How to Earn Free Money With UpDown.com
UpDown.com is a fairly new website that combines a virtual stock portfolio with social networking. After signing up for a free account, they give you a virtual $1 million to invest in the stock market. Your goal is to beat the S&P 500 each month. According to a Moolanomy interview with Michael Reich, the site’s Co-Founder and CEO, their vision is to take advantage of the data that they collect to create real investment products that mirror their consistently performing top-members’ virtual portfolios.
The greatest part of the site is that members who outperform the S&P, are rewarded with real cash. There are no fees or financial risk for joining, and no way to ever lose money. They simply reward you for outperforming the market. My own portfolio modestly outperformed the S&P last month and I earned a little bit of money from it.
I just thought of a way to earn some risk free money using this site. This is incredible, and requires only about 30 minutes to set up. I’ve read through their Terms and Conditions and don’t believe that it violates any of their rules (although they do have the right to terminate accounts for no reason).
This method requires you to have an UpDown.com account for yourself, and for you to coordinate your investments with somebody else who has their own account. All you have to do is perform the exact opposite transactions at the same time on each account. For example, if you buy 500 shares of GOOG, you coordinate with your partner to Sell Short 500 shares of GOOG at the same time. When you sell your shares, have them ‘Buy to cover’. If you make sure to do this for every transaction that you perform, then no matter what the market actually does, one of the two accounts should outperform the S&P 500, and the other won’t.
Since the S&P 500 is made up of a wide variety of funds, theoretically, we’d see the biggest gain (or loss) by creating a portfolio of stocks that are very similar to one another. One of the rules on UpDown is that you can’t have more than 20% of your portfolio in a single stock, so my suggestion is to choose 5 stocks in a similar industry and buy $200k in each one. Coordinate with your partner to Short Sell $200k in each of those 5 stocks at the same time.
Over time, if the stocks you chose do well then your account should outperform the S&P. If the stocks do poorly, then your partner’s portfolio will do well. Either way, one of you should earn some real money and you can split the earnings. All you really need to do is set this up one time, then sit back and let it work. To continue earning money, you have to remember to log into your account each month.
There are also other ways to earn money on the site. Obviously, the better your portfolio does, the more you earn. You can also earn money by submitting quality stock analyses, and having people vote for them. They also have a referral program where you earn 10% of what your visitors earn.
So what are you waiting for? Start by signing up for a free account using my affiliate link.
(See my follow up post, and my quick stock-picking tool)
But that complete defeat the true purpose of the site doesn’t it.
Anyway, I think your readers will find the site entertaining, and hopefully educational.
March 14th, 2008 at 10:41 pmTrue. It is more difficult to experiment with the market and try to outperform the S&P on your own when you have to coordinate your trades with a partner.
March 14th, 2008 at 10:55 pmSounds neat! I just signed up and plugged in all my stocks, guess we’ll see how it goes!
Btw, any idea HOW MUCH they pay out when you’re over the mark? I couldn’t see anything out there other than the “we pay REAL cash for you and those you referred” text.
Thanks for the tip on how to guarantee a win, but I’ll probably just play for fun and see how I do solo. Then you’ll get 10% of however much I make too.
March 16th, 2008 at 12:09 pm[...] Saturday I posted a simple way to always make money on UpDown.com. I’ve been thinking through that some more in the past couple days, and [...]
March 16th, 2008 at 5:13 pmI don’t think they have published their formula for calculating payout amounts. I saw one interview saying that their top investor made over $600 one month. From my own experience, I started on February 21st had a portfolio that lost 4.2% versus the S&P 500’s performance of -5.29% over the same time. I earned a penny on March 1st for those 8 days.
I’ll post more information as I have it available. Unfortunately it seems to be calculated only at month-end, so I’ll just have to wait and see.
March 16th, 2008 at 5:21 pmThe fact that you have to invest in at least 5 stocks will reduce the success of your strategy. Even investing in 5 similar stocks, some of them will probably beat the market and others not. So you’ll probably end up with 3 winners/2 losers versus your friend with 2wins/3losses. Since you earned a penny for beating the market by 1%, I’m guessing that you’d have to significantly beat it to get any sizable money. Beating the market on 3/5 probably isn’t going to get you into the significantly outperforming category. The site does sound interesting though, so I’ll check it out.
March 17th, 2008 at 11:03 am@Mike - I agree that having 5 stocks will limit the success, which I’m sure is why that rule is in place. Still, it is kind of fun to watch and play with. Free money is free money, so even if I earn a less than a buck a month, I’m still happy.
March 17th, 2008 at 11:16 amI had a positive gain one month, and beat the S&P by about 4 percent and they gave me 22 cents. I think the amounts are variable, and if you do well every month, they treat your earnings with a multiplier…so I hear. I just don’t know how to claim the money. Has anyone gotten their share?
July 28th, 2008 at 3:36 pm