Innovative and Humane Investments

Build and deploy innovative new financial instruments that create a more humane economy.

The system we are building enables you to define legal contracts for innovative new financial instruments that you create and deploy. You are not forced to do business the way it's always been done. You can create financial instruments that are fair, humane, and profitable. For instance, one such financial instrument that we've designed and dubbed the "unmotgage" enables you to buy a house without ever paying interest on a loan. 

New types of financial instruments like the unmortgage give you new ways to invest, do business, and create income for yourself. These new tools work especially well when used within the context of credit clearing cooperatives. They give both you and your co-op new ways to prosper.

The Unmortgage: A Humane Way to Buy a House

A good example of an innovative, fair, and humane financial instrument is what we at Cognisaya call the “unmortgage”. This financial instrument performs the same function as a mortgage but doesn’t involve interest. We call it the unmortgage because there is no English word for it.

Suppose you want to buy a home. Imagine also that there is a home for sale by a member of the co-op system. That member will be glad to accept credits instead of money. The first step in the unmortgage process is to go to your co-op and find an investment group that handles unmortgages. They approve you just as if they were a bank. In this example, we’ll say that the home costs $200,000 and you are required to put down 10% on the home. 

Next, the investment group buys the house with credits that members have deposited in its investment account and with your $20,000 worth of credits. The investment group is 90% owner of the house and you own 10%. You have entered into a business partnership with the investment group. You are not debtor and creditor, which is of necessity an adversarial relationship. The span of the partnership is 15 or 30 years (depending on how you set it up) just like a regular mortgage would be.

You now rent the house from partnership and move in. The monthly rent is approximately the same as the payments you would pay with a mortgage, and 90% of the rent goes to the investment group. The co-op, which manages the investment group, keeps some of that for the service of running the group. The investors get the rest as income. The other 10% of the rent you pay is yours. However, you don’t put it back in your pocket. Instead, you pay your 10% to the investment group for a greater share of ownership in the house. So every time you make a rent payment, the co-op gets 100% of the rent for the life of the partnership. That is how it makes its money without charging interest.

Each time you pay rent, your share of the ownership increases until you are the full owner of the house. At that point, the partnership terminates.
A 30-year unmortgage will make about the same amount of money for an investment group as a normal 30-year mortgage. In addition, the unmortgage is more humane. Suppose something bad happens to you. You become unable to make your rent payments. The co-op’s investment group must evict you. However, you do not lose your equity in the house as you would with a normal mortgage. The investment group does not repossess your house. Instead, they just rent it out to someone else who can pay the rent. The partnership continues.

Meanwhile, you do your best to recover from your financial setback. In the interim, the house is still being rented and the payments are still being made. You are still getting 10% of the rent and you are still able to apply that 10% toward ownership of the house.

This path to home ownership is much more humane than a mortgage. There is a distinct possibility that you will be able to get back on your feet and start making rent payments again. In that case, the investment group can let you move back in when the lease with the current tenant expires. Even if you can’t move in for many years, you are still on a path to home ownership for as long as the investment group can keep the home rented. Again, this is a distinctly more humane approach to home ownership that what we have now.

Partnerships Instead of Loans

With the unmortgage as an example, it’s easier to see how we might create an economy that is both profitable and humane. Investments based on joint ventures, equity shares, claims against future production, and revenue sharing can be as profitable as interest-bearing financial instruments and be healthier for the economy in the long term. We are really only limited here by our imaginations. With the software we're producing at Cognisaya, everyone can really invent innovative new financial instruments and economic structures that are both profitable and humane.

Our Software

The software we are producing at Cognisaya, LLC enables you to create legal contracts with programming logic built into them. Technically speaking, the TVS supports a scripting language and you can embed the scripts into the contracts themselves. The contract “lives” on the TVS until it reaches its termination conditions. At that point, the TVS stops processing the contract.

The upshot of this is that contracts can enforce their own terms and conditions. They can make deposits, withdrawals, and transfers. They can send email notifications, hold funds in escrow, and more.

In short, you can create brand new types of financial instruments and add them to the system, which will them process them as if they were built in. With our software, you can custom design your own money and financial system completely from scratch.

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