KickstarterForum.org

Hey everyone, Gearing up for a Mid-April launch, and need some objective feedback. Don't hold back, let me know what you think. Still waiting on the Voice Over work to finish and add the video. Thanks in advance.

https://www.kickstarter.com/projects/20 ... n=e9ae51bb

Ummm is this a serious campaign? I'm pretty sure this kind of enterprise is strictly controlled, nice idea though.

It is indeed. This enterprise is no more strictly controlled than buying credits in an online game, and is no different in principle than how gifts cards work. It is a socially funded commodity exchange that allows people to break out of the constraints associated with traditional banking and investment systems. It's a novel concept indeed, and as such is not for everyone. I have several years of industry experience, and know how much the real cost of banking or investing is for the average person. This is a way for people to escape that burden, and have more control and flexibility. Thanks for the response.

Interesting, so the pledge is just a donation or is it a participation?

I want to wait to see the video. I think you're biggest hurdle will be establishing credibility. Also, I think your reward tiers could use some work. They don't seem very compelling to me, unless you already have an established audience you are planning on sharing the campaign with.

I usually don't comment on the merit of the idea because I view it more of my job to help people optimize their campaign - no matter what the idea. However, I'd like to share just a few thoughts having studied economics in college haha.

Traditional banking and investing simply doesn't work for a large group of people. The system can be dauntingly complex, and it's designed for high net worth individuals to take advantage of. It's like seeing who can fill a hole in faster, some people may have a backhoe but most people only have a teaspoon.

You make a bunch of assertions, but I don't really see where this is backed up by facts or statistics. Do you plan to do this in your video? To be honest, I don't think traditional banking is broken at all in the USA at least. The FDIC (federal deposit insurance) makes it a great option for every day americans to save. Granted, you won't make a lot on interest payments, but it's more designed for the security of your money - it's not seen as investment.

It's definitely arguable that other forms of banking (not traditional banking) need better government oversight and regulation.

Simple Fund seeks to provide everyone, regardless of how many zeroes their account has, the same opportunity to harness the power of compound interest and large investment balances, without wasting thousands on high expense ratios and taxes.

The statement regarding harnessing "large investment balances" kind of contradicts the statement you made earlier "The system can be dauntingly complex, and it's designed for high net worth individuals to take advantage of."

If you say the first banking system is designed for high net worth individuals to take advantage of, you may want to consider rephrasing that one selling point of your system is to harness large investment balances (which would be owned by a high net worth individual).

I also don't understand what compound interest has to do with this? The majority of wealth created from compound interest comes via stock market/bond/real estate/mutual fund/index fund investments over a lifetime, not from bank account interest.

Regarding taxes, personally, I think it's only a matter of time before virtual currencies are subject to the same tax laws as traditional money, but that's obviously debatable.

Don't say these things to attack your idea - just trying to spark some thoughtful debate .

cmuscata - I would prefer to offer participation rewards, but I fear they will violate Kickstarters rule against 'Cash Value Equivalents', I am currently planning to have a pre-order campaign for early adopters on Crowdtilt. I am definitely open to suggestions on better rewards.

sbriggman - According to the FTC, banks/lenders are in the top five for the highest number of consumer complaints, and more tham $10 million households in the US do not use banks. There is not nearly enough money in the FDIC fund to cover even 10% of bank assets, $25 billion vs $9294 billion deposited in US commercial banks. The top 5 banks in America would not be profitable without tax subsidies, but still expose $300 trillion to risky derivatives. How do savings accounts work if not by compound interest? That is what provides the interest rates for the accounts, but rather than investing in the market they invest in individuals (car/home/personal loans).

Thank you for pointing out the confusing nature of my description. By taking advantage of large investment balances, I mean that everyone's funds are pooled and return a higher volume (without being spent), as well as reinvesting the majority of transaction fee's. This translates directly to a return that will do no worse than a few percentage points above the market. With the 1% transaction fee as the only cost to members, it avoids the opportunity costs, 'head fake' introductory rates, account and minimum balance fees, and withdrawal penalties of traditional savings accounts, all while providing increased liquidity, higher security, and a much higher interest rate. It's like a debit account that grows at a higher rate of return than a mutual fund.

I agree that additional taxes on cryptocurrencies are coming, but ScripBucks are not a cryptocurrency, they are scrip. The same as gift cards, or credits for online games. They can only be traded in the exchange, which adds to their security. The US government even issues scrip for it's overseas military and other personnel for security reasons. It;s better to view it as a commodity than a currency, but for most purposes they are synonymous.

There is not nearly enough money in the FDIC fund to cover even 10% of bank assets

"FDIC insurance covers all deposit accounts, including checking and savings accounts, money market deposit accounts and certificates of deposit. The standard insurance amount is $250,000 per depositor, per insured bank, for each account ownership category." - This covers the savings of the majority of depositors.

"How do savings accounts work if not by compound interest? That is what provides the interest rates for the accounts, but rather than investing in the market they invest in individuals (car/home/personal loans). "

What I was trying to say is that an individual (not the bank) is not going to become wealthy via compound interest from a savings account. They could via compound interest from investments (mutual fund, index fund, real estate, etc). This fact made me confused as to why you would promise in the campaign that compound interest is a selling point for your system.

By taking advantage of large investment balances, I mean that everyone's funds are pooled and return a higher volume (without being spent), as well as reinvesting the majority of transaction fee's. This translates directly to a return that will do no worse than a few percentage points above the market.

If ScripBucks can only be traded in the exchange, what are you going to do with the pool of funds (ScripBucks) that are contributed by users in order to pay an interest rate on each users's account balance? If you were a bank, you would be able to use the deposits to make loans/investments and afford to pay an interest rate. If ScripBucks are limited to the exchange, you would not be able to do this?

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.

Thanks for clarifying some of the concepts. I don't have any specific reward ideas, but I've provided some general reward ideas in these two posts:

http://www.crowdfundingpr.org/25-killer ... ard-ideas/
http://www.crowdcrux.com/15-indiegogo-reward-ideas/

Yea - I think finding your ideal customer is one of the hurdles you need to overcome. This system wouldn't be for me.

I don't like the idea of speculation or that "early adopters" of a currency should be rewarded in the future (because they can sell the currency after a year or two and it will be worth a tremendous amount more).

It's cool that it's a self-promoting system where users who initially adopt the currency are incentivized to spread the word about the new system so that the value of their funds will increase in the marketplace as more people want to convert dollars to the currency. However, it also has hints of a type of pyramid scheme.

Individuals also do not become rich from the overwhelming majority of variable investments

Just speaking of traditional investors (households) - Dollar cost averaging via an index fund over a lifespan (let's say 60 years) traditionally will average about 10 percent a year (obviously peaks and downs in some years). To me, it just comes down to the time value of money and FV equation (http://www.calculator.net/future-value-calculator.html). Yes, this does not take into account inflation.

Speaking of professional investors and businesspeople, pretty much every businessperson or investor I can think of must engage in variable investments to become wealthy (even if it's their own business).

90% is added to the trust account

So if I pay $100 for 100 Scripbucks, $0.90 would go into this trust. Where would my other $99 go (assuming I am the first person to buy)? I would also then have 100 scripbucks which have a market value of $100? I am then entitled to a percentage of the trust? This would heavily favor early adopters if the trust pie continues to be split evenly among all users.

Almost. Let's say that Buyer 1 purchases 10SB at $10 USD Face Value ($100 total). You would have 10SB worth $100 USD. Early adopters pay no transaction fee, and 100% of those funds are placed in trust, but let's discuss how the process will work long term. The transaction fee of 1% would add $1 USD to the total paid ($101). 10% of that fee, $0.10, is retained by the company, and the additional $0.90 is added to the fund. If these are the only Scripbucks in circulation you would have a fund value of $100.90 USD divided by 10SB for a Face Value of $10.09 USD. Now lets say that 1000 new members sign up and buy 10SB each. They would be buying at the new FV of $10.09 USD (in reality, each purchase would increase the FV incrementally for the next buyer, but let's keep it easy). This would represent a total payment of $101,909 USD (including transaction fee). Subtract the retained income, $101.9 USD, and the new fund volume is $101,916.1 for a FV of $10.18 USD. That's a 1% increase for the first buyer, in what could be a matter of minutes. Add the market appreciation of the underlying fund, and it grows even faster. The more participants, the faster everyone's holdings appreciate. And since it is a virtual commodity, when you sell your SB's in the exchange the income is simply reported as income. Like if you sold an old car to someone. A 1099-B is created for every member to do their taxes. Dead Simple. All funds are immediately transferred into an account of your choosing, whether a bank or PayPal like service.

Buyer 1 can now decide if he wants to hold, sell, or buy more (dollar cost averaging). This is not a speculative investment by any means. It's Social Investing. SimpleFund is just a Virtual Commodity Exchange, with a single commodity, ScripBucks. The same market principles that govern Stock and Commodity exchanges apply, but with three major growth factors driving the appreciation. It is an entirely new method of variable investment, but with fewer risks, lower costs, and explosive growth potential. The currency/commodity is not the product, the exchange is. Much like when you buy stock, you're not buying a product, you're buying the opportunity for appreciation.

I'm not sure how it looks like a pyramid scheme, perhaps you could let me know the phrasing that brought you to that conclusion? The only real incentive for early adopters is no transaction fees on the first million SB, much like a higher introductory rate on a savings account.