Tontines

[eadkins]

I thought surely you would mention the "Mash" episode where Colonel Potter was the last surviving member of a tontine of his WW I buddies. But since you didn't, I will.

[Musicat]

Not to mention the bad splice at the end of that MASH show where they cut to what is glaringly obviously another take, in another key, of the same song.

Sorry...the musician in me notices such things.

[XT]

Here's a link to the original article.

I always thought this was a cool idea. Apparently they are illegal though in a lot of places in the US, which is too bad.

-XT

[Musicat]

The original article only describes tontines that pay out during their lifetime, which reminds me of a Ponzi scheme in reverse. I don't see why there can't be a tontine that pays nothing until the last survivor is left (wasn't that the MASH one?), and short of encouraging the members to hack each other up wholesale , I don't know why that should be illegal.

[TSBG]

I'm surprised no one has yet mentioned the Flying Hellfish:

http://en.wikipedia.org/wiki/Raging_...ng_Hellfish%22

[Sal Ammoniac]

I've heard that tontines are still an important part of the economic landscape of West Africa. Where formal lending institutions are few, it's just about the only way a small entrepreneur can have access to capital. But my understanding is that the African tontines work on a somewhat different principle...

Okay, actually, I've just looked it up here. Apparently there are two kinds: the rotating and the accumulating. In the rotating kind, at every payment period, one of the members gets the whole amount, and the cycle will continue until every member has had a payout. In the accumulating kind, everyone ponies up at regular intervals, and the money collected is loaned out, at interest, to the members, or put into some investement -- and then when the members decide the time is right, the entire pot is split among the members.

And if I can editorialize, I wish we had more of these accumulating tontines right here in America, assuming they're not illegal. Stuff Bank of America, anyway.

[Elendil's Heir]

Previous threads:

http://boards.straightdope.com/sdmb/...d.php?t=623080
http://boards.straightdope.com/sdmb/...d.php?t=380732
http://boards.straightdope.com/sdmb/...d.php?t=261199

[Quercus]

Originally Posted by Sal Ammoniac

Apparently there are two kinds: the rotating and the accumulating. In the rotating kind, at every payment period, one of the members gets the whole amount, and the cycle will continue until every member has had a payout. In the accumulating kind, everyone ponies up at regular intervals, and the money collected is loaned out, at interest, to the members, or put into some investement -- and then when the members decide the time is right, the entire pot is split among the members.

And if I can editorialize, I wish we had more of these accumulating tontines right here in America, assuming they're not illegal. Stuff Bank of America, anyway.

The accumulating tontine sounds like a Credit Union to me. It takes deposits from members/owners, and invests those deposits (both in loans back to the Credit Union members and in outside investments). For the record, I agree that they're a great idea, but want to point out that they are indeed readily available in the U.S.

The great news is that since Credit Unions are generally much larger and more formally organized, you don't have to worry about running it yourself, or finding trustworthy people to start it with. With so many members, it's affordable to have professional management and risk protection.

[grude]

Originally Posted by Sal Ammoniac

I've heard that tontines are still an important part of the economic landscape of West Africa. Where formal lending institutions are few, it's just about the only way a small entrepreneur can have access to capital. But my understanding is that the African tontines work on a somewhat different principle...

Okay, actually, I've just looked it up here. Apparently there are two kinds: the rotating and the accumulating. In the rotating kind, at every payment period, one of the members gets the whole amount, and the cycle will continue until every member has had a payout. In the accumulating kind, everyone ponies up at regular intervals, and the money collected is loaned out, at interest, to the members, or put into some investement -- and then when the members decide the time is right, the entire pot is split among the members.

And if I can editorialize, I wish we had more of these accumulating tontines right here in America, assuming they're not illegal. Stuff Bank of America, anyway.

Its called a susu in Trinidad(she is running a susu), and the only variety I've personally seen is the one where all participants make small monthly payments and each member collects the whole pot on a revolving basis. You bet your ass fraud or people dropping out happens a lot.

[marmar]

A national tontine sounds like a great way to provide social security benefits.