Thread: Tontines
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Old 03-21-2012, 03:13 PM
Quercus Quercus is offline
Join Date: Dec 2000
Location: temperate forest
Posts: 6,876
Originally Posted by Sal Ammoniac View Post
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.