REASON #1: HAC does not offer multi-level marketing. Definition of "pyramid scheme": A fraudulent moneymaking scheme in which people are recruited to make payments to others above them in a hierarchy while expecting to receive payments from people recruited below them. Eventually the number of new recruits fails to sustain the payment structure, and the scheme collapses with most people losing the money they paid in. There is only ONE level who will get paid in HAC, and it will be the partners who help establish it (plus whatever employees the partners would have to hire to manage operations). There will be absolutely NO sub-levels of marketers. Plus, the partners and staff would get paid only via a portion of the entry fee.
REASON #2: HAC members will not be selling a product. A typical pyramid scheme centers around finding recruits to pay a sum of money to join the program and become a distributor of a product or service, who are told that they'll make money based on the number of new recruits they in turn bring in. HAC members will be buying (not selling) a home when they reach the top of the home-buying list. Members can sell their space; however, they can sell it only once, and, once they sell it, they are out of the process. Plus, NO ONE other than them profits from the sale.
Plus more, ALL the money contributed to HAC by its members will be accounted for:
1) The background-check fee will be paid directly to the entity hired to check the member's history. HAC could probably negotiate a bulk contract and even save potential members lots of money regarding this.
2) The entry fee will be used to maintain/expand operations as well as grant the partners a profit. (I was thinking that, maybe, $100 would probably be a good entry fee.)
3) The Required Cycle Fee (RCF) will be stored and accumulated until it's large enough to purchase a home for the member who tops out, with said house-buying member receiving a credit equal to the total amount they have paid in RCF payments (Actual Accumulated Cycle Fee--AACF), which the Club would use as their down payment.
4) Money paid into the HAC Insurance Fund will be permanently stored in the bank and will be paid to Club members filing legitimate claims. It will NOT be used for any purpose other THAN home insurance.
5) Money paid into the Donation Payment Option will be deducted from the amount owed by Club members who have purchased homes through the Club.
6) Foreclosures: Unfortunately, if a member can't pay off their home, foreclosure is a necessity in order to repay the members' money. Regarding this, all members will be required to sign an agreement stating that they will in no way make any alterations that will decrease the value of their Club-bought home before completely retiring their debt. (For a foreclosed home left in acceptable condition, the Club will probably adopt the benevolent policy of selling it and repaying the member the equity he/she has put into it.)
7) Members opting out of (quitting) the Club before reaching the top of the list will have their AACF repaid along with any amount they paid into the HAC Insurance Fund (HACIF). Members selling their space will have their AACF refunded; however, their HACIF contributions will not be refunded (to help serve as an incentive to use HAC as a house-buying, rather than as a fundraising, mechanism).
8) Should the Club disband: When members join, they'll be required to list, in preferential order, some personal and organizational beneficiaries who will receive their funds should they die before their HAC cycle ends or should they die and HAC disbands. If HAC disbands, the members will receive all unused funds they have contributed. If a member dies and HAC remains in operation, their beneficiaries will receive the funds. Along with any other organizations that members list as beneficiaries, they will also have the option of listing the HAC Insurance Fund or the HAC Donation Payment Fund as a beneficiary.
Now, there are some who may ask: "Wouldn't this project offer a disadvantage to those members at the bottom of the list?"
Answer: Women on the planet do a miraculous thing. They HAVE BABIES. And these offspring grow into adults who continuously NEED HOUSING. Millions of children are birthed onto the planet every year, and thousands in the U.S. alone reach adulthood every day. They will serve as a perpetual membership support-base that will continually push the prior-year HAC members upwards on the home buying list. Just like the fact that Social Security depends on "new blood" to fill its coffer. So do insurance companies.
With this in mind, if freshmen college students are recruited, many of them could be at the top of the list only a few years after they find employment. (Also, never forget, all members can accelerate their rise on the list by contributing more than others.)
Finally, let's look at working figures. Let's say that, when the Club becomes operational, the average price of a home is $200,000. Let's also say that the average Home Price Range by HAC members is also $200,000. Finally, let's say that the Club will maintain a mandatory reserve of at least 25% (to refund funds paid by members passing away or opting or selling out). This means that ONLY 1,250 members (paying a total of only $250,000) would have to be acquired before the first home could be bought.
THINK OF IT! Just that few people could kick it all off!
There would NEVER be more than a few thousand on the house-buying list at any one time because homes would be purchased as soon as the purchasing level is reached.
In closing, and to emphasize again: Just think of all the good that the savings spent by the members could do for a broader base of merchants--or just for the members themselves--than if it was all hoarded up by a few elitists imposing interest rates and keeping us subject to the forces of inflation!