The Startup Capital
Assuming we start off with US$500 to invest in.
Although for most HYIPs, we are allowed to enter investment with as little as US$10, but we would probably want to set aside of at least US$500 to provide diversification between different HYIP programs. It''s about the same if not lower than the amount we would normally spend to get most usual online MLM or autosurf type of program started, not forgetting to include "upgrade fees" and initial advertising cost. For time wise, the many hours of online posting and promoting you have to commit, on the other hand for passive HYIP investment, you do need to do anything except to check in everyday to withdraw.
Warning again, temptation strikes and greed ruins, please do not use money you need to have for rental or food. If you must start off with less, do so. There could always be a possibility that you could lose your whole stake and have to start over again. If you are persistent, disciplined enough and play the odds correctly, you will definitely win the game in the end.
Meaning of Compounding Effect and Rule of 72
What is the meaning of compound, a simple example is if a program pays 10% per day, if one would to invest, first day he/she will earn 1 dollar which plus interest will add up to be $11 dollars. End of second day interest will be based on principle of 11 dollars instead of 10 dollars, so interest generated for 2nd day is $1.10, the continue of this is called the compounding effect.
In financial term, there is a rule of 72, meaning to say to have a gauge of the period on any principal amount to double its value, we can simply use 72 divide by the compound interest rate, the answer will be the period of the growth. For example, for 1000 dollar to grow into 2000 dollars given a 3% interest every day - 72/3 equal to 24 days to double. Test it and you will be antonished.
Different Compound Interest Rate vs Period to Reach a Million
So now back to our topic, here is how long it would take to go from $500 to $1,000,000 at different rates of interest compounded monthly using online High Yield Investment Programs (HYIPs).
1-5% -- Forever! (Almost)
10% -- 6 years 8 months
15% -- 5 years 6 months
20% -- 3 years 6 months
30% -- 2 years 5 months
40% -- 1 year 11 months
50% -- 1 year 7 months
60% -- 1 year 5 months
70% -- 1 year 3 months
80% -- 1 year 1 month
90% -- 1 year
100% -- 11 months
110% -- 11 months
120% -- 10 months
130% -- 10 months 2 weeks
140% -- 9 months
150% -- 9 months
There are some interesting facts to learn from this chart.
Between 5% to 10% compound interest, there is a massive drop in time, there is another pretty big drop at 20% interest, a smaller but worthwhile drop at 30%, again at 40% and marginally at 50%, but from there each 10% more has a rather small effect.
From 80% to 150% notice that even though you have almost double the interest (added 70% to it) you only shave 4 months off the time (reduced the time it takes by about 30%)
Making a bar graph of the above (with 10%, 20%, 30% up to 100%) will show you what the best percentages are.
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The graph shows us very clearly that between 30% and 50% is the best range.
However 20% is a big advantage over 10% that''s for sure, and is the first really worthwhile interest.
Do I need to have a lot of money to start of with
OK, now let''s assume you join HYIPs that pays 40% interest per month (Compounded).
How long will it take you to get to 1 million?
.05c -- 4 years 3 months
.50c -- 3 years 8 months
$5 -- 3 years 1 months
$50 -- 2 years 6 months
$500 -- 1 year 11 months
$5000 -- 1 year 4 months
$50,000 -- 9 months
$500,000 -- 3 months
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Surprisingly enough, this shows that starting with lots more money really doesn''t speed it up all that much.
If you want to diversify, it is important to remember that you will be hard pressed to invest in more than one program with much less than about $150, although there are some good programs that have minimums in the range of $10 to $50.
Notice that US$500,000 is ten million times more than 5c in value, yet 5c only takes 17 times longer in compounding to reach the same goal!
This exercise has shown us some interesting results.
1. Even if you are starting with less money, it will ONLY take about 1 year longer to get to the 1 million dollar mark.
2. While high interest rates are tempting, and there are other good reasons for going after high interests such as closing the "risk window" as soon as possible, you don''t really need to go above 40%, and even 20% isn''t too bad. Much above 40% and it is extremely likely that the program is a scam or will get overextended at some time and fail . All it takes is a couple of bad trades, or an ugly rumor, for even a good program to get squeezed for liquidity.
With only $50 and 30% interest per month (compounded), you are a millionaire in 3 years and 2 months! That is not to imply that we would simply rely on any single program to get my million dollars. One primary rule is that no one can ever be 100% sure which program will last more than another week. It is all probabilities and luck. Do remember that and drill it into your head. It isn''t about being right every time. We don''t always pick winners. We don''t know anyone else in this business who does. You only need to learn to avoid the worst crooks and scams, and be right more often than you are wrong, and remember to spread the risk. Have a little faith. Not all your fellow men are crooks. It only takes a couple of legit, well-managed funds, to more than make up for a couple of losers. Do your due diligent and homework before investing, form a HYIP community to discuss with like-minded individual to discuss and share information. Hyipreview.info is setup to be the platform for all these to take place.
OK, now let''s look at the numbers. At $50,000 with 100% interest compounded every month, you are a millionaire in 5 months.
At $50 (1/1000th) with less than one third the interest (30%) compounded every month you are a millionaire in 3 years 2 months, only 7.6 times longer, yet much less principle (1/1000th) and much less risk!
And once you get to 1 million, 7% a month is enough to spend 1 million a year and still have your money well outpace inflation.
So if someone wanted to get to 1 million dollars (who doesn''t) and has the patience to wait a few years, also wants to be pretty sure they will get there rather than losing it, and doesn''t want to risk too much, we think about $500 at 20% average per month which will be only 3 years 6 months to become a millionaire.
A good, and probably the best, argument as to why you should go for high yields, is to close the "risk window" fast. This can be important at the start so you can use the money to diversify. If you will want more security later and you will have a broader base of more secure lower paying programs to provide it. You can go on vacation without worrying that your "Very High Yield Risky Fund" has collapsed and taken a large percentage of your "float" with it.
Of course all the above is based on the assumption that something that gives a 60% interest per month is more than 3 times riskier than 20%. (and will have less than 1/3rd the life span). Not always true, but a rule of thumb. You have got to remember that none of these is like the "invest and forget about it" rules of conventional 3% a year federally insured bank accounts. It is like being an independent adult. You can lose. No one is going to take that loss for you. But let me tell you this, the rewards are much greater also, and they are ALL yours when you earn them by your own self-discipline, persistence and experience.
Thinking and Speaking about Money and it will come to you
In the book Rich Dad, Poor Dad, Kiyosaki compares his "two fathers": his biological father who was a teacher and his mentor who was a businessman. The teacher was his "poor dad" and the businessman was his "rich dad." His poor dad said: "The love of money is the root of all evil." His rich dad said: "The lack of money is the root of all evil."
The quote below from Rich Dad, Poor Dad is extremely important. It powerfully illustrates what I call "Slavespeak" -- the phenomenon of certain words having hypnotic, stupefying, and debilitating effects on their users.
"Because I had two influential fathers, I learned from both of them. I had to think about each dad''s advice, and in doing so, I gained valuable insight into the power and effect of one''s thoughts on one''s life. For example, one dad had a habit of saying, "I can''t afford it." The other dad forbade those words to be used. He insisted I say, "How can I afford it?" One is a statement, and the other is a question. One lets you off the hook, the other forces you to think. My soon-to-be-rich dad would explain that by automatically saying the words "I can''t afford it," your brain stops working. By asking the question "How can I afford it?" your brain is put to work. He did not mean buy everything you wanted. He was fanatical about exercising your mind, the most powerful computer in the world. "My brain gets stronger every day because I exercise it. The stronger it getsPsychology Articles, the more money I can make." He believed that automatically saying "I can''t afford it" was a sign of mental laziness."
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