Weekly Investments

About Solution

In many developing countries, the economy is not very flexible in a sense that the amount of economic activity is very little. This happens in societies where no single party or organization can efficiently generate capital to support production based industries. So, if we can find a clever way to crowdsource capital with trust-able investment policies, the economic activity can be greatly accelerated.

In some developing countries, use of mobile banking has seen a recent increased use. If we can establish a company that uses mobile application to raise capital from people who have bank accounts, such crowdsourcing could raise a lot of capital. However, investments usually require longer term commitments, at least certain sum of investments which may be difficult for people, and procedure that make the process longer and difficult. The use of mobile app simplifies the last issue. To solve the former two problems, the company would announce its weekly investment plans on Sunday, and users can invest in different plans through Friday. The weekly investment cycle closes on Friday and return of investments are done on Saturday, with the renewal of investment plans on Sunday. If we can reduce the commitment time to a week, and accept any amount of contribution, a lot more people would be willing to make investments with capital that may sit idle for a week, or even a day. The investments made on Monday through the week would get maximum returns, those made on Tuesday would get lesser returns, and those made on Friday would get the least.

The company needs to be supported by trusted investors so that people can trust the company with their money. Later, as the company grows people can change their investment plans mid way of the week, and even later investments made on Monday could be withdrawn before Friday.

The investments have to be returned within an average of 4 days in the beginning, so the company will not actively participate in production. Economic activities like transportation especially of food, will greatly be accelerated with such investments and hence agricultural economies will be benefited. Waste management will also see greater efficiency. Rent and second hand sale industry is expected to see a massive growth. Sale offers on retail markets will be benefited. The increase fluidity of economy will influence and support capital crowdsourcing. The company is a much needed equity investor powered by crowdsourcing, or a stock exchange within a customer product, that can perturb the idle economies. However, as the company acquires assets, it can produce equity based products. For example, the company can buy a restaurant and let some other restaurant run the restaurant management. The profits are shared, and as time goes by the restaurant management acquire certain percentage of equity on the restaurant. This feature is unique to the company because it stand by the company's motive of weekly (current) investments, and shared capital.

The company would however, have to stay true to the weekly investment vision. Increasing the duration of investment would take away the potential interest and makes it indistinguishable from other long term investments. This means that even though parties may be willing to make investments for more than a week, their investments will be returned on Saturday and they can make the same investments if the company's weekly investment plans remain similar. Banks and Insurance companies among other industries in developing societies form a chain of investment, one investing in the other and so the raised capital eventually does not contribute to production based industry. However, shifting the investments and increasing the economic activity with products other than capital assets ('as shares in investment), like food transportation, can eventually help the economy grow.

The idea requires analysis, and planned policies to make the idea successful. This would involve ideas like random walk analyses:

"The graphs where the walk is transient seems related to Cayley graphs which form the Banach Tarski theorem that says that you can build two spheres from the points in one Spheres. It does sound that it could be related to whether geometrical deformations are restored and sort of spread out or not, if they are which would be the normal 2d random walks, you can account for all the points and Banach Tarski equivalence will not be observed; but if it isn't the case like in Cayley graphs, the sort of permanent deformation could lead to the Banach Tarski theorem. I think with the Banach Tarski idea, we can model the apparent misinforming inflation that an economy faces because of Ponzi schemes (it seems that in the economy money is being circulated as corresponding to more spheres being created by Banach Tarski equivalence), in relationship to the actual decrease in the economic activity (because they take the money away). This would be helpful in understanding how much of the economy is circulated and how much is still, or the localization and fluidity of an economy."

Another idea that can be studied alongside the study of this idea, is unemployment capitalization. In many developing nations, there is no minimum wage and the working class people earn very little and hence have poor quality of life. Many other people are unemployed. However, since these people are spread out, and many live in rural areas, organizing employment opportunities is quite a challenge. So, the idea is to increase unemployment, so that those that were previously poor and those that were unemployed now form a much bigger human resource that can actually pay off to start new projects on large scale. However, such an idea is too risky to be tried on a real society. But the idea is similar to crowdsourcing capital in certain aspects, and the study of two ideas together can help us better understand economic mobility and make better-informed social and economic policies. 



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