Pooling Money: Long History of Shared Benefits

Pooling Money: Long History of Shared Benefits

In today's digital age, individualism often takes center stage, especially when discussing financial strategies. However, an age-old principle that holds incredible power is the concept of group savings. Throughout history, we see examples of communities and friends who pooled their resources, not only to meet money goals but also to foster unity. The act of coming together to save together has immense benefits.

1. Achieving Common Money Goals:

Group savings enable communities to reach financial objectives that might be challenging for an individual saver.

Historical Example: The barn raising among the Amish. With each person contributing, a significant savings goal is achieved in a short span. This group save method ensures operational barns without the staggering costs if done alone.

2. Providing Security and Social Money Safety Nets:

When savers come together, the pooled social money acts as a safety net, ensuring every member gets support during challenging times.

Historical Example: The "susu" in Africa—a form of group savings where members contribute to a pot that goes to one member in rotation. An interest-free system, it provides a savings boost to members when most needed.

3. Diversification of Investment:

Shared savings enable diversification, allowing the group to spread risk across investments and boost potential returns.

Historical Example: The joint-stock companies of yore. Investors used group money to fund voyages, spreading the risk. This shared saver approach ensured that successful voyages offset potential losses.

4. Empowerment and Collective Bargaining with Pay Mates:

With group pay, communities wield more bargaining power. Pooling resources, whether you pay friends or contribute to a community pot, ensures better deals.

Historical Example: Workers' cooperatives during the Industrial Revolution. Producers and workers united their savings to gain leverage or to bypass middlemen. This group payment system increased their collective power.

5. Strengthening Community Bonds and Automate Savings:

Sharing financial resources and using mechanisms to automate savings nurtures trust and mutual responsibility.

Historical Example: The "hawala" system in South Asia. This group save method allowed individuals to send and receive money without formal banks, emphasizing the strength of trust and community ties.

Conclusion:

The power of group savings is evident from our history. Pooling resources, whether to save together, achieve mutual savings goals, or to group pay, brings about economic benefits and strengthens ties. Embracing these principles, especially in an age where automate savings and digital solutions are available, can lead to more resilient communities and successful savers.

The information contained on this web site is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.