01 August 2008

Enceng Bin Munawwar

Compounding vs. Non-compounding

In this article I discuss two possible opportunities of high yield investment programs in the Internet and their advantages as well as disadvantages. I hope that the article helps readers to decide what program is more suitable for them. What high yield program is the best and prosperous is the most important issue of this article.

As mentioned already, there are two forms of high interest projects in the Internet: compounding and non-compounding. Investors use compounding for generating new interests from previous investments. In other words, it is the ability of current investment value to generate new earnings which can be reinvested. Moreover, investors have an opportunity to make a new investment using the paid out interests without their own money must be used for this project. For example, the process of only 10$ initial capital lasts a very long time until these $10 are again back (1% per day within 100 days) to open a further high yield investment program. However, if the investor invested his money in five such programs, he can get return on investment only within 20 days. Non-compounding programs are ideal for the people who are ready to invest serious money.

Investors have an opportunity to invest their money and the interests become the first investment (principal capital) automatically which is added daily, weekly or monthly. Thus a compound interest effect develops. A compound investment costs little work because investors check their accounts only in fixed time intervals and note the increased account balance. It is advisable to save money also with little initial investments. It is a great high yield investment opportunity for investors who do not have large initial capital for investment.

Certainly, it is not easy to understand without a good example. For example, you invested $1,000 into a particular HYIP that pays 30% monthly interest (in other words, 1% per day). The shares rise 30% during the first month. Your investment is now worth $1,300. In the second month, the shares appreciate another 30%. Therefore, your $1,300 grows to $1,690. In the third month, the shares rises 30%, your capital will be $2,197.

If you check the rate of growth monthly, the growth rate increases regularly, namely in the first month growth is $300, in the second month is $390, and in the third month is $507 etc. You understand now that the numbers can start to get very big as your previous earnings start to provide returns. In fact, $1,000 invested at 30% monthly for one year would grow to nearly $23,300.00 (and that is without adding any money to the investment).

Non-compounding is another prosperous investment opportunity in HYIP. It is programs which pay out daily, weekly or monthly. They are suitable for the persons who would like to have money for life regularly because it is possible to get return on investment on the indicated E-gold account (or another E-currency) daily and weekly as well as monthly.

We see that both programs can be very “fruitful” for a business involved in a real investment opportunity. Moreover, compounding and non-compounding are able to produce extremely good result. However, investors should be careful on how to use compounding and non-compounding in HYIPs because both investment opportunities have high risk and can fail any time.

There is no doubt that one of the greatest problems in HYIP is that it is impossible to predict the life span of a particular HYIP. Thus, it is important to take a mechanism to make your investment safe. One way of doing this and reduce enormous risk in high yield investment projects is to properly use different compounding options.

For this there are also investment programs which have the factors of compounding and non-compounding. It is possible to get return on investment in the Member Area and save some money on the account. These programs are very practical for those who would like to decide daily what to do.

Also the own investment strategy is simpler and more sure if investors can obtain the initial deposited capital faster so that they can invest in further HYIPs without high risk (in other words, without their own capital funds).

I can prove the advantages on the example. So you invested $1,000 into a particular HYIP that pays 30% monthly interest. As said above, with 100% compounding there is a great possibility that $1,000 invested at 30% monthly for one year would grow to nearly $23,300.00. But what would happen if the HYIP fails in 6 months? You lose all your hard earned money very quickly. For that reason, it is important to use compounding and non-compounding together in HYIPs.

It is always recommended to get your original spend back as fast as possible, in other words set the compounding option to 0% until you return back your initial investment, then after, you can compound your shares while withdrawing 50% of your profit by setting the compounding option to 50% . Why 50%, can you ask me? Certainly, this is not a strict rule; it is the recommendations based on some experienced HYIP investors. But you have to be careful with this.

The best advantage of such programs is that investors save their money on the account during the first month (compounding) and next month they get interests (non-compounding method). In this way investors get their invested capital back, besides investment yields grow more slowly further. If such a program fails once, investors will lose nothing and yields will paid out too.



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