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Susu Money Pool - have you ever participated or heard of these?
Old 07-30-2007, 11:47 AM   #1
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Susu Money Pool - have you ever participated or heard of these?

I was perusing one of my cheapo living sites (obviously forgot which one) I stumble across while surfing online - and someone had mentioned a Susu...the principle is that a group of trusted individuals each contribute a set dollar amount per week or month. They take turns keeping the pot that week or month - and have a much larger pot to invest, buy groceries, etc.

Has anyone heard of these or participated?

The "search" option on this site is also causing me stress...advice on that would be appreciated too
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Old 07-30-2007, 01:33 PM   #2
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sounds like a commune?
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Old 07-30-2007, 02:08 PM   #3
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Susu.

(I guessed lucky with the spelling.)
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Old 07-30-2007, 02:26 PM   #4
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Its a simple zero interest forced savings plan.
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Old 07-30-2007, 02:37 PM   #5
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Not for me...
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Old 07-30-2007, 03:02 PM   #6
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Forced savings with no interest and the chance of having your money stolen before it gets to be your turn to collect? Susu = Social security?
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Old 07-30-2007, 04:01 PM   #7
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It really is fascinating how entreprenurial communities can be from a socialogical standpoint. I also find microfinance an interesting concept. Basically, instead of giving handouts to poor communities, you instead give them small targeted loans to create community-based businesses.
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Old 07-30-2007, 05:55 PM   #8
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In countries where banking systems are not sophisticated, this is a common method for people to save. For example it has been widely used in Mexico to save for house purchase.
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Old 07-30-2007, 06:45 PM   #9
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Originally Posted by Olav23 View Post
Basically, instead of giving handouts to poor communities, you instead give them small targeted loans to create community-based businesses.
Altruism aside, Business Week has noted that official interest rates in those communities can run in excess of 20%.

Screw the charity, there's profits in them thar hills!
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Old 07-30-2007, 06:48 PM   #10
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I am very familiar with Susu. It's widely used in developing countries and among some immigrants in the US from those countries. It works something like this:

Someone organizes the Susu and becomes the "banker". A set amount is collected for a set period of time from each participant and the payout or "hand" is given to a different participant each period until everyone has received an equal payout at which point the Susu ends. The "banker" is often given a small fee for her service by the partipant receiving the payout for that period (most bankers are women).

This is common practice that arose from necessity and the lack of developed banking systems. However, even in America, this practice continues to thrive among certain groups of immigrants mainly because it's part of their tradition.

This is a practice I would never recommend unless you can be absolutely certain that the participants can be trusted (not sure how you would know that). It's not uncommon for the "banker" to abscond with the money or for the participant to disappear after receiving their payment or "hand". In addition, you only benefit if you receive your payout earlier than later (time value of money). A better approach is to be disciplined enough to save up yourself for your big purchase. Some people swear by the practice because it's the only way they can save by being forced to pay into the Susu.
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Old 07-30-2007, 08:43 PM   #11
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I'm hereby starting the FIRE SUSU. Everyone send my $50. I'll tell you later by PM when your payout will be.

And send the bunny $2 just out of principle principal.






(the above is not intended to be a solicitation of funds. Past performance may not indicate future returns. If you have a SUSU lasting more than four hours, consult your financial advisor immediately)
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Old 07-30-2007, 09:16 PM   #12
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Geez and I was all ready to type that in!

I'll take dividends and/or interest. Principal is not required.
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Old 07-30-2007, 09:51 PM   #13
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Altruism aside, Business Week has noted that official interest rates in those communities can run in excess of 20%.

Screw the charity, there's profits in them thar hills!
Damn! What do they think they are?? venture capitalists?? Or mastercard?
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Old 07-30-2007, 09:53 PM   #14
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Altruism aside, Business Week has noted that official interest rates in those communities can run in excess of 20%.

Screw the charity, there's profits in them thar hills!
Other articles have mentioned that, before these organizations came along, interest rates could run closer to 100%. It's good to be a shark?
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Old 07-31-2007, 06:19 PM   #15
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They had a case like this on People's Court on tv with Judge Marilyn Milian, the redheaded judge. A lady, as I remember the case, had been in a susu, then developed cancer and died. The lady who ran the susu kept the money that the dead lady was to get, and her daughters were suing the crooked susu lady. Very interesting case. Of course, the daughters won and the crooked susu lady looked appropriately guilty and apologetic for taking advantage of the situation, since, supposedly, she was the dead ladies' best friend. Of course, all I could think was, "what a pig!"
First time I ever heard of the susu, but I gathered it is very popular in Latino communities. Milian, I know from watching, is a proud Cuban herself.
It is simply a forced way of saving. Guess I would be into it, too, if I couldn't trust the banks here.
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Old 07-31-2007, 06:54 PM   #16
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Originally Posted by Letj View Post
I am very familiar with Susu. It's widely used in developing countries and among some immigrants in the US from those countries. It works something like this:

Someone organizes the Susu and becomes the "banker". A set amount is collected for a set period of time from each participant and the payout or "hand" is given to a different participant each period until everyone has received an equal payout at which point the Susu ends. The "banker" is often given a small fee for her service by the partipant receiving the payout for that period (most bankers are women).

This is common practice that arose from necessity and the lack of developed banking systems. However, even in America, this practice continues to thrive among certain groups of immigrants mainly because it's part of their tradition.

This is a practice I would never recommend unless you can be absolutely certain that the participants can be trusted (not sure how you would know that). It's not uncommon for the "banker" to abscond with the money or for the participant to disappear after receiving their payment or "hand". In addition, you only benefit if you receive your payout earlier than later (time value of money). A better approach is to be disciplined enough to save up yourself for your big purchase. Some people swear by the practice because it's the only way they can save by being forced to pay into the Susu.
This is interesting to me as it shows how creative some cultures are and how well thier creativity works in our society..........

My grandparents lived in an older inner city neighborhood with lots of "haves" and "have-nots" living side-by-side. The old "corner store" there had seen a long string of short-term owners over the years since the the folks that ran it when I was a child departed. Awhile back a Korean family took over and it became a viable resource to the neighborhood again. I spoke with the head of the household once and told him how we appreciated having a decent place to buy convenience items. I attributed most of thier success to being family run.....mom, pop, two teenagers. He explained that it was also because of thier obligation to thier lottery club: There were TEN families in the lottery club. When they had saved enough to buy a property, his family "won" the lottery and got to purchase and run the store, but they were still obligated until all ten families had purchased a business.
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Old 07-31-2007, 07:13 PM   #17
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This is interesting to me as it shows how creative some cultures are and how well thier creativity works in our society..........

My grandparents lived in an older inner city neighborhood with lots of "haves" and "have-nots" living side-by-side. The old "corner store" there had seen a long string of short-term owners over the years since the the folks that ran it when I was a child departed. Awhile back a Korean family took over and it became a viable resource to the neighborhood again. I spoke with the head of the household once and told him how we appreciated having a decent place to buy convenience items. I attributed most of thier success to being family run.....mom, pop, two teenagers. He explained that it was also because of thier obligation to thier lottery club: There were TEN families in the lottery club. When they had saved enough to buy a property, his family "won" the lottery and got to purchase and run the store, but they were still obligated until all ten families had purchased a business.
This practice you describe is very common among Asians, especially Koreans. It is for this very reason why you see some many small neighborhood business operated by Asian. They are funded through this informal system of pooling money and taking turns at receiving payouts. Their dry cleaners and vegetables stores can be found all over NYC, especially the inner city. I think that they are driven to own small businesses primarily because of the language barrier. It's not uncommon to go into a Korean grocery store and find that everyone in there is related and only the younger ones speak English.
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Old 08-01-2007, 09:22 AM   #18
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Do I have this right? You give someone money, and they give you your money back later? Huh?

On second thought, it is actually very common in the US. I know plenty of people that look forward to a big tax refund in April. Give the feds your money each paycheck, they keep it interest free, and then you fill out a form to get your money back later.

-ERD50
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Old 08-01-2007, 09:33 AM   #19
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Good point and well taken, ERD50, about the April tax refund. Thanks for pointing it out!
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Old 08-01-2007, 09:43 AM   #20
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Interesting feedback. I actually found someone in person who had participated in a SuSu (coincidentally, she is of Carribbean ancestry) - she did it with family member and a couple close friends. (She also was the "banker") Still undecided if something of interest personally...(I'd be the "banker" tho')
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