Funding Glut is a situation when investors invest too much in the project, and the load on the cash account becomes too large, which leads to the project going scam. Investing excessively in HYIPs is especially dangerous at the start of the project and is almost always a sign of the scam.
Which Projects Can be Pelted with Money?
First, when assessing the risk of money bombing, one must understand that not every project can be invested excessively.
Low-interest HYIPs are almost not prone to money pelting and can safely withstand the strongest load on the deposit. The fact is that they have a natural protection – a low percentage. Low-interest projects do not need to pay large returns to investors, and their plans are usually very long.
Mid-interest HYIPs can already be pelted and there are numerous examples of these. They have decent interest, and the plans are shorter. But still, the admin has room for maneuver.
High-interest HYIPs are more prone to money pelting. There is a whole list of reasons why high-interest HYIPs run the risk of being pelted with money: short plans and very high interest make them the riskiest as for being pelted with money and going scam fast.
Investors try to invest in high-interest HYIPs at the start, because the lifetime of such projects is not great, and there is the greatest chance of earning only at the first stages. The intrinsic banal greed blinds the mind and people invest in HYIPs in pursuit of high interest sometimes without analyzing them properly.
Why is Funding Glut so Bad?
Scam itself is not something strange or horrible. any project goes scam in the end, it’s a matter of time. What is important here is the time during which the project operated and the investors’ profit but not the fact of its going scam. In the case of money pelting, scam comes very quickly, almost at the project start, which is bad, because:
A HYIP has operated a little and realized only a miserable percentage of its potential. The administrator could have plans for the project development so that it could work much longer. Investors having pelted the HYIP with money invested a lot of money, and are sure to be in the red.