Equity Financing of Your Life

Right now, you can get into debt (mortgage, credit, personal, etc) by signing contracts that require you to pay back fixed amounts every year, on threat of interest or eventual bankruptcy. If as a lender one imagines the individual as an investment, this is like a company that cannot raise equity but has unlimited recourse to the bond market, often the junk bond market.

As a young person, you're underwater until you can pay off the debt. Like a highly indebted company, there's a fundamental fragility to your position: since you have largely fixed costs, if you lose revenue even briefly, you risk financial ruin. You are necessarily risk-averse: you can't afford not to be making as much revenue as possible constantly, even if you could ultimately do better by spending time and money on development or long-shot ventures.

In business, this is a solved problem. A "young" business typically does not raise money from debt, because they don't have the revenue yet and they don't want to limit growth by narrowly focusing on debt-servicing profitability before achieving market dominance. Their investors want them to succeed, and burdening them with debt is actually counterproductive to that goal.

So instead, investors and startups raise money through stocks and options. That way, if they succeed, the investors make more than they ever could in interest, while a loss doesn't have to mean a default.

I should be able to invest in the careers of my most promising friends.

There should be a market for doctor's salaries. Rather than getting into debt, doctors should be able to sell a tax-like proportion of their future income.

Commune education fund could work the same way. The commune will offer to pay for its members' college in exchange for a variable share of their future income (possibly with a time limit) based on how promising a student they are and how lucrative the field they want to study.

It is significantly less intrusive and less anxiety-inducing than debt. If you're making bank, you should pay back more, and if you are unemployed, you should not have to pay anything. It ideally aligns investors' incentives with your own incentives (see Incentivism).