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HOW TO MAKE MONEY IN HYIPs

1 History of HYIPs ..................................................................... pg. 1

2 What Exactly is HYIP? ............................................................ pg. 3

3 The Way they Make Money ..................................................... pg. 3

4 The Failing Point .................................................................... pg. 5

5 The Different Types of People in HYIP ................................... pg. 6

6 HYIP Popularity .................................................................... pg. 8

7 HYIP Risks ............................................................................. pg. 9

8 Choosing An HYIP .................................................................. pg. 9

9 Due Diligence ......................................................................... pg 10

10 Investment Strategy ............................................................ pg 13

11 E-currencies ......................................................................... pg 14

12 Resources ............................................................................ pg 16

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HYIP or High Yield Investment Programs are a very interesting concept. Over the
years it has slowly evolved into a very different industry.

HISTORY OF HYIPS

The concept of High Yield Investments began when capitalism was in its ‘infancy’
state. It was a great way to pool in capital, and invest in an idea that would prove to
be either a success or a failure. In the early 1900s, when someone required some
capital to start a business idea, they would first approach family members. Hoping
that in return, when their business idea does prosper, they would have a share in
the wealth. One of the very first records of such practice was Warren Buffet. When
he had the idea to start investing he established a partnership in 1956. He then
proceeded to pool together $105,000 from seven limited partners consisting of
Buffett's family and friends. Later he set out additional partnerships which were
later consolidated as Buffett Partnership Limited. Between 1956 and 1969 his
investments made in excess of 30% compounded annually, when the market then
was about 7% to 11%. He achieved this by following the strict investing principles
thought by his mentor Benjamin Graham.

Now another person also made a name for himself, while not as brilliant as Warren
Buffett, in a much more notorious sense. His name is Charles Ponzi.

Charles Ponzi had the idea of buying US stamps cheap from outside the country and
selling it locally at market price. His greed for money enticed him to pool in money
from family and friends to venture further into buying larger amounts. When word
got out of his so called ‘investment’ a lot of people started to jump at the idea. Ponzi
proposed to give a high return after 3 months should they choose to invest in his
‘business’. To cut the story short, when his business could not generate the rate of
return to the amount of investment coming into his business, and could not keeping
up with his commitment to his older investors, he used the money generated from
new investors receipts to pay off his older investors. And when there was not more
new investors, and the money ran dry, his business began to collapse. You can
actually read the history of Charles Ponzi and how the word Ponzi scheme came
about. (http://home.nycap.rr.com/useless/ponzi/)

When the internet came into being, HYIP too began to build its name. While there is
no clear record as to when the word HYIP or High Yield Investment Program was
first coined, it is believed to have started sometime early in the year 2000. Records
show that a popular HYIP forum was started in 2002 thus the name HYIP might
have caught up its popularity thereafter.

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What Exactly is HYIP?

HYIP is basically a program where the aim is to accumulate money or capital from
the masses for a venture or an idea. And in return, the program will promise these
‘investors’ a certain or fix return on their money deposited with the program.

Most if not all HYIP that are transacted over the internet are not regulated and I
doubt that it will ever be. The interesting part is that it seems that the HYIP
community or HYIP investors themselves are indirectly regulating this industry.

While they can not enforce this industry, the community works together to inform
and be informed on which programs are good and which are not. If the program is
not living up to it promises to members, words gets out to the mass and the
program might suffer.

LRHyip offers to help regulate these programs that are currently on the internet
informing the masses which programs are paying and which are not paying or how
well is the program performs with certain indications posted on the monitoring sites.

HYIP has been deemed, branded and said to be a scams, ponzi and pyramid
schemes. But yet, HYIP still continue to draw in a lot of new investors while
retaining some of the veteran investors. And that is what makes it an interesting
industry.

The Way they Make Money

As stated, HYIP exist to accumulate capital from the masses to venture in a


business idea. Most of the time, if you take out the Ponzi factor, these programs
CLAIM that they are making money from the following:

· Forex trading
· Stock ,Index and Comodities trading
· Internet Ventures
· Sports Betting
· Betting Arbitrage

So the real question remains; is it possible to make these kinds of returns? Again,
taking the Ponzi factor away, it seems to be possible.

Let’s take forex trading as an example because this is what the majority of
programs claim to be making money from. If you do a search on Forex trading
strategy or system, you will come across loads of sites that sell systems and trading
strategies that claim that they can make x amount of money a month using their

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strategy.
If that was to be true, then by following the system would it make sense that the
user of the system will make money? In the forex or financial institution there is
something call margin financing. Margin financing offers the investors a way to use
a small amount of money to control a larger amount of money in the market.

Example: In Forex investing, with a USD 1,000 margin deposit, an investor can
control as much as USD 100,000 worth of foreign currency.

So how do they make money from this so call margin financing? Let’s assume an
investor purchases EUR 100,000 at the EUR/USD exchange rate of 1.18. Meaning he
is controlling USD 118,000 with only USD 1,000. Let’s also say that after a certain
amount of time the exchange rate between EUR/USD moves up to 1.2500. If the
investor sells his/her holding it means that he should get back USD125,000. Thus,
the difference of USD 7,000 will be pocketed by the investor. That is almost a
600% return!

So now let’s take a step further, if this investors were to have say USD100,000
margin deposits the investors could actually control a whooping USD10,000,000
worth of foreign currency!!!

So how is this investor going to come up with USD100,000?

Yes, you guessed it… by way of OPM or Other People’s Money.

If the program owners can seek other investors to pool in their money so that this
owner can get a higher margin he or she could actually control more equity and the
USD7,000 profit from the above example could actually be USD70,000 or
USD700,000 depending on the pooled amount.

So what do you think each member should receive? Say 1 percent daily? This idea
is great isn’t it?

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The Failing Point

So let’s assume that these programs are legitimate and that they are actually out
there trading with the pooled funds, then why would they fail?
One way is that the tactic or strategy employed by the programs admin isn’t geared
to handle the large amount of money that is now at his disposal and thus mistakes
are made that could damage or even destroy the program.

Sure it is a great way to make money for oneself but the strategies and systems
that are available were not written or developed to create a program that would
handle huge amounts of money.

Well, I don’t think the system owner originally planned that when he created the
system or strategy.

So when an idea gets too big or rather when the money put into a program gets too
big it will sure get out of hand. Like Charles Ponzi, they will have to use new
member’s money to payoff the old members. Another term that is used in the
accounting world is ‘Managing Cash flow’ that is how programs collapse.

Well, your guess is as good as mine but sentiments in this industry are saying that
90% of all HYIP are scams, whether these programs claim to be making money
from trading Forex, betting systems, business ventures or the like.

Humans are simple creatures. When they lose money, they will start to scream
shout and complain labeling anything that made them lose their money as scam,
Ponzi, pyramid schemes and any other foul names that one can think of even if my
topic on The Failing Point might be or could be valid.
Once one loses money in HYIP, people naturally cry foul and begin to label HYIP as
scam. I think that here it is important to mention that just like anything in life
anything with high rewards has an element of risk associated with it.

Firstly HYIP is done over the internet. Being anonymous is what the internet
provides. It’s fast and relatively cheap to set up a site and start to lure ignorant
investors into parting their money.

Another reason why HYIP has been branded as a scam is because it is very difficult
to verify where a program is from or to verify the claims of what the program is
acquiring or deriving its revenue from. If we can not verify that it is legitimate, we
would assume the obvious that it is a scam.
HYIP programs are thought of to be guilty until proven innocent or rather until they
can show proof that they are paying their members.

Another reason for HYIP’s to be labeled a scam is the unusually short life span that
many of them have. Some programs collapse within a week or two of opening.

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The Different Types of People in HYIP

There are a few people that I have identified in HYIP.

· The Program Owner


· The Investor
· The Regulator
· The Bystander

The Program Owner


This is obvious, they are the ones who create, plan and offer the program to the
masses.

The Investor
They are also call players or members of a program. They are the one forking out
the money to the program owners.

The Regulator
These are people who own forums and monitoring sites. As I have said before, it is
these people who help regulate the industry while they can not enforce laws, their
influences does carry some weight with the investors.
LRHyip is a HYIP industry regulator

The Bystander
Now these people are the “saviors of the ignorant.” They do not invest or play in
any programs whatsoever. It is either they were burnt before and now here to warn
others or they are just merely skeptics trying to infuse logic to the mass about
HYIP. These peoples sole aim is to one day close down HYIP for good. Many times
you will see these types appear right at the end of a program when some are
screaming scam. This way they can gain others for their cause at the best time
possible. Truthfully though, with many of them, it seems that they are only feeding
their own egos by trying to somehow prove themselves righteous over the rest and
claiming that they knew it was a scam all along.

I have listed the above in order, the top being the ones that posses the most
money. But then again, that is just an assumption as there are no statistics to
support this claim. Only what I would assume to be logical.

It is also important to mention though that the cost to run a good program is not
cheap and so over time the program owner will also be the one spending the most
money.

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One might think that this cost is minimal but if you research the amounts needed in
building and maintaining a site you will see that it isn’t cheap. That is why one of
the things advised by the community is if the sites are designed properly, there is a
possibility that the program will last longer. This translates to the program owner
putting effort, time and money to make an impressive website and not something
that was just done “over night”.

The Players are both making and losing money. Whether which part weights
heavier, there is not statistical record on that. In my opinion I believe that they are
making money more than losing. While no Players have actually declared that they
are making loads of money from HYIP, they do post in the community forum if they
made or lose money in a program. It is important to note that the ones that have
the greatest chance of earning successfully are the ones that plan and research.
They are members of almost all forums and are active members of the community.
They research the admin and are knowledgeable of the red flags to look out for.

As for the Bystanders, well that is also very difficult to say if they are making money
or not. But I would presume that they are not, and are only there to make people
who are in this industry think that they are supporting a scheming industry that
takes away their money. In some sense many of them seem to be repaying the
admins that have scammed them in the past by screaming scam as soon as a
program falls.

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HYIP POPULARITY

If the above holds true then the question must be asked why 100% of hyips aren’t
commonly considered to be scams.

This is because humans are a hopeful bunch. They are still hopeful that there is a
chance where 10% or even 0.01% amongst the HYIPs around are legitimate. Or
because there are actually programs out there that are legitimate. And it is this
10% hope that everyone pours their money into HYIP.

You will also be surprised to know that, since the day HYIP came about, the number
of people involve in HYIP is growing. Have a look at the screenshot from Alexa
ranking.

I made a traffic ranking comparison of a popular HYIP community forum


talkgold.com and a house brand coca-cola.com

Would you believe it? The most popular HYIP community forum talkgold.com has
the same amount of traffic as coca-cola.com. So what is my point here? Even if you
were to see the trend, it consistently attracts new people into the industry. Well, I
guess HYIP will be around for years to come…..

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HYIP Risks

HYIP is invariably associated with risks. There are hundreds of new HYIPs opening
every month but most of them are scams and only a few will last for a long time.
Many times even a good program can turn hostile and take your money so caution
is always advised. So your investment is quite vulnerable to getting scammed! But if
you are a wise (or lucky) investor you can make a hefty profit of it. Anyhow, you
may be scammed once/many times either now or later this is just the way it goes.

You must always be ready to suffer a loss. HYIP investor masters always say- “Don’t
invest which you cannot afford to lose” So you should be ready to lose at all
times. One can never be 100% certain when an HYIP is going to scam. Also there
seems to be little recourse for the investors to use to try and recover their lost
funds so if you play know the risks. If you cannot accept this do not play. Investing
in HYIP is almost like gambling-the only difference is that if you invest wisely then
your chances of losing are reduced…

Choosing A HYIP

You may have many HYIP programs in which you would like to invest but always
remember never to invest blindly. I suggest you follow the following steps before
making any type of investment.

See if the HYIP is listed in any HYIP monitoring website. If so then what is the
current status? If the status shows “not paying” or “problem” then stay away
from it. You must also look for its feedback in forums of the respective monitoring
site. Notice its rating, & the user votes will help you determine the standard of the
HYIP.

Other large forums contain posts on many new and old HYIPs. Donate some time in
researching through the posts made by members of that forum. This will give you
much needed information. Secondly you may also post you experiences of any
previous HYIPs or even ask other members to help you in making a decision.

Look into HYIP news data and stay away from those HYIPs which are
declared/suspected scam.

Nevertheless to say, make a search on Google. You may use the following search
terms-
HYIPname (the name of the HYIP which you want to research on), HYIPname
paying, HYIPname scam, HYIPname problem, etc.

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DUE DELIGENCE

First you should know that due deligence is different from due diligence. The later
refers to a business term used for accessing the credibility of a client during
sanctioning loans, etc. Due deligence applied in the sense of investing is however
used to refer to certain techniques of self analysis made before actual investing.
When you have made some research on your HYIP program, make a little more
effort in checking out these following points.

And if you are intending to become a part-time earner, then you must learn to gain
efficiency in these following:

· Check if the domain name is free or a paid domain name. Free domains names
(sub-domains) are like HYIPname.something.com whereas paid domains are
just HYIPname.com (note the extension may also be something else like .net,
.info, etc). HYIPs hosted at free hosting are pure scam. Avoid them at all
costs.

· Look for contact info of the HYIP administrator. Many HYIP will use gmail because
of its easy of use but not always. See in the contact information if they give you
a postal address/telephone number. If not, then may be the HYIP administrator
does not want himself to be revealed to the public. Don’t trust him; the HYIP
may not be very reliable.

· Notice the websites design of the HYIP. If the design looks unique & professional,
then it’s a good sign. If the site is built on similar looking common template with
common FAQs then probably the HYIP is not intended to last for a long time. A
good HYIP should have a professional design with fast and well
responsive customer care.

· What is their interest return rate? Any HYIP which claims to pay more than 3%
daily is probably a Ponzi scam & will not last for a long time. Many HYIPs promise
to pay high rates such as 10% daily for 30 days or 50% daily for 3 days, etc.
They cannot possibly be genuine because it is not very possible to make so much
profit from actual Forex/trading in such little time! So if you decide to 'invest' in
this programs you should know that's pure gambling and make sure you get your
initial investment ASAP! Mark what is the minimum investment required. Many
HYIPs have minimum investments as little as 1$, 5$, 10$ or so. Just ask
yourself, what kind of trading will any HYIP do with 1$ or 10$ from you! Actually
they don’t trade at all. They are just Ponzi schemes. Don’t invest large amounts
in them. A good HYIP should probably have a minimum investment of around
20$-60$.

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· Many HYIPs offer investors an internal account within their site where in the
interest is deposited. Later on the amount is transferred to your online account
(e-currency) upon request. Others have no internal accounts and pay you
directly to your Liberty Reserve/ V-Money/Perfect Money account. The second is
preferably better because it offers a greater level of security.

· Check for whois information about the HYIP domain name. If you find irrelevant
information such as random meaningless words or controversial contact
information, then it is better to avoid. The whois data shows domain name,
registration date, expiration date, administrative contact, etc. If the HYIP says it
has been in this HYIP industry for a long time, but domain name was registered a
few months back only, then its reliability is in doubt. You can use whois.ws to see
the whois information for free.

· Respectable HYIPs never spam or let their users spam with their links. So if you
came to know about a HYIP through a spam email then be careful!

· Read through all the text in their website. There should not be much spelling
errors, and if they emphasize again and again the high rate of return then that
should also be a red flag. Look in the about us/FAQ section in the HYIP site. If
what you read is a generic reproduction of what is found on many other sites
then probably this program will not last long.

· Email the administrator of HYIP and ask him questions like “how can you pay
such high interests?”,”Who are you and where do you stay?”, “Can you have a
telephonic conversation with me sometime?”. If the webmaster doesn’t bother to
reply, or replies in a very awkward & non-convincing manner then he is trying to
hide away facts from you. He will never say that he is running a Ponzi scheme,
but you have to identify it! You may also ask for previous business history to
evaluate the ability of the HYIP owner to make the desired profits with your
investment.

You will get experienced in all these aspects as you spend more time in this HYIP
world! So never worry if you can’t make a final conclusion from accessing the above
factors, you will gradually learn them with time.

How Much To Invest?

This depends upon the following:

1. You just want to experiment with how HYIPs work

2. You want a part time income

3. You need a full time residual income

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4. You are a person who earns from online GPT programs(online get paid to
programs)

For the category 1- Invest 10$-50$ in few HYIPs to learn various aspects of
investing in HYIPs, managing e-currencies, etc

For category II-Invest 100$-500$

For category III-Your HYIP investment portfolio should at least be>1000$

For category IV-I personally know how precious are those few dollars that you earn
after several days of online surfing. You will really feel dis-hearted if you get
scammed of your hard earned little money by a bad HYIP. If at all you decide to
invest, then you must learn all aspects of successful HYIP investing so that you can
minimize loses.

If you are a newbie then definitely you fall in the first category. So start
experimenting in this HYIP world with an investment of around 10$-50$. Even if you
lose, I suppose you won’t become a bankrupt with such little money, but definitely
you are going to learn something.

Then you are promoted to the next stage of making yourself earn a part time
income. By this time you must have gathered some personal experience as well as
borrowed some other’s experience in due time. You might have already made
sufficient research work on HYIPs. So I assume you have quite a fair knowledge
about various HYIP aspects & can confidently make wise decisions on which HYIPs &
how much to invest. The time required for such experience may be 2-5 months.

If you successfully make a part time living for some stable months/years then I’m
sure you would like to earn as much as possible and possible graduate to a full time
earning. All those who make full time income through HYIPs become a kind of HYIP
professional. You will have a lot of information and can easily spot possible scam
HYIPs. You will have developed a personal investment portfolio and an analysis
trend. Most probably you will also be helping others invest in HYIPs and giving them
advice. You can use your full intelligence & expertise to invest and earn a decent full
time income.

Whatever be, HYIP risks are never diminished. So there are chances that you can
become bankrupt if you redirect to full time HYIP income without appropriate
knowledge & experience. It is best advised that HYIP investors restrict themselves
to just part time earning because larger investments equal larger risks and possibly
larger losses.

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INVESTMENT STRATEGY

The key to a profitable HYIP investment is just a single word-“diversify”.

It means you divide your total investment among several different HYIPs so as to
minimize risk. Investing in a single program is risky, because if the program
collapses, you lose all your money. But if you put your money into many programs,
if one of the programs fails, you will still have money in other programs. So by
diversifying you virtually decrease the % of lost money in your portfolio.
Profits can still be made from investments in other HYIPs that are operating
simultaneously, so it is quite possible that with a wide and wise portfolio you will
always make a NET profit.

How wide should my portfolio be?

It should be as wide as possible. For example if your total investment is around


500$ then your portfolio should include at least 5-10 (or even more) different
HYIPs. Invest about 50% in long term good old HYIPs and the other 50% in new
HYIPs.

These may include:

· Long term HYIPs are those that give around 1.5% daily and have a good
track history over 6 months with good customer support, professional web
design, etc. These are real HYIPs and actually pay customers.

· New HYIPs include those who pay around 2-3% daily with unique professional
web design & certain degree of reliability in other factors.

· You may invest in Ponzi schemes that give 5-10% daily, but join them early to be
in profit. If you like to take more risk(or try your luck) then join in pure scam
programs such as 10% daily for 30 days or 25% daily for 5 days, etc. Join early
during launch of the HYIP and invest a very small amount to minimize risk.

Scam HYIPs are run on Ponzi schemes. A Ponzi is a “pyramid system” in which
higher level members are paid with the investments from newer members. They
actually have a short life time. Many people lose money in these games. Their
websites are made from cheap old regular common templates (not a professional &
unique design), anonymous contact information, and give high interest rates (>3%
daily is suspected as a Ponzi), have an attractive referral system, etc.

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The average life cycle of Ponzi HYIPs can be stated as:

Extra Long term HYIPs (real HYIPs)


Such HYIPs pay about 1-1.7% daily or around 25% monthly interests. They usually
last for a long time over up to 2 years. Invest in these only if it has a good history
for about a year because profit recovery is very slow.

Long term HYIPs


They pay 2-3% daily and can last for about 6-12 months, some even last for more
than a year. These are the most optimal HYIPs for investing.

Medium term HYIPs (Ponzi)


Pay around 4-7% daily. Last anywhere from 2 to 6 months

Short term HYIPs (Ponzi)


Pay >10% daily these last for a few days to a few weeks. In rare cases with the
proper support these programs can last a few months

In conclusion of this section we can summarize:

· Don’t invest in new programs that pay less interest (around 1%daily) with a poor
non-professional web design, etc. It is a possible Ponzi and if so you will have a
hard time recovering your funds because it will take 100 days for you to break
even. Invest in long term HYIPs which pay less (around 1.7% daily), but have a
unique professional web design, and other positive features of a good HYIP.
Invest in them if they are already over 1 year old with a good track history.

· You may invest in HYIPs which pay 2-3% daily, have a professional template
design & other good features. Chance to be in profit is good. But again it is
advised to use caution with this group as well

· If you like to take risks then invest in Ponzi schemes that pay 3-5% daily. But
you should invest while the HYIP is still new so that chance of profit recovery is
good before the HYIP closes.

· Invest in still higher interest paying HYIPs if you can risk higher. HYIPs such as
7% daily for 60 days or 50% daily for 3 days are real scams. However if you are
lucky, you can be in great profits provided you invested while the HYIP was just
opening. But risk factor is also very high and I suggest not to invest more than
40$-60$ in such high risk HYIPs. It’s always better to avoid them.

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E-CURRENCIES

Since HYIP is transacted over the internet, there must be a medium where money
would exchange hands. This is where e-Currencies come in.

E-Currencies are a great supporter to this industry whether directly or indirectly.


E-Currencies are usually backed by gold or US dollars and it is a great way to
transact over the internet like cold-hard cash.

E-Currencies are considered international because it is plainly backed by gold or US


dollars and is hedged to all the global currencies. While gold is a precious metal and
global currencies are physical matter which can be seen and touched it is easily
regulated by each country that controls the gold or currency.

But for e-Currencies it is not regulated and controlled because it is considered global
and does not belong to any country and it can not be seen.

This is one of the top reasons why e-Currencies are the preferred choice by program
owners because it is global and not regulated. Another reason why e-Currencies are
used is because it benefits the recipient rather then the contributor that is to say all
transactions done via e-Currencies are final.

Liberty Reserve

Liberty Reserve is a 100% irrevocable payment system and digital currency


incorporated under the laws of Panama, with offices worldwide, including New York,
Germany, and France. Liberty Reserve is a member of the Global Digital Currency
Association (GDCA), a voluntary regulatory body in the industry.
Liberty Reserve offer extremely competitive rates & discrete, confidential service. To
open an account is free and internal transfer costs are a maximum 99 cents.

As with many digital currencies, Liberty Reserve does not accept direct transactions
to and from their system. Accounts are funded or cashed out using an exchanger,
and quite a few reputable exchangers accept exchanges of Liberty Reserve.
Additionally, the exchange rates for Liberty Reserve are currently much more
feasible than other e-currencies such as Pecunix. This fact makes Liberty Reserve
seem to be a viable option for smaller webmasters who are primarily selling
advertising or service on their websites.

Liberty Reserve’s user interface is simple and easy to use. The login process is a two
step process and Liberty Reserve does seem to have covered the bases as far as
providing a secure interface somewhere in between the simplicity of E-Gold and the
complexity of Pecunix. They provide an intuitive SCI/API for merchants wishing to

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easily add Liberty Reserve as a payment option to their websites, and within a few
minutes we had the merchant’s interface up and running on one of our test sites.

Get a FREE Liberty Reserve account Check a list of LR exchangers

RESOURCES

LRHyip.com - HYIP INVESTMENTS REGULATOR

Blog.LRHYIP.com - HYIP NEWS AND INTERVIEWS

TopGoldForum.com - MONEY MAKING DISCUSSIONS

HyipManagerScript.com - SCRIPT TO START YOUR OWN HYIP

LRDirectory.com - LIBERTY RESERVE MERCHANTS DIRECTORY

FastForexCash.com - THE ULTIMATE FOREX TRADERS GUIDE

LibertyReserve.com - MOST USED E-CURRENCY IN HYIP WORLD

Copyright 2008-2009 - www.libertyreservehyip.com

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