Stokvels in South Africa) a savings or investment society to which members regularly contribute an agreed amount and from which they receive a lump sum payment

Stokvels are invitation-only clubs of twelve or more people serving as rotating credit unions or saving schemes in South Africa where members contribute fixed sums of money to a central fund on a weekly, fortnightly or monthly basis. The name “stokvel” originated from the term “stock fair  s”, as the rotating cattle auctions of English settlers in the Eastern Cape during the early 19th century were known.^[

Stokvels generally have a constitutionwhich dictates the size of the contributions, when the accumulated money is to be paid out and the roles and responsibilities of the members. After a savings period dictated by this document it could be specified that each month a different member receives all or some of the money in the fund, which was collected during that period. Defaults on contribution are quite rare as other members will know if you haven’t paid your contribution, and also because the regular meetings are a reminder of what you will gain when it is your turn. Depending on the type of stokvels, the members can use the collected fund for their own use, for payment or investment purposes.

It is estimated that one in every two black adult South Africans is a member of at least one of 800 000 stokvels. Black adult South Africans invest approximately R50 billion in stokvels a year.

A credit union is a member-owned financial cooperative, controlled by its members and operated on the principle of people helping people, providing its members credit at competitive rates as well as other financial services.^[1][2]

Worldwide, credit union systems vary significantly in terms of total assets and average institution asset size, ranging from volunteer operations with a handful of members to institutions with assets worth several billion U.S. dollars and hundreds of thousands of members.^[3] Credit unions operate alongside other mutuals and cooperatives engaging in cooperative banking, such as building societies.

"Natural-person credit unions" (also called "retail credit unions" or "consumer credit unions") serve individuals, as distinguished from "corporate credit unions", which serve other credit unions.^[4][5][6]

Credit unions in the US had one-fifth the failure rate of other banks during the financial crisis of 2007–2008^[7] and more than doubled lending to small businesses between 2008 and 2016, from $30 billion to $60 billion, while lending to small businesses overall during the same period declined by around $100 billion.^[8] Public trust in credit unions stands at 60%, compared to 30% for big banks.^[9] Furthermore, small businesses are eighty percent less likely to be dissatisfied with a credit union than with a big bank.^[10]

“Poor people see a dollar as a dollar to trade for something they want right now. Rich people see every dollar as a ‘seed’ that can be planted to earn a hundred more dollars … then replanted to earn a thousand more dollars.”

T. Harv Eker, Secrets of the Millionaire Mind 

Saving and investing often are used interchangeably, but there is a difference.

• Saving is setting aside money you don’t spend now for emergencies or for a future purchase. It’s money you want to be able to access quickly, with little or no risk, and with the least amount of taxes. Financial institutions offer a number of different savings options. 
• Investing is buying assets such as stocks, bonds, mutual funds or real estate with the expectation that your investment will make money for you. Investments usually are selected to achieve long-term goals. Generally speaking, investments can be categorized as income investments or growth investments.

Making a choice between either saving or investing will depend on your goal(s) for the money and your risk 

SET SPECIFIC GOALS

What are you saving for? How much money is needed, and by when? These are all important questions to ans6wer when setting good financial goals, and ignoring them is a big mistake.

Why  Stokvel Savings  for a Goal is better than a single bank saings account

For instance, putting all savings into one account isn’t a good idea. Since those funds aren’t earmarked for a particular purpose, it’s easy to just dip into them for any reason: enyertainment, moving, unplanned purchases on a credit card etc. As a result, the savings will be depleted as quickly as they are built up! A Stokvel Savings however you stay comiied because buddy member is also committed!

Stokvels, ere great for those who struggle to willingly set money aside into a savings account by joining a Stokvel regular savings is ensured and savings goal is reached!

Savings accounts that are with traditional banks likely provide low interst income because of overhead cost.

Since Stokvel Societoes don’t have to deal with the overhead costs of managing brick and mortar branches, they are able to offer much higher interest rates than traditional banks.

In order to qualify for this top-tier savings rate, customers need to either maintain a certain balance whereas Stovels not only recieve  yoour  deposit into the account every month but also those  your budd . This should be fairly easy to see that such joint larger amounts get better hinterest rates at lower cost.

This may seem like a trivial difference at first, especially for people who are just starting out and who don’t have much saved. But those interest payments add up quickly. It is possible to make R100-plus more per year with an Stokvel Society  than with a brick and mortar bank.

LEAVE EMEGENCY FUND SAvINGS IN A STOKVEL 

This  is crucial to reaching a emergency fund savings goal.

As previously mentiond most people traditionally lump all savings together and take money out whenever they find a use for it. But when setting savings goals, Stokvel Societis offer the oportunity to not only separate your emergency funds from money that is being saved for individual goals like Christmas, vacation, and other individual payments,  but also allow members in times of  a real emergency to utilise the credit union option of low interest  member loans This could be a complete game changer.as it does not affect your savings towards the goal at all but you still receive all the benefits that accrue to you  due to the saving.

A Stokvel will help break bad habits like mentioned above

by making  money slightly more inaccessible, move the family’s emergency fund savings  to a separate Sokvel Society account. Having those savings at a different place than a bank means that you can’t simply log into a bank app and  transfer money straight from the  emergeny fund savings account to the checking account and have it immediately available.

MAKE A HABIT OF PAYING YOUR FUTURE SELF FIRST

Speaking of habits, it’s a common saying to “pay yourself first.” Many people think that means to treat yourself first: set aside money for shopping, eating out, etc.

But that’s pretty much the opposite of what that advice means. The idea is to pay your future self first or, in other words, set aside savings in a savings vehicle like a Stokvel  before figuring out the rest of a budget.

But that’s often easier said than done.

David Bach, the author of The Automatic Millionaire, became a millionaire by age 30. His secret? Automate savings a Stokvel is a perfect way of doindjust that!

He also advocated  to increase contributions over timeand again a Stokvel is ideal for doing this and it can be stipulated in the Constitution. With this process, money will leave your account before you have a chance to touch it.

Stokvels Societies like GROGOLD offers an additional incentive to reward good savings habits. Through the Savings Builder GROGOLD  Sokvel Society, you earn the benefits of  highest offered interest rate by depositing at least R100 into a Society Stokvel account every month.

To do so, let GROGOLD set up an new Stokvel for you  as part of the GROGOLD Group Society of Stockvels

Ready, Set, Save!

Most people aren’t taught how to “do” money when they are young. They grow older, make mistakes, hopefully learn from them, and use those lessons to build better money habits.

But it is possible to skip a few steps by learning from other people’s mistakes.

Here are some hard-earned lessons that can help do just that: Create a plan for your money, set clear goals, maximize interest with a high-yield savings  by starting or joining a StokveSociety account with a , separate emergency savings from short-term savings goals (and leave them alone), and pay your [future] self first.

Change typically doesn’t happen overnight. But by following the steps outlined here, you will hit your savings goals in no time with your own Golden Goose that will keep on Laying Golden Eggs fot you!

The Rule of 72

One quick way to estimate your potential return is to use the Rule of 72. Just divide 72 by the expected annual rate of return to get the number of years it will take your money to double in value. For example, if your investment is expected to grow by 9 percent annually: 72 ÷ 9 = 8. Your investment will double in approximately eight years

Note that even though the rate is 10 percent, you are not dividing by 0.10 as you would in other percentage calculations. You are using the whole number.

The Rule of 72 works fairly well for the range from six to 10. Outside that range, there are additional calculations needed; it can be more efficient to use an online calculator.