Most people ask us questions about compounding. When is it the best time to stop compounding and when should you pull out of an investment?
This is a tough answer to give. It all is dependent upon the program that is invested in as well as the rate of return. Usually we recommend the following for the below 3 categories:
Type #1 HYIP - Low stable payers (Pays between 2-7% per week, 8-28% per month). This sort of plan is probably one of the safer kinds around. More likely than types 2 and 3, these are actually investing funds in Stocks, Forex, or other stable programs.
We suggest that you invest a sum of money and then compound half of your returns until you get back your principle.
Once you've recovered your principle continuously compound/reinvest, but this time at a rate of 60-70% of your returns. If the plan sticks around, you should be able to profit quite a bit. Once you get a 250% return we recommend that you stop compounding and look for another plan.
Type #2 HYIP - Mid-range paying, moderately secure program (Pays 8-16% per week, 32-64% per month). This kind of program is probably the most popular amongst investors.
They feel secure since the payouts are not too high, but additionally really feel like they are going to swiftly make a return on their investments. Many of these programs actually invest in other programs, Forex, stocks, and so on., however many are just Ponzi's.
In the case of the Type 2 HYIP's, we recommend that you compound/reinvest only 20% of your returns until you get your principle back, then when you get your principle back you basically stop reinvesting and just let the program run its course.
Type #3 HYIP - High paying, relatively high risk programs (Pays over 17% per week and over 65% per month). These are generally the programs that are daily payers which normally end within 3 months.
If you dare to invest your money in such programs, we recommend that you only invest one time and don't reinvest or compound your earnings.
The lifespans of Type 3 programs are normally extremely brief and those who invest right when the program opens are the ones who will walk away pleased.
All in all, these are just some of our opinions. Performance may vary. Stick to these recommendations and investigate HYIP's just before investing in them.
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