The "Hit-and-Run" Clause from Jerry Walbert

Today I'm going to touch on what is known in the online investment arena as the "hit-and-run" clause. In order to get a better understanding of it, let's use a theoretical deposit of $20 into a fictitious program. Let's assume the program pays a revenue share (RS) of 20% a week (like MyMarketShares). The $20 is deposited, and the required surfing is completed for the week. "What happens to the $20?" is the most common question asked. "Does it get taken?"

First of all, the $20 does stay in there, constantly working for you. What you do with the $4 RS payout is up to the member. If you want that $4 to compound, do nothing, most programs will roll it up automatically. How much of the $4 compounds depends on each program, but always the balance will go up - in this case, higher than $20.

If someone decides to cash out some or all of that $4, they may do so. Here's where it gets tricky. Because some people are filthy rich, they would put in huge amounts of money into a program, get the profit and then never "invest" again. That is called "hit-and-run." It usually always destroys a program. So to prevent that from happening, admins use what is called a "hit-and-run clause." If the member tries to do that, they are penalized.

So, just remember 50% is the magic number. If you cash out 50% or less, you will always be ok. In this example, you would cash out $2, and the $20 stays working for you. But, nothing is rolled up. So you could just cash out $2 a week for as long as the program lasts.

If you cash out less, say $1, you get that buck and the rest gets rolled up. The balance will go up and become larger than $20. It's like your compounding weekly.

If, however, you cash out MORE than 50%, the hit-and-run clause takes effect. You get the money, but your balance will DROP. In other words, you will end up with less than $20 in the balance.

Basically, just don't cash out more than 50%. A good rule of thumb is to cash out 20% and let the 80% roll up. For $20, cash out 80 cents and roll the $3.20. I would most likely do a $1 cashout and roll the $3.

I know a buck a week doesn't sound like much, but it's only $20 that was put in. It will go up each week as you compound, but with that small amount, it won't be much. Like they say, it takes money to make money.

If this is still not clear to you, just leave a comment :)

Jerry Jon Walbert