Low-Risk Investing for All

Finding Money for Life after Covid19

Covid19 gives Australians an opportunity to move the financing of new and existing housing into the hands of occupiers via home funding cooperatives. The reason now is an opportune time is that the government will need to stimulate the economy by increasing the money supply. All government in Australia, quite rightly, do not want to go into excessive debt. They want Australian money used to develop industry and jobs in Australia and they would like to keep local ownership of the infrastructure.

Prepayments Compared to Equity and Loans

Prepayments are not the same as equity but have similarities. With prepayments, the capital value cannot be removed from a cooperative unless someone lives in a dwelling and pays to live there. The prepayment could be for a day or it could be for 50 years. Prepaying reduces risk and moves what risk there is to all the properties in a cooperative. In return for the reduced risk, prepayments cannot be moved from the cooperative unless another member purchases them.

Prepayments Enhance the Market Economy

Prepayments leave the market system intact. The housing market becomes more competitive. It means prices in the housing market is determined by the desirability of the dwelling as a place to live. Using risk capital means prices tend to reflect how much buyers can borrow and it means those with access to loans have an advantage over those who don’t. The housing market becomes a surrogate money market.

Organisational Structures to Implement Prepayments

With complex human systems, form follows function and vice versa. This means it is best to use an organisational structure to reflect the operation of prepayments.


Australia needs investment in productive businesses to restart the economy. Investment money typically comes from loans on money generated by the banks. By occupiers of homes banding together in not-for-profit cooperatives homes can be refinanced using low-risk and hence low-cost prepayments. Refinancing plus generating prepayments on existing homes without loans frees up loan funds that banks can lend for productive businesses. Some of those businesses — like education, electricity, water, roads, railways, and health can also use low-cost prepayments supplied by banks.



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