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Why
HYIP can be your best friend or worst enemy. |
Like any investment, high yield investment
programs can be your best friend and worst enemy, depending on how
you do it. The key is understanding your financial limits.
A sound investment policy is one that allows you the financial
wherewithal to invest, but doesn't end up strapping you for cash or,
worse, bankrupting you. By keeping careful track of how much you
invest, you can make sure that your investments don't overcome you.
There are all sorts of formulas to determine the limit of how much
you should invest, but it comes down to how much of your income is
left over when you have paid for bills. As long as you don't spend
more than, you should be okay.
A better way of looking at
it is to look at your income in terms of a business. Total up all of
your outgoing money, and then allow for incidentals (morning coffee,
gas for the car, even snacks and video rentals). Basically, try to
allow yourself $5-$20 per day ($150-$600 per month) for the small
things in life, while putting some away for a rainy day (usually
10%; it may not seem like much, but you need something in the bank,
and most people have a problem not spending their money). If you
need to, make sure that you have two accounts, putting almost all
your money in one account, and the rest in a savings account.
The remainder you can invest. When you invest, the best word of
advice you can get is to forget the money. Investing the money means
that you are taking a risk; there is a possibility, however slim,
that you won't see the money ever again, or that you may lose some
of your capital. This is acceptable risk. If you can't deal with it,
then you probably aren't cut out for investing.
The second
is that you shouldn't put all of your eggs in one basket. It may
sound trite, but if one investment goes south, and it's the only one
you've invested in, then you've lost all of your investments. When
you invest, some investments will go up when others go down; by
having multiple baskets you not only cancel out the downs while
maintaining a constant profit from your various investments. One
investment just doesn't do you as well as several.
Do that,
and your investments can be your best friends. On the other hand, if
you spend more than you can afford, an invest more than you can
afford to lose, you will end up losing money each month as you try
to shore up a sinking ship. If losing money is something you simply
can't do, then you will suffer a lot; letting it go is the best way
(if it comes back, then hug it, and then send it back out again). If
you only have one basket, then when its gone, its gone, and that
money won't do you any good.
The last bit of advice: Ride
the ups and down like a roller coaster and enjoy. It really is
better in the long run.
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