Chapter Eleven

In your thirties there are other goals you should have:
1. You know that medical bankruptcy is the major cause of bankruptcy in the United States. You should plan for this in your thirties or at the latest in the forties. But how can you accomplish this, not only for yourself, but for your elderly relatives?

One way is to establish a Family Bank for yourself, relatives and even others.

The Family Bank idea teaches families how to organize themselves into being a bank for the immediate and extended family.  
Formed as a non-profit, the Family Bank would save for the future for education, for medical emergencies, for living arrangements for the elderly, to avoid education debt and other expenses by:

1-Assessing family members small payments of five-ten dollars a month in
exchange for the right to borrow up to 300 dollars in a revolving loan
fund for low income relatives:

2-Other family members participate in a savings fund for the children and the elderly and for family emergencies, and even down payments for real estate for children and the elderly.
 

3-Participate in a investment program for family emergencies

4-Being a non-profit, the Bank could solicit grants and tax-free donations and
ultimately start to help other families initiate Family Banks as well.

I did this in Berkeley years ago and that worked very well, eventually families accumulated money to provide security for family members in as little as three years while taking care of immediate needs.

No family member should be living isolated, poor, with no security. A Family Bank can help, especially if many such banks are organized. Family Banks often trade services eliminating the need for money between them. Have your daughter watch my kids and I will teach your daughter to play piano.

Another example:

Time Banking: exchanging services for items bank members would ordinarily pay cash for. We exchange services with no cash, I tutor your kids for you and you teach my son guitar.

In the Methodist church we established a "Finder's Club" where we find individuals for individuals for specific items for free or for a small fee. You need someone to paint your house? The finders club would simply have people register their skills with the Finder's Club and we would hook you up.

Again, as an example, we found elder care for  a parent living in a distant city. It cost 50 dollars a month to have some one look  in upon them with a person living in that city, who made sure they were OK and took their meds, had contact with them regularly.

Thus a family bank has several services it can perform for family members. 

 
Details:

Any given family member, with some resources, can start a  bank with as little as 200 dollars.
All profits go to fund family projects. In Berkeley, each family of any size sub-divided the work into sub-committees to reduce time commitments.

Now with the internet, banking transactions among family members could be handled on a Family Bank website, or an existing one utilizing Pay Pal.

Much easier to do these days.

For a video on the idea click on the link below:
http://www.youtube.com/watch?v=5t5mlP0bjVQ

 
Here is more detail on how the FB would work:

It can be entirely an on line operation. There are many on-line banks in operation already. Don't need an office or advertising, just a way to deposit and transfer loan monies from or to an account for savings.

First an individual, like me for example, a Dad deposits money, in this case, say 5k dollars to an account which lives on my web site.

Individual B, say my daughter or son needs to quickly borrow 300 dollars. They can borrow the money however, only after joining the family bank paying say 10 or 15 dollars a month, that is depositing it (say via PayPal) or from their own bank in the Family Bank account having their name.

Once a member they become eligible for loans say after three payments or a total of 30 dollars.

They go to the web site, request the loan, and then the money, after approval, is transferred to their account at the Family Bank to their own bank or they could use the money to pay bills right there on the FB web site.

The money could be paid back on a flexible schedule but it must be paid back in order for the individual to be eligible for a new loan.

So with 30 family members the FB has 150 dollars plus 5,000 dollars on day one when it opens up on line plus, Dad's 5,000 dollars to start the account.

The interest rate on loans is zero interest, or a maximum of three percent.

The profits go back into the FB.

Now the money the FB has on deposit can really grow under the following scenarios:

Donations and grant money can be solicited, in connection with helping other families set up a similar FB, or for the Family Bank proper.

I, or a family member, rather than deposit my paycheck into Wells Fargo deposit into the FB. If several family members do this the FB could open with 10 or 15k in the accounts, usable for short term loans and emergencies.

Say that adds 5,000 extra dollars a month to the FB, money now available for loans.
The FB in the first example will have in one to three months over ten thousand available for loans, or the money could be put into a family investment account, or to help the poor in the family or whatever.

How do I pay my bills if the money is not in Wells Fargo Bank? The same way you do it now by transferring the funds online to your vendor on line.

If you don't want that hassle, this need could be a job for a family member, a stay at home mom, a job for a small fee could see that bills got paid. People don't know it but Visa and Master card will issue cards to individuals and organizations, not just to banks.

(Trust is a factor here, of course, and some family members might not be entrusted with the family finances.)

What if a borrower doesn't pay the loan back? Well then no more loans are issued until the money is paid back.

Emergency loans, funerals and such could be handled differently and more effectively.

Job leads, borrowing cars, adding a family member to insurance policies are ways of relating that save family members money and constitute a gigantic self help organization.

Family members would have to agree to serve on various family committees helping to make decisions on the various financial projects identified above.

Who needs money for college, how can the FB help?

The advantage of the FB is that the family instead of putting thousands of dollars each month into Wall Street Banks who then use our own money against us, we put the money into our own family banks and use that money for our own benefit and cut out the profit wall street banks take from us. This is thousands of dollars each year in interest we pay to banks who give us nothing in return.

We regain control of our own lives and our own money. And, did I mention that if a catastrophe hits like flood, earthquake and such, groups of family banks can make the difference helping each other with loans and support, housing and such without waiting for FEMA to show up.

And if enough families did this, say 100,000 families we could also bring wall street down and effect real change in this country. There is nothing that terrifies a banker more than the threat to take our money from their bank.

Moreover, in the case of something like the down payment on a house, the kids save thousands of dollars paid out to banks in interest, have a much lower mortgage, which they pay to the FB not wall street.

There is a Family Bank Board of Directors, whereby the kids can take over the bank and some can get a real paying job handling the bank, as the non-profit, or in the foundation side of things and thereby the families future is much more secure.

That is a quick summary of how it can work.

For a real education of how commercial and wall street banks really work to profit from taking your money click on the link below. 

Also see my blog on this site "Wall Street, the Banks, The Government"

http://www.youtube.com/watch?v=ArfPytAoeZ0&feature=related

Those interested in learning more can message me on this site or at my website: 

www.lonniehicks.com 

Chapter Twelve

In the last chapter we recommended that organizing a Family Bank is advisable. In this chapter we go to the next step which is organizing the committees mentioned in that chapter.

We want to detail “How to Organize Your Family.”

These Committees are essential to that organizational effort.

First this involves a once a week meeting for socializing, networking, and to help feed those that a good meal is a good thing.

It could be held in a local library or in a spare church meeting room where task one is to have each person write down their skills and tasks with which they are willing to help others.

This is a means to stay in contact with one another writing down emails, text numbers, useful for an eventual newsletter. This should be done at the very first meeting.
It is also a place to meet and greet, establish contacts and to catch up on what is happening in the family and in the committees and a place to arrange the once a month meetings detailed below.

The Education Committee:

The first committee to organize is the Education Committee whose task is to find the parents and names of school age children and what their particular needs are for the school year.
Those needs might be paper and pencil, a new laptop, or where to find a spare laptop at say the library, or who has one to loan.

This committee will ascertain what educational goals each child has written them down in a plan and what other resources will be needed to reach those goals.

 

Some will need on-going help, some will need help filling out applications, if they are at that point. Some might have discipline problems, and a harried mom might need help to go to school to talk to teachers and principals. Some might need a older family member to talk through school related problems.

The goal of the education committee 
is get our children through schools, get good grades and to go on to a career of their choice. Information is power and for our young people good advise is about how to get a debt free education utilizing the advise older folks in the family might be able to give.

Paying for high school or even college is a priority. The Education Committee might work with the Finance Committee to get money for high school or college for scholarships, soliciting tax free donations, or in-kind services, time share arrangements and other creative arrangements.
Some parents prefer to home school their children and band together, about 15 of them and hire a teacher, use a church basement, or someone's home and educate their kids that way, especially since charter schools, or school closings happened in their neighborhoods.

Education is a priority.

The Finance Committee:
It runs the Family Bank, granting loans, granting down payments in real estate, and other financial matters, including short term and long term loans. Tithing requests can make regular donations to this committee are a main task for this committee.

The Resources Committees:
It will organize itself as a non-profit seeking tax free donations, obtaining grants and help from foundations and maintaining the family mailing list and running the social media accounts, so as to stay in touch with those not living close by.
This group also seeks local credit in the form of local credit for essentials of life such as groceries, gas, clothing, utilizing the Family Bank's credit.

Family Businesses

This committee will explore what businesses family members can establish for themselves. There could be local business, with low barriers to entry, groceries, cleaning, maid service, janitorial, landscaping. Time banking, Finder's Club, Personnal Assistants, Temporary hiring, and other personnel services. and which need just small sums to get started.

These also serve as conduits to hire young people looking to started.

The Real Estate Committee:
This committee looks to set young people up for buying their own homes and the down payment, and to purchase homes such that older family members do not lose their independence to nursing homes.

More coming up in later chapters.