The FDIC does not have enough fund volume to cover even a scant minority of depositors. The FDIC fund is a mere $25 Billion vs total US deposits of $9.3 Trillion, and was very nearly bankrupted by the relatively small volume of claims during the upheaval in 2009. It got down to less than 1 billion in available funds.
Individuals also do not become rich from the overwhelming majority of variable investments, especially when you measure in terms of Real Value (purchasing power) rather than just volume of dollars. Variable investments, are in principle, just a savings vehicle with an opportunity to perform at higher rates than savings accounts, Money Markets, and CD's; and much like any savings vehicle, the majority of a given account holders value is the invested capital not the earned interest. This means that that million dollar mutual fund account is really made up of 60-80% invested capital, with interest forming the balance.
What the majority of investors do not see is the hidden costs associated with savings and investment vehicles. The average for mutual funds is 5.17% annually realized expenses, not including soft costs which are almost impossible to account for. This applied to the 85 year market average of 8.8%, results in a realized gain of 3.63%. Apply average inflation over that same time period, 3.3%, and you get a Real Value return of 0.33%!! The rule of 72 shows that this will take 218 years to double your purchasing power. Not a great opportunity I would say. With the same market conditions, SimpleFund is projected to have a 9.88% Real Value return.
SimpleFund performs much better because it combines a load free trust account, where member funds are held to appreciate, with the ScripBucks exchange. The funds used to purchase ScripBucks are placed in the secure and balanced trust account, and remain there. This account provides the core value behind ScripBucks, fund size divided by number of SB in circulation equals Face Value. Every trade in the exchange carries the 1% transaction fee. Just 10% of this fee is retained for the company, as operating revenue, and the other 90% is added to the trust account. This results in increased fund volume, without increasing the volume of ScripBucks, which translates directly in higher Face Value's for everyone. In essence, it means that two types of compounding interest are working on a single fund. A third method for members to profit is consumer demand in the member exchange. Lets say that you bought some Scripbucks at $10 (early adopters take note
, and after a month they are worth $12. You decide to sell them via auction, Cashing Out, so you choose a 1 day auction to the highest bidder, and they sell for $15 to someone who plans to hold them until they are worth $20. Or you can decide that you want $20 for them, and set that price. If the market bears it, you could realize a 200% ROI in just over a month.
I understand that it seems foreign, after all it is a novel method, but there's no black magic here. Just basic, simple math and combining different concepts together. It really is the worlds first Un-Bank, and it's socially funded. My goal is not to get rich quick, nor should anyone's that chooses to participate in SimpleFund. My mission is to change the way that the world views and uses money. The potential power of this system is almost mind boggling. There are no limit on fund size or membership. The only real limit is that no one member can own more than 5% of the total ScripBuck supply. Anyone in the world can choose to participate, and reap the same returns as anyone else. No one that works at SimpleFund will be allowed to participate in the exchange, to prevent opportunities for corporate fraud, and the security of ScripBucks only being valuable inside the exchange means that there is nothing to gain by attempted theft from the outside.
Thank you very much for the feedback I can see that there is a definite need for clarification. SimpleFund is not going to be for everyone, after all what is, but for those that don't like the costs and low performance associated with traditional savings options or the high risk and fees associated with traditional investing, it represents a tremendous opportunity for freedom and control over their investment.
Do you have any suggestions for different rewards? I would have loved to offer ScripBucks, but I believe that Kickstarter may deem them in violation of their prohibition on Cash-Value Equivalents.