the most interest from consumers, sometimes deceiving them into thinking that immediate and substantial returns are available through short-term investments. These scammers will oftentimes disguise their promotions as being part of a long-term investment plan that actually exists only for the purpose of extracting more money from consumers.
These examples of high-yield investment programs are just two of the more common schemes that are commonly run by unlicensed individuals or companies. Unfortunately, these scams usually do little more than taking advantage of people who are either desperate for additional income or who are simply in need of a temporary boost in funds. However, despite their many defects, these schemes are still quite lucrative for their operators. While it may be difficult to avoid being the victim of a scam, it is possible to identify the different kinds of scams and avoid being taken advantage of. For this reason, it is strongly recommended that any person interested in securing high-yield investment programs should familiarize themselves with various techniques used to increase funds quickly, safely, and easily.