What Exactly Do You Get from the Commune? A Purely Economic View

Some members complain that they have paid money, helped others, and received nothing themselves.

Let us set sentiment aside and explain it purely in economic terms.

You spend money in the Commune and in return obtain a possibility — a possibility similar in nature to an "option" in finance.

An option is a possibility, a right of choice, and it can be priced. Take an example: you want to buy a house for one million yuan but have no money at hand, so you negotiate with the seller to pay in three months. The seller agrees but worries you will not buy after three months, so you say you will give him 10,000 yuan first: if by then you do not buy or cannot pay, the seller keeps the 10,000 yuan and you lose it. That 10,000 yuan is the price of your option to buy the house — an option price.

What the Commune provides is in fact also a kind of option, except that we have set the conditions for exercising it in advance: serious illness, death and so on. The price of that option is the money you continually contribute in the Commune.

Every option may have very many variables, and each variable affects the price. For example, an option that pays out only before age 60 and one that pays out before age 70 have different prices; the latter may be much more expensive than the former.

What is good about KangAi Commune is that these variables are not calculated in advance to quote you a price, but are determined by the contributions actually made — the most real price, with very little added cost.