DailyDirt: Saving For A Rainy Day
from the urls-we-dig-up dept
Physical cash seems to be a bit less popular than it once was. Some European countries are even contemplating completely digital currencies to combat the potential side effects of negative interest rates (i.e. people taking out all of their savings as cash). At the same time, Bitcoin and other cryptocurrencies could provide other means of payments without dealing with physical cash. So are we ready for a cashless society? (No, probably not for some time.) However, digital currencies could take away the importance of centralized banking, bit by bit. Perhaps some older forms of savings will make a comeback.
- A sou-sou is a kind of informal savings club where a small group of people agree to contribute cash regularly and distribute lump sums on a schedule. This kind of arrangement is not uncommon for immigrants or people who can’t build credit with centralized banking systems. [url]
- Lending circles or Rotating Savings and Credit Associations (ROSCAs) is the academic term for a savings club like a sou-sou. Related savings vehicles are also called a huay, tanda or chit fund — and some organizations are helping to document the transactions of these informal groups so that more formal credit histories can be established. [url]
- The tontine is an old kind of retirement fund (or financing scheme, actually) that was much more popular over 100 years ago. People would contribute money to a tontine with many other investors, get regular distributions… and each member’s distributed share would increase as members died off (hopefully due to old age), so the longer you lived, the more you could profit. A new kind of tontine could be revived to replace the pensions and annuities that people nowadays don’t seem to be participating in. [url]
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Filed Under: alternative banking, annuity, banking, bitcoin, cash, chit fund, credit history, cryptocurrency, financing schemes, huay, investing, lending circle, p2p lending, retirement fund, rosca, rotating savings and credit associations, savings club, sou-sou, tan
Comments on “DailyDirt: Saving For A Rainy Day”
know your customer! Anti money laundering!
Re: What a quaint article.
know your customer! Anti money laundering!
Yeah, these kinds of things have pretty much been outlawed these days.
Re: Re: What a quaint article.
Yup, laundering money for the drug cartels is illegal but if you are a huge bank then it is A-OK and the DOJ will look the other way.
But yeah, it’s “illegal”.
Historically most tontines were just clever scams, and in some cases were banned because it provides the members with a strong — in practice, too strong — desire to see the other members die before you do.
Even The Simpsons got in on this: the episode “Raging Abe Simpson and His Grumbling Grandson in ‘The Curse of the Flying Hellfish'” from season 7 featured a tontine in which Abe Simpson and Mr. Burns were the last two surviving members. Naturally Burns sent an assassin after Abe.
or you can make an offshore foundation with the mission:
“to secure continuous improvement, development, expansion well being of the YOURSURNAME family concept”
like everybody else does:
https://en.wikipedia.org/wiki/List_of_wealthiest_charitable_foundations
When a majority of people do not earn enough to live above poverty, one might assume they are not saving much.