Financial Obscenity.

When it comes to obscenity, I’m not talking about anything that has to do with nudity, male-female relations, or the like.  Just as these subjects can become obscene and offensive if not tempered by good taste, so, too, can financial investment opportunities become obscene if they are “off the chart” and out of touch with reality.  Just as you might gasp and turn your head the other way when you encounter human obscenity, you might also gasp when you encounter financial obscenity.

Does this make sense yet?  Maybe, maybe not…

Suppose that one day you happen to be wearing your finest suit and tie and decide to have a cup of coffee at the neighborhood café. A man that you’ve never seen before sits down next to you and tells you that he is a very experienced investor and, in fact, is a member of a TEAM of such investors that regularly make huge profits in their many business ventures.  He politely invites you to invest with them telling you that an investment of only $55,000 will get you a return of 10% per day — $5,500 per day — for the next 40 days.  That would be an amazing 400% profit!  I would certainly gasp at that.  Then, to make the offer even more tempting, suppose that he went on to say that, if you would allow him to reinvest your earnings with him during the 40 days, he would give you a one shot payment of nearly two and a half million dollars at the end the investment period.  Well, if I heard that sort of promise, I would surely gasp and run away from the guy as fast as I could.  I would be POSITIVE that he would take my money and run — maybe faster than I would have run away from him in the first place.  Well, this is one example of financial obscenity.  But, do you know that there is an HYIP online right now that makes this very offer?

Suppose someone tells you that, if you give him $1,000 because he needs it for a “sure-thing” money-making idea, he will give you $500 every day for the next 100 days in return.  But, he doesn’t have the money right now and he promises to give it all to you as a lump sum at the end of the 100 days.  Well, this is almost the same story as in the previous paragraph but without the high “down payment.”  Do you think he will ever pay you the $50,000 he has promised you?  No way!  There is NO money-making scheme — short of robbing a bank — that can provide such wild returns.  Well, do you know that there is an HYIP online right now that makes this promise?  This is another example of financial obscenity.

I call investment plans like the first case “fishing expeditions.”  The Admin is simply hoping to catch one “big fish,” an unsuspecting rich investor who believes everything he sees online.  Then, after the fish is hooked, you can be sure the program will close — maybe very quickly.

Similarly, in the second case, it is certain that the HYIP will have to close when it comes time to pay the absurd returns it promised.  However, in this case, since a huge investment wasn’t made, the Admin might wait till the payment date is near before closing.  Perhaps he can catch other fish — a whole “school of fish” — in his net before he closes the program.

These types of investment plans are OBSCENE.  They leave us gasping because we know they are impossible.  And they leave us wondering how a legitimate program could offer them.  So, the investor can come to no other conclusion than that an HYIP offering such investment plans is nonsense and that nothing written in its website can be trusted.  Even if such an HYIP offers other investment plans that are reasonable, the fact that it offers one or more that are obscene implies that the entire program is obscene and should not be trusted.  You wouldn’t buy your groceries from a drug dealer, right?

Let’s Stop the Obscenity!

Everyone knows that the HYIP business is a game and that 95% of all HYIPs will close in less than a year — often in much less than a year.  The game is to try to guesstimate how long a program will be around before this happens.  And, of course, some investors cling to the hope that an HYIP will come along that is the real thing — a legitimate company that is self-sustaining and that can afford to pay the returns it has promised.  But, no one faults an HYIP for closing its doors after being online for five of six months because that’s part of the game; it doesn’t violate any of the rules.

However, I will argue that it’s against the rules for an HYIP to promise OBSCENE returns.  The normal returns of a few percent per day that go along with the typical HYIP are high enough.  You might say that they are like a woman walking down the beach in a bikini bathing suit; they are provocative.  However, full nudity in an inappropriate environment is obscene — just like the promise of impossible financial returns is obscene.  So, what are the rules?  Well, they aren’t in writing and they never will be.  However, here I’ll suggest some guidelines that will address the two types of obscenity discussed in this article.  You can probably guess what they are…

  • An HYIP should NOT promise returns that are “off the chart” and are obviously impossible to deliver.
  • An HYIP should NOT engage in “fishing expeditions” for rich unwary investors.  Stop these high yield plans with excessively high minimum investments that fish for wealthy unwary investors.

The Admin of an HYIP that obeys these rules will have the respect of investors as they will know he isn’t trying to trick them into investing with the company.  Yes, he might be playing the HYIP game.  But, investors are OK with this and hope that the Admin would actually like to see many of his investors come out ahead before he decides to pull the plug.

You might well ask what type of investment plans a “good” HYIP should offer.  Just a week or so ago a very promising program called FexFund closed its doors.  This was a program that many investors thought was the real thing and that even gave a plausible reason for its closing (See News Commentary #137 here).  Of course, we will never know whether or not this was true.  Whatever the case, FexFund offered a number of investment plans that offered reasonable returns, had reasonable minimum investments, and had reasonable length investment terms.  It is no wonder that the company appeared to be very popular until its untimely closure.  Following is a summary of the information on the FexFund investment plans as it appeared in our review of the program (that you can read here).

Starter — 109% after 7 days
Deposit included
At the end
Accrual included
At the end
Total Return
109% (9% Net)
USD Amount
$ 10.00 – $ 500.00

Medium — 6% daily for 20 days
Deposit included
Daily
Accrual included
Daily
Total Return
120% (20% Net)
USD Amount
$ 25.00 – $ 5,000.00

Investor — 5% daily for 30 days
Deposit included
Daily
Accrual included
Daily
Total Return
150% (50% Net)
USD Amount
$ 50.00 – $ 50,000.00

This article creates a problem for us at Emily News.  I am sure that investors would like to know if we feel that an investment plan is obscene.  However, I am also sure that the Admin of an HYIP won’t appreciate having this label applied to one or more of his investment plans.  We would like to serve BOTH the investor and the Admin.  How can we handle this?  To be honest, I’m not sure.  In the past, when we encountered an investment plan that offered excessive returns while reviewing a program, we pointed this out — both to warn the investor and also in hopes that the Admin would alter the plan.  Perhaps we will continue to handle this situation in the same way rather than attach the word “obscene” to an investment plan or, worse yet, to the program offering the plan.

We hope that this article might accomplish two things:

  • If there are investors out there that might be tricked by these types of investment plans, we hope that this article will serve as a warning to steer clear of them.
  • We further hope that Admins will seriously consider adopting the suggestions we offer relative to eliminating the excessive type of investment plans described in this article.

A few readers might be wondering about the two “obscene” investment plans I described at the beginning of this article.  I’m sorry but I don’t want to mention names.  However, with a little bit of detective work, you can easily find out which HYIPs offer them…

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