ByPovilas S
Tip jar design to attract more money
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Challenge
Mikhail Korsanov Aug 05, 2022
How to provide unconditional non-governmental basic income for everyone who wants that
Image credit: https://medium.com/cryptodex/a-blockchain-perspective-on-basic-income-pt-1-376a58b5387
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I have an idea how to provide non-governmental basic unconditional income for everyone willing that.
Is 50% of yearly profit for capital with low risk achievable if you combine the 100 most productive traders in the financial markets with trading strategies that will balance each other and generally provide high income stability?
If yes, then a fund is made that unites the 100 most effective traders. It manages its portfolio to reduce risks and increase profit. Let's narrate to the general public:
You work (or you do your business) and we supply you with everything you need for life during 6 years, you buy from us. We have average market prices. Then you will get everything for free.
How it works: we put the profit from selling you everything you need (30% of the price) into such a fund with the best traders. It is spinning there, it is steadily growing by 50% per year. Over 6 years, 227% is growing, so you can no longer work: we will continue to supply you with everything you need for interest on this saved capital (113% per year, that is, enough for life).
Who implements this idea, will be very rich, because (s)he will intermediate at a wide river of finance, with taking a reasonable % from it for him/herself.
If there is constructive criticism - I will be glad!
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Creative contributions
Start with one commodity at a time
I like the idea. Here is an example of what I mean by "one commodity at a time": You are a company that requires paper. You approach the paper-making company and buy paper from them. You enter into a lifetime agreement with the company. The agreement states that you will buy paper directly from them (you mention the amount of paper you need in a typical month) for the next 20 years. On the other hand, the company invests a part of the profits it makes by selling you the paper into a healthy fund. To generate more money, you cut the middlemen involved (packagers, movers, retailers, etc.), which reduces the cost of the paper you buy. However, you still pay the full retail amount to the paper company. The company then uses this additional money and invests it. The returns might not be as great as 227%, as you suggested, but pretty good for a company since it can invest more than a regular person. You keep buying (say for 2-5 years) by the retail rate until you invest enough amount. The company tells you that for the amount of paper you use, this investment is sufficient. After that, you don't pay for the paper. The company provides you with the required paper for free. If incidentally, for some reason, you need additional paper, you only pay for that surplus amount, that too, with the wholesale rate. The interest that your investment generates is enough for the paper you buy monthly. Towards the end of your agreement (after 20 years), you can decide to continue or terminate it. Upon termination, you get your invested amount back. You can transfer the invested amount to another company (a company that makes paperweights).
You can do this for commodities that you use regularly in sufficient quantities. If you are a hotel, you can do this with a cutlery- and glassware-manufacturing company.
One commodity at a time is more feasible than buying everything from one company since that one company cannot manufacture everything you need. Therefore, it will buy some of the items you need from other companies and they will have to pay for that third company's profit. This will dilute your investment.
Moreover, the one commodity scheme is good to test the markets. It will tell you what happens to your investment and returns during recessions and price hikes. After you have tested using one commodity and tweaked your algorithm to sustain the agreement, you can go on investing in other commodities.
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General comments
J. Nikolaa year ago
Example of investment funds
I recently had a chance to invest in crypto through a company that does daily trading. They bring profits up to 100% for 9 consecutive years. I know that because two of my close friends are working with them for years now. Their model is similar to what you proposed. You invest money at the beginning and they generate gains. After a year, you can collect all money from the fund or just keep it all there for another year of investment. The company takes 20-40% of profits. Depending on the initial investment, you can (as my friends did) reach a stable annual income just from a small percentage of the profit. Sound pretty much like what you proposed. However, the novelty of your idea is in the initial investment policies.
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Mikhail Korsanova year ago
J. Nikola very good performance! Yes, 2 differences: firstly, no way investing all in one place, secondly, we allow to invest even to those who does not like or understand investing: consumption is understandible for everyone.
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Povilas Sa year ago
In the "how it works" part where you write "we will continue to supply you with everything you need" - does this mean that the consumer is only supplied with goods and services provided by a particular company? They don't get any money? If so, this is not an income and the idea should be named a bit differently.
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Mikhail Korsanova year ago
Yes, the consumer gets a package of all necessary products and services with preselected quality. Due to big quantities, price is lower. This works as a consumer cooperative. Also, cooperative optimizes quality to make sure that is healthy and has no hidden defects and problems. Also, shared use where possible, this saves money. Also, including into the package high margin products, like preselected trainings and educational courses with proven quality and results, with high value for life. This allows to reduce prices for the basic products still more, making them attractive not only for long term unconditional income purposes, but also here and now. Also the cooperative may own a part of the facilities producing and transporting the goods and services, so there is no need to pay taxes to government for that part of supplemented value. This also reduces the price. Why income, because natural form of income is also income. Yes, members of the cooperative will get some money to buy something they want on the outer market. However the most of needs will be covered by the cooperative.
Why income, because a natural form of income is also income. Yes, members of the cooperative will get some money to buy something they want on the outer market. However the most of needs will be covered inside of the cooperative. This is much more cost efficient: this will allow to earn your unconditional life-long supply for 5-10 years, not 15-30. However if someone wants to use external market for consumption, one may. Also one may get money instead of products and services. This will be 2-3 times less beneficial, but still possible.
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J. Nikolaa year ago
Proof-of-concept
The idea is really cool. I tried to put it on paper to understand potential issues and this is what I got.
If I annually spend my whole salary every month, that would be, by US standards, $56,310 . If you take 30% of it into an investment fund, you would be taking $16,893 every year for 6 years. Since this amount would not come at once but would be continuously collected during a year, I assume a good way of calculating this would be to divide the total annual amount on 12 months and do the same with 50% annual profit. That gives us $1,408 of "investment" and 4.17% profit per month. Let's make it $1,000 since it's more realistic and for the sake of easier calculations.
Starting with $1,000, after 1 year the fund would grow to $15,170. After 6 years, you would have around $430,000. Now I am not sure what you meant by 227% growth and a 113% cut for the customer), but I'll take it as a proposition to take half of the profit to the fund, and a half to fund the customer. That means that if the gains are the same (50% annually), with $430,000 in the fund, you can take as much as $17,500 out of the fund each month while still allowing annual growth. Everything more would cause a reduction in the fund. (Please correct me if I did something wrong here)
Suggestions and concerns:
- After 6 years, the fund is huge and so are the profits. Anybody capable of doing beginner algebra could understand that just providing customers with everything necessary for life is actually stealing a lot of their money. I would give to customers at least $7,500 per month, and still have $10,000 to give to the fund management team.
- After, for example, 10 years, the fund would be so huge that you could take $90,000 per month without causing the fund to start reducing, which means $40-50,000 for the customer! Maybe raising fund duration could be great for the overall benefits to both, customers and fund managers.
- I would like to see a fund that makes 50% gains for the last ten years, just to see that it's possible :D
[1]https://mint.intuit.com/blog/salary/what-is-a-good-salary/#:~:text=What%20Is%20the%20Average%20Salary,wage%20of%20%2420.17%20an%20hour.
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