Most people ask us questions about compounding. When is it the right 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 plan that's invested in and the rate of return. Usually we suggest the following for the below 3 categories:
Type #1 HYIP - Low stable payers (Pays between 2-7% per week, 8-28% per month). This type of plan is probably one of the safer sorts around. More likely than types 2 and 3, these are basically investing funds in Stocks, Forex, as well as other stable programs.
We recommend that you simply invest a sum of money and then compound half of your returns until you get back your principle.
Once you have recovered your principle continuously compound/reinvest, but this time at a rate of 60-70% of your returns. If the plan sticks around, you ought to be able to profit quite a bit. When you receive a 250% return we suggest that you stop compounding and look for another program.
Type #2 HYIP - Mid-range paying, moderately secure program (Pays 8-16% per week, 32-64% per month). This sort of plan is probably the most common among investors.
They really feel secure since the payouts are not too high, but also really feel like they are going to easily make a return on their investments. A lot of of these programs essentially invest in other programs, Forex, stocks, etc., however many are simply 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 once 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% each week and over 65% per month). These are often the programs that are daily payers which generally end within 3 months.
If you dare to invest your funds in such programs, we recommend that you only invest one time and do not reinvest or compound your earnings.
The lifespans of Type 3 programs are normally extremely brief and those that invest right when the plan opens are the ones who will walk away happy.
All in all, these are just a few of our opinions. Performance may vary. Stick to these guidelines and investigate HYIP's just before investing in them.
If you're reading this mainly because you are in dire need of raising business capital for your own business, going public might be the much better option. The second very best option would be a corporate merger.
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