X-Message-Number: 21292
Date: Wed, 26 Feb 2003 22:21:57 -0700
Subject: Hello Cryonet Members
From: Taylor Selden <>

Hello from your newest member.  Allow me to introduce myself.  My name is
Taylor, I'm 23 and live in Arizona.  I just sent off my insurance papers to
Alcor today and have finished all my membership requirements.  So, when
Alcor publishes their next membership figures, you'll see it go up by at
least 1.

Now that I'm done with the pleasantries, I'd like to open a serious
discussion on what I believe to be a fundamental flaw with Alcor's pricing.
Although this isn't so much of an issue for older people, I'd like to just
throw out a reality check for any of the young people on this list:

*** Life Insurance Won't Pay For Cryo-Transport ***

When one factors inflation into the equation, Cryo-Transport prices must go
up, therefore seriously negating the value of life insurance policies
purchased today.

In the United States, inflation has averaged 3.49% annually since 1913.
Assuming that continues over the long term, someone (like myself) who can
expect to die 60 years after the purchase of life insurance will face a
significant problem.  The cost of cryo-transport will have inevitably gone
way up.  In fact, whole-body suspension (what I chose) should cost about
$940,000 in 2063, assuming the cost of suspension rises symmetrically with
inflation.  

I discussed this problem with Jennifer Chapman, the membership coordinator
at Alcor.  She explained to me that the increased membership costs will be
borne by future Alcor members and that current members will "lock in" their
rate by signing-up today.  I can't help but disagree with what she told me
-- my better sense kicking in.

Any scheme that promises the same benefits to everyone, yet must cover the
costs of early members with the funds of later members will inevitably fall
apart.  In the United States we call this a Ponzi Scheme, named after
Charles Ponzi who promoted just such a scheme in the 1920s.

In my opinion, Alcor should take the lead in this area and start being
honest with younger members.  Instead of simply recommending an outright
purchase of life insurance, a recommendation should be made for the purchase
of term life and the proper investment of additional funds.  Members should
be told that costs will go up and that they need to plan for future cost
increases today.

I, personally, am putting away $50 per month in low-cost passively managed
index funds that I fully expect to earn at least 4% after inflation.
Assuming I continue until my death at age 83, I'll have about $150,000 in
inflation-adjusted dollars saved up -- enough to pay the future cost of
Alcor suspension.

One option would be for Alcor to simply collect this fee from members and
invest the money itself on the behalf of members -- protecting members from
making investment mistakes and choosing overly aggressive/high cost funds
for the money they'll need to pay for cryo-transport.

What they SHOULDN'T do is tell young members that future cost increases will
be borne by future members -- this certainly doesn't inspire confidence in
an organization that is expects to be around for hundreds (if not thousands)
of years.

I know some of you are going to ask... Why pick Alcor if you have all these
problems with how they manage their financial operations?  That's a good
question and one that deserves an answer, since I'm being so critical of
Alcor.  There simply is no better alternative out there...

Anyone who believes a for-profit organization will revive them in the future
is simply off their rocker.  Anyone who thinks a low-cost provider will have
the necessary capital to not only preserve their bodies for the long term,
but also pay for the future revival is also making a dangerous gamble.  So,
while I do believe Alcor needs some changes, I also believe it is the best
option for today.  Who knows 40 years from now...  Some other organization
might emerge and surpass Alcor.  Since we don't pay for cryonics until we
die, we all have the ability and the responsibility to be vigilant and
closely monitor the cryonics organizations.  We can always change our minds
and change to one that we believe will be better for the long-term in the
future.

In any case, I hope to get to know everyone better over the next few months
and I'm happy to be a new member to both Alcor and to this list.

Regards,

Taylor Selden

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