SimpleFund - The Un-Bank

You are a slave. Your parents are slaves. Your friends and coworkers, bosses and neighbors are also slaves. Slaves to what you might ask? Central Banking.

All money is debt, thus every person that engages in commerce is trading in debt, their own and others, that is held by the central banking system of the country they are in. Some people think that they are outside of this cycle by using cash, but every dollar created in a the Central Banking system was generated as part of an interest bearing loan.

This has created an economic system where every person, entity, government, and organization is enslaved by the central banks and monetary policies. Read this article for more details on how and when this system came into place in the United States.

SimpleFund represents a powerful shift. It is a way for people to grow and trade purchasing power, not just debt. It creates a free market, where individual consumers can convert their Central Bank "debt notes" into Real Value, and freely grow and trade this value with anyone around the world.

This is the mindset that most people have, and with good reason. The overwhelming majority of financial services overpromise, underdeliver, and their expense summaries leave you feeling like you're walking back to your lightpost with a handful of twenties.

We've been conditioned to view any financial product or service as shady, not to be trusted, and a trap. Consumer faith in financial services is at an all time low, and isn't likely to rebound anytime soon; and new ideas are often viewed as more of the same ponzi scheme.

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It seems like you can’t do much with just a dollar these days. It doesn’t buy as much as it did, and isn’t really worth that much. There is still one place that can really stretch a buck. A place where a single dollar is worth much more than it’s face value. That place is in Crowdfunding.

A single dollar donated to a Crowdfunding project does much more than add 100 cents to the campaign’s coffer. It provides validation of the concept, support of the vision, and motivation to the creators. It adds to the page rank, boosts the buzz, and increases the projects visibility. It says to other potential backers, this is something I believe in, and persuades them to take a closer look themselves.

So next time you stumble across a project that you think shows promise, give em a buck. It means a lot more than just money.

Are you tired of feeding the monster that is the existing financial and investing system? There's a better way. Free Your Money with the world's first Un-Bank.

SimpleFund is the worlds first Un-Bank. It's a socially funded exchange that lets Free Your Money. Find out how: http://bit.ly/1dg2VOG

SimpleFund's Investment Simulation, an algorithm calculating ROI based on SimpleFund's moving parts, is an effort to illustrate how future members can expect to benefit from SimpleFund's Social Investing concept.

This simulation is running continuously and calculating the return after fees as if SimpleFund had launched on Jan 1, 2013.

The performance of the underlying trust, combined with the Social Investing mechanism inside SimpleFund, has generated a return rate of approximately 36% per year. This means that a ScripBuck purchased at face value ($10 USD) when the exchange opened, would have been worth $13.60 after one year, and $15.23 today. Pretty good huh?

Just as the debate about the glass being half full or half empty means nothing without understanding whether the glass started out full or empty, doubling an investment means little without the context of Real Value.

Real Value, also known as purchasing power, is the power of your assets to be traded for others; how "much" your money can buy. We've all heard the anecdotal stories from our grandparents about buying out the grocery store for a nickel. Now you'd be lucky to find anything at the stores for just a nickel. The biggest driver of this is known as inflation.

Inflation

Inflation is the systematic reduction of an asset's purchasing power, usually money. From a very basic macroeconomic view, inflation is generated by increases in the money supply over time, which results in a general decrease of Real Value for said currency. There are other forms of relative inflation and price adjustments, but by and large inflation is a result of monetary policy.

How does this impact you? It means that every year, your money is worth less than the year before, with a long term average of 3%. So with that level, something costing $1.00 today would cost $1.03 a year from now. Inflation is also a form of compounding interest, interest on the interest, so the next year it would be $1.0609.

Investment Returns

The long term average for stock market investments is often quoted at 10%. The real average depends on the length of time you are measuring and other variables, and is more like 8-10%, but we'll use 10% for simplicity's sake. This is the number you'll be quoted by investment advisers and brokers, but only tells part of the story. The rate of return for a given investment is before calculating fees, taxes, and inflation; and represents an average over a given period of time. This means that the return you're likely to realize in any given year will actually never be identical to the historical rate, and often times is much less.

Rule of 72

Calculating the compound growth, and estimate the time to double, for a given investment can be difficult, and requires some fairly complex math. A easy estimate used by many is to divide 72 by your expected average return. In this example, you would divide 72 by the 10% historical rate, which would give an estimate of 7.2 years to double your money. Not too shabby? Don't get too excited, we're not done yet.

Taxes and Fee's

Realized management costs and fees average between 3-5% per year. This is higher than the estimates your likely to see in your prospectus, but it includes all of the commissions, transaction fees, management fees, and soft costs that the average investor never knows about. Taxes are another story altogether, with virtually every type of security receiving different tax treatment, but the average is about 1% per year. Apply these to your 10% return, and your seeing only 4-6%. Let's go with the middle, 5%, and plug it into the Rule of 72. That doubles the amount of time your money will take to double to 14.4 years.

Inflation (Again)

Did you remember that inflation plays a part in your realized return? With an average annual inflation rate of 3%, that brings your annual return down to just 2%. Not very impressive. Dividing 72 by 2 gives you an estimated doubling time of 36 years. Ouch. At least this is in terms of Real Value.

Time for a Change

SimpleFund is an entirely new way to think about investing. By combining a low cost ratio, a secure virtual commodity exchange, and a proprietary virtual commodity backed by real and appreciable value

Learn more at our Infosite.

Most people have, at one time or another, had an experience with their bank that left them like they had been used like a Kleenex. Here are eight ways that you may not even realize that your bank uses to get even more revenue from it's subject's, I mean customers.

#1: Applying Payments to the Lowest Interest Rate First

Let's say that you are making scheduled payments on a medium to large debt, and you steadfastly make your payments according to the schedule. Your creditor can choose to apply these payments, rather than the traditional illustration of interest heavy payments first, towards lower interest payments first, thereby prolonging the time, and volume, of interest payments. This happens often when a debtor get a new credit card for balance transfer purposes, but has been known to take place in home, car. and even personal loans.

#2: "Headfake" or "Teaser" Introductory Rates

We've all seen it. Banks offer a low, 1-2%, credit card rate or a high, 3-6%, savings rate to get you signed up, but if you read the fine print you'll see that credit card rate jump, ~28%, or savings return drop, ~0.06%, after a period of time. By then you are stuck in a deal that only benefits the institution, and leaves you in the lurch.

#3: Slight of Hand Rate Increases

If you read your fine print, you may find provisions that allow for your financial institution to increase, permanently, your rates by 2-5x for such trivial items as being one day late on a payment. Even if this provision is not included, virtually every institution holds the power to arbitrarily increase rates with no restrictions at any time.

#4: Fees

In Q4 FYE 2014, US commerical banks collected more than $40 Billion in fees, and it is estimated than more than 50% of all banking revenue comes from user fees. Overdraft fees are particularly troublesome since an overdraft of just $0.01 can result in a fee of more than $30, and many institutions automatically enroll customers in this "service". Some investment analysts have even estimated that up to 40% of all interest income is consumed by fees.

#5: Double Charging Billing Cycles

While you may, reasonably, assume that you would only be charged for interest on the remaining balance for a debt, may institutions actually charge you interest on the original debt amount until the entire debt has been repaid. This means if you have paid $200 of a $250 debt, you can still be charged interest on the original $250, rather than the remaining principle of $50.

#6: Universal Rate Hikes

Many institutions will increase rates for anyone that hits a trigger such as a change in credit score, inquiring about a new loan, being a day late on a payment, too much available credit, or having too much debt (even if your debt is serviced impeccably).

#7: Credit Limit Increase Fees

Many credit providers will apply fees for increasing your credit limit, in some cases as high as 50%. This means you might end up paying $1000 for the privilege of accessing a $2000 credit limit, and paying the interest and fees associated that go along with it.

#8: Opportunity Costs

If you keep money in a bank, you are losing Real Value. Real Value, also known as purchasing power, this measurement of how much your money can be traded for. Since the average return for any traditional bank based savings vehicle is less than 1%, and average inflation for the last 100 years tops 3%, at best your savings account, CD, or Money Market is losing you 2% of your Real Value every year, and that's before fees.

The IRS has decided. Bitcoin will be treated, for tax purposes, as property rather than currency. This deals yet another blow to not just Bitcoin, but all Cryptocurrencies that are built on the same foundation. Until this position is changed, these flavors of virtual commodity will never be the replacement for traditional currencies that early adopters had envisioned.

This added difficulty only builds upon the recent issues in the Bitcoin exchanges (such as mtgox), and the realization of many that virtual "cash" can be stolen as easily, if not more so, than physical cash. Cryptocurrencies that seek to replace "real money" will continue to see these issues because they fail to address some key attributes of successful long term currency policy. It is not "standard money" in that it claims to be something more than a "Exchange Media". It is an investment for some, but the primary function is as a transfer device (much like a MoneyGram). User A buys X number of Bitcoin for X dollars, the transaction is recorded and then User A can transfer the Bitcoin to User B, if they accept, as payment for a debt.

There is no central oversight or real security for Bitcoin's value, and they aren't really backed by anything. Proponents of Altcoin will point out that neither is "standard money", but apparently the "full faith and credit" that backs is good enough for it to be used in the overwhelming majority of all transactions around the world. Altcoin is built upon a libertarian's free market dream, but that same free market approach will hamper it's long term prospects, as we have already seen.

So, how is SimpleFund different? It's simple (pun intended). ScripBucks, SimpleFund's proprietary virtual commodity, are not intended to be a replacement for fiat currency, but rather are a vehicle for preserving and growing real value (purchasing power) for the members of SimpleFund's exchange. They are a tool for people to free their money from the current systems, which are overly restrictive and very costly. Rather than being a simple "Exchange Medium", ScripBucks are also a holding/investment vehicle that allows members to realize three kinds of growth, as well as increased liquidity, security, and flexibility for their value; and ScripBucks do not depend on any specific fiat currency to acheive this.

ScripBucks are backed by real value, in a secure trust, that is not dependent on the performance of any specific currency. 100% of all funds used to purchase New ScripBucks are placed in this fund, and are not spent or loaned out. Members can only purchase New ScripBucks when they open their account, after which all trading takes place in the secondary exchange (user to user transactions). The Face Value of ScripBucks is determined by dividing the total fund value by the number of ScripBucks in circulation. There is no dilution of value because every ScripBuck is backed by the funds used to purchase it. The underlying fund appreciates, and provides the first method of ScripBuck growth.

Members wishing to buy more ScripBucks, or sell their holdings to get cash, have the option of auctioning to the highest bidder or setting their own price. If the secondary exchange bears it, members can sell their ScripBucks for more than the Face Value, and much more than they paid. This is the second avenue for investment returns. Tax information is reported via 1099-B, and members pay the lower capital gains rates (due to the treatment of virtual currencies as property).

The third method of growth for the underlying fund comes from the reinvestment of transactions fees. Every transaction in the SimpleFund exchange carries a 1% transaction fee, based on the Face Value and payable by the buyer. 90% of this fee is added to the underlying fund, but no new ScripBucks are created. This means that with every transaction, the underlying fund increase in value without the number of ScripBucks going up, and translates directly to higher Face Values. The greater the volume of transactions taking place, the faster the face value grows.