[HN Gopher] The Tontine Coffee-House (2018)
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The Tontine Coffee-House (2018)
Author : geox
Score : 41 points
Date : 2025-04-21 14:10 UTC (8 hours ago)
(HTM) web link (tontinecoffeehouse.com)
(TXT) w3m dump (tontinecoffeehouse.com)
| csense wrote:
| With regular life insurance, you bet you'll die.
|
| With a tontine, you bet you'll live.
|
| The latter seems much more sensible to me.
| rundmc wrote:
| As the founder of the first Tontine company in over 100 years,
| I cannot agree more.
| Biganon wrote:
| Surely you mean the first tontine out of Africa ?...
| rundmc wrote:
| Good point. I mean retirement tontines and tontine trust
| funds that pay members an income for life secured against
| hard assets rather than ROSCA tontines which are community
| savings vehicles designed for short term borrowing between
| members.
| LiquidSky wrote:
| >With a tontine, you bet you'll live.
|
| One problem is that everyone else in the tontine is betting you
| don't and sometimes are willing to act on that.
| rundmc wrote:
| In theory yes, but in practice, no such cases ever existed.
|
| A good example is that the collapse of Swiss Air created am
| accidental Tontine among its pension beneficiaries. Rather
| than trying to bump each other off, they meet up every year
| to hear to jointly toast the good news about their rising
| income: https://tontine.com/news/swissair-the-accidental-
| tontine/
| mrguyorama wrote:
| Life insurance isn't for you.
|
| Life insurance is for the Husband/Wife, Daughter, and Son you
| left behind to replace the income you used to support them with
| and pay for the (abhorrently and unethically expensive) process
| of putting you in the ground in most places.
|
| It's the lottery you don't ever want to win.
|
| Most people do lots of things that don't benefit themselves to
| the exclusion of all others.
| rda2 wrote:
| Before having children, I was quite interested in the idea of,
| and the math behind early retirement.
|
| Most of the interesting math happened at the margin: you've got
| just enough money that you could retire, but you're susceptible
| to risk of a market crash in the first few years of retirement or
| an abnormally long life expectancy combined with a middling
| market.
|
| Tontines fascinated me as an interesting piece of the puzzle for
| those who don't plan on leaving an inheritance, and I've reread
| this guide[0] a few times - but ultimately it's just another way
| to possibly move the margin a little bit, and the real solution
| is to save a little bit more, then spend a little bit less.
|
| [0]https://rpc.cfainstitute.org/sites/default/files/-/media/doc..
| .
| rundmc wrote:
| Ahead of the launch of the first Tontine company in over 100
| years, we have heard similar comments from many parents and for
| that reason have now created the Tontine Trust Fund.
|
| The regular Tontine Trust is for parents that want to avoid the
| risking of running out of money in old age and becoming a
| financial burden on their children.
|
| The Tontine Trust Fund is for parents that want to set aside an
| inheritance for their spouse or children now which they can
| configure to start paying the child a monthly income for the
| rest of their life starting at age X. This reduces the concern
| of parents that they will pass on a chunk of the inheritance to
| children that will 'blow the money' instead of making it last
| them for life.
|
| Also, FYI: a) Research from the insurance industry indicates
| that tontiners/annuitants spend double what they would without
| having a lifetime income, thereby enabling a better quality of
| life in retirement. b) The Swiss Federal Institute of
| Technology, alma mater of Einstein and 28 other Nobel Prize
| Winners, has produced research showing that a retirees pension
| wealth is enhanced by 87% with zero added risk upon moving
| their savings into a Tontine, indicating that the gain is not
| 'marginal'.
|
| All in all, the Tontine enables you to save a little less yet
| still spend more.
| rda2 wrote:
| Those rates and risks are meaningless without a baseline, as
| Einstein and 28 other Nobel Prize Winners may agree.
|
| If you're familiar with the early retirement community, the
| simplest strategy is withdrawing a fixed percentage of your
| initial retirement portfolio, adjusting for inflation every
| year. For an 100% equities portfolio, these are the odds of
| success over a 30 or 60 year horizon[0] when backtested
| against Shiller's total real return data from 1871-2018
|
| 4%/30 year: 97%
|
| 4%/60 year: 89%
|
| 3%/30 year: 100%
|
| 3%/60 year: 100%
|
| Hence my comment about spending a little less or saving more
| - 4% to 3% makes a massive difference in success rates. I'm
| sure you've done some backtesting of your offerings, and
| hopefully would be able to share some withdrawal amount vs
| success rate comparison, even if it's not an identical time
| period/comparison.
|
| [0]https://earlyretirementnow.com/2016/12/14/the-ultimate-
| guide...
| GlassOwAter wrote:
| Interesting read. I was only familiar with a bastardization that
| goes by the same name. An ex is from Liberia and while her mom
| now lives in the states she still sends money to contribute to a
| tontine.
|
| They pool their money together and then rotate who it all goes to
| every month or some pet period.
|
| Sounds like a scam run on the financially illiterate.
|
| https://www.modernghana.com/news/772009/tontine-microcredit-...
| rundmc wrote:
| There are versions of this 'ROSCA' Tontine in most countries
| and continents in the world. In the past when formed among
| strangers they have proven to be super susceptible to scams.
|
| Where they work is when each member of the group is known to
| each other and therefore would lose social status by defaulting
| on their obligations.
|
| The benefit of these arrangements when run properly is that
| instead of saving $10 per month and after a year having the
| $120 to buy a productive asset (let's say a cow), they can get
| the $120 up front from the Tontine and pay the money back to
| the community group out of the earnings from the milk etc.
|
| The persistance of these schemes everywhere indicates that this
| is a valuable means for the less well off to gain access to
| lump sum amounts for purchases without paying interest. Not
| everyone will be happy about the last part of course.
| mapt wrote:
| Tandas / ROSCAs are useful savings vehicles when it is, for
| whatever reason, difficult to hold on to money for very long.
| There's the physical version of this (The local warlord
| regularly mirks people for their wallets; Or maybe your
| government has something called 'civil asset forfeiture'),
| the social version ("The husband with shared access to my
| accounts drinks it all away!") but also the investment /
| monetary version where you have limited legal investment
| opportunities ('Peasants aren't allowed in the stock
| market'), or you have hyperinflation and so have to deal with
| the complication of a constantly shifting dollar. The money
| doesn't need to dwell any place for long periods of time,
| it's collected and distributed and then _spent_ on an
| expensive non-divisible improvement to your life immediately.
|
| I play a survival game called Rust. Progress is meted out
| through the slow accumulation of Scrap, which is spent on
| learning technologies. People constantly kill each other, and
| those who are ahead on tech tend to accrue advantages in
| combat. There is no "Bank", and no guarantee of the ability
| to set up a minimum viable base to store your resources. One
| of the most pathetic strategies to resort to on the busiest
| most crowded servers, when you're a few days behind, is to
| linger around the edges of a safe zone collecting small
| amounts of Scrap(dying every few minutes), literally play
| roulette with it at the in-game gambling system in the safe
| zone at 1:20 odds, and when you eventually win big, use your
| scrap to progress through the tech tree; It might be 1000
| scrap to get your tech to where it needs to be to compete,
| and you might average 50 (w/ Std dev of 25) scrap between
| deaths, but you'll get there eventually in this way, whereas
| the non-gambler needs incredible luck (+38 standard
| deviations of success) to actually progress through this high
| price threshold.
|
| A typical tanda removes the random chance element, but
| preserves the "Eventually you'll get there" element even
| while holding on to no money.
| mapt wrote:
| These are two very different systems. It's interesting that
| they ended up sharing a name in different locales.
|
| Usually "Tontine" is used for a retirement plan that people pay
| into, which distributes the dividends evenly among the
| surviving cohort of investors; The last survivor gets the whole
| pot of investment. They fell into disrepute in small part for
| having salacious incentives to murder each other as the number
| of survivors drops, but mostly for being in competition with
| life insurance, pension, mutual funds, and later tax-incentive-
| investment-account models that ended up being more favored by
| governments & finance.
|
| What you're describing is what I know as a 'tanda'.
|
| https://en.wikipedia.org/wiki/Rotating_savings_and_credit_as...
|
| https://en.wikipedia.org/wiki/Tanda_(informal_loan_club)
| skort wrote:
| What exactly is the scam? That someone isn't extracting
| profits?
| nanna wrote:
| The English stock exchange and insurance industry were also
| established in coffee houses, albeit in the century prior to the
| American.
|
| https://en.wikipedia.org/wiki/English_coffeehouses_in_the_17...
| roughly wrote:
| There's a long history of coffee as a social force - namely
| because the alternative was usually beer, and you can imagine
| the wild swing in a population going from beer to coffee as
| their recreational beverage of choice. Coffee's been implicated
| in the surge of "enlightenment" thinking, as well as the
| development of the financial industry (and, due to the former,
| also has a long history of catching the ire of kings and
| rulers.)
| wrs wrote:
| The endgame of a tontine can naturally result in confusion,
| intrigue, and/or murder. This was a basis of the plots of several
| novels, most famously R.L. Stevenson's _The Wrong Box_.
| rundmc wrote:
| Great entertainment although the Simpsons did the best
| fictional Tontine IMHO:https://tontine.com/videos/simpsons/
|
| That said, each Last Will & Testament creates the same scenario
| and (unlike in a Tontine) you typically know who you are in the
| Will alongside but this still doesn't seem to result in a spate
| of murder cases either.
| ggm wrote:
| Brilliantly filmed in 1966. Stellar cast. Captures the subdued
| eroticism of seeing victorian ladies ankles, lawks!
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