Accountability
MCWB (Middle Class Wealth Builders’) Club and its sponsor, MCWS (Middle Class Wealth Solutions) are private for-profit entities. Even though there is a profit motive, we believe that the interests of our club members (middle class folks) must always come first in a manner that is transparent.
For any and all projects we promote to our members (be it the acquisition of a business, or commercial property, or new real estate development), all funds that members plan to invest would be flowed through a trust agreement under the control of a reputable trustee and/or custodian – no exceptions. These will ensure that members’ funds earmarked for investment in specific projects only get invested in the specified project(s) in accordance with the terms and conditions of a binding trust agreement. The trust agreement of course would be written to reflect the terms and conditions of the project offering documents.
We will also do something that most private companies would not usually do – we would make our books (finances) open until some conditions are met***.
Because of our business model, which involves interfacing with a large number of clients (club members) located all over the world, every interface with our club members would be online (at least for now – it is possible that we consider other options down the line).
At this point, all our revenue is going to flow through PayPal – for members located in countries within the PayPal network. For intending club members who will be unable to pay through PayPal (because their countries are not in the PayPal network), we are trying to set up a merchant relationship with a credit card processor to allow them use their Visa or Mastercard to join the MCWB Club – when that merchant account is successfully set up, we would arrange for the same disclosure process that we are putting in place for PayPal.
We will use figures from our ‘Membership Cost’ web page to explain how we intend to use proceeds from membership subscriptions – since we expect members to take advantage of the 80% (EARLYBIRD PIONEER) discount coupon, we will be using the figures in red font that show the breakdown for that scenario. For members who may omit to use the 80% (or other best case) discount coupon at sign-up, we will be happy to process a refund to reflect the best available discount coupon as of the sign-up date. Also note that the proposed utilization of club membership proceeds is closely tied to our Refund Policy.
We expect proceeds of between USD20.96 (members outside Canada/US) to USD21.18 (US members) per member. Club Membership subscription proceeds (on a per member basis) will be disbursed as follows:
- Sums in excess of USD20 will be immediately transferred from PayPal to our (Middle Class Wealth Solutions OR MCWS) bank account – this will be primarily sales taxes plus USD0.96 – USD1.09 per member. MCWS is responsible for sales tax remittances to the appropriate government agency. The excess over and above USD20 (USD0.96-1.09) will also enable MCWS defray certain ongoing expenses. No further accounting will be provided to club members on the excess above USD20 (per member) subscription cost.
- The remaining balance of USD20 will be left in our (i.e. MCWS’) PayPal account for at least 7 calendar (not business) days. After 7 (or more) calendar days (from subscription), we will move USD5 from our PayPal account to our bank account. This USD5 (per member) is to cover some of our (MCWS) operational expenses and we will not be providing any further accounting to members as to what happens to the USD5 (per member) thus transferred. Note also that, based on our refund policy, refunds after 7 calendar days (from subscription date) cannot exceed USD15 per member. FULL refunds (with the possible exception of per transaction non-refundable gateway fee of US$0.30 for PayPal) are available up till 7 days after subscription – no questions asked.
- For the balance of USD15 per member, this will either remain in the PayPal account or be moved to a different (restricted) MCWS bank account – but there will be a FULL accounting of any spending from this USD15 per member balance at ALL times until either we switch to a Trust Agreement (and the trust agreement will provide for the same checks and balances as long as it is in effect) or we get to the point of renewal. After the first year, we believe there will be enough evidence to justify members’ confidence. By full accounting, we mean that if we spend USD1,000 for a consultation with a lawyer for example, we will publish the lawyer’s invoice in our members’ area – same thing applies for any other kind of spending. When we switch to a trust agreement, we will have to provide the invoice to the trustee before being reimbursed for the expense. For this USD15 per member balance, there will be no spending for at least 15 calendar days (after subscription) – this is in line with our refund policy which allows for a refund of USD15 per member from calendar days 8 – 15 (after subscription).
Why are we accounting for spending in this manner? Because we consider the MCWB Club to be a kind of economic activism on behalf of the middle class, even if it is being done on the platform of a profit making entity. In political activism, partisans volunteer their time and donate money to various political committees and parties – in most developed countries, there are disclosure rules that ensure that these activists have an idea of what their funds are being used for. We think that we should do something similar for our members, who in essence become middle class economic activists by joining the MCWB Club. We welcome your ideas on how we may improve our accountability guidelines but we believe our road map (outlined above) is a good starting point.
PayPal’s rates and fees are available online at this link under the ‘Pricing’ tab. The way it works is that all funds received on our behalf by PayPal remains in our PayPal account until we either transfer it to our bank account or we use it to make a PayPal payment to say, a vendor. So, for now, members would be able to track all incoming MCWB Club dues by reviewing MCWS’ PayPal account and/or any bank account to which the funds are transferred.
We commit to publishing this PayPal account details (in a restricted members’ area on our website – a corresponding email would also be sent out to members each time a new update is published) at least once every 2 weeks – possibly every week. This would allow club members to verify whether we are indeed appropriating the funds according to the terms set out above. In publishing our PayPal account details, we will redact (obscure and/or remove) sensitive information such as member name(s) or any other piece of information that would breach members’ privacy in any form or manner – the goal is for members to track the revenues and expenses of the club, not to violate the privacy of members.
*** As soon as possible, we intend to formalize the structure above into a Trust Agreement (the Trust Agreement would be published in our restricted members’ area on our website and remain there for as long as the agreement is in force) with a reputable trustee acceptable to a simple majority of members via on online vote – when that is in place, we would stop publishing our PayPal account details but the same rules will continue to govern withdrawal from the PayPal account until memberships are up for renewal. After the first year, the trust agreement will cease to be in force because members will have enough information to make an informed decision as to whether to renew their memberships or not. We consider ourselves to be under probation for the first year – the members will either make our hiring permanent or fire us after the first year (or at any renewal point in the future).
We have opted to not set up our Club memberships on an auto-renew basis – we would rather send a notice to members that it is time to renew their annual membership. Based on our performance during the first year, we believe that would be the moment of truth – if members are convinced that we delivered what we promised, we think they would be happy to renew otherwise they would simply part ways with us.