I got talking to someone close to me, a Taiwanese person, and they thought I should invest some money in the same scheme they have. This is what she told me:
She has previously invested 100,000NTD in bank funds here in Taiwan which gave her a return of 20,000NTD after a mandatory investment fund of six months. She mentions the Interest rate on these funds as being something like 1.3 or 1.5.
I don’t know what kind of funds these are, because she wasn’t sure how to explain it to me: all she knows is she gave a bank 100,000NTD (minimum investment) and six months later got back 120,000NTD.
I am far from savvy at financial matters, but I can’t quite make sense of this: I would have thought a return of 1.3 or 1.5 on 100,000NTD, after six months, would be a lot less than 20,000. More like 1,300.
It’s also quite possible I just can’t do my sums and she’s correct.
She mentioned a couple of banks in particular who run these high-interest schemes - KGI, and Standard Charter, although apparently the latter don’t do these schemes any more.
Does anyone know anything about these funds, or even what they’re called?
I consider myself smart, but when it comes to some very basic maths and arithmetic it might as well be Swahili.
Consider that she misunderstood the interest rate and it’s actually a much higher figure. The question remains: are there Taiwanese banks offering such high returns, and guaranteed returns?
I think this is a very traditional form of finance in Taiwan , village financing . I can’t recall the name but if you ask almost any Taiwanese family they will tell you how they eventually lost money on it.
Basically it pays out to each member in turn, but of course eventually somebody runs off with the pot and the whole thing collapses.
No bank I know of would offer this though. Sounds like she’s bullshitting to me.
I’ve seen these types of plans before. Local banks do them from time to time when they want to raise funds quickly. The stated rate is probably monthly, not annual. I know people who have put their money in these, and while I was skeptical, they did end up getting their money back with interest.
Thank you Gentlemen. After further enquiry I discover that this person, while close to me, is even more financially illiterate than I am, and believe me, that takes some doing.
I literally typed ‘what is 1.3% of 100,000’ into Google, then carried my laptop over to her and showed her the result on the screen because just telling her wasn’t cutting it. She stared at it for a solid minute until it finally sank in.
There was one weak attempt at suggesting Google might be wrong, but then she gave up.
Thus end months of haranguing about how I’m wasting my money just sitting in my account doing nothing when I could be making SO MUCH MONEY that never existed in the first place.
I’d thought it was just a language barrier. No, it’s not that at all.
I had this explained to me once. I seem to recall that a group of people each chuck a couple of hundred thousand into a pot. If one of them then needs their money they have to pay a fee before they get their cash back. Over time more people withdraw. At the end of whatever the investment time period is the remaining money is split between whoever hasn’t withdrawn. Obviously the total is going to be more because of all the withdrawal fees. I suppose it could work through a bank, but seems highly irregular.
I remember it’s got a strange name like Mouse Meeting or something.
You’re right. It isn’t. I have some invested in an ISA account back in the UK that gives a slightly higher rate of interest, but that’s it.
Despite my relative lack of financial acumen, I do have savings, and do sometimes make enquiries regarding opportunities to put that money to work. Unfortunately, these either require that money being locked away for literally decades, which I simply can’t afford to do, or require a level of risk I feel uncomfortable with being, by nature, a highly risk-averse person.
My one current investment is my apartment back in the UK, which is rented out, and has slightly under ten years to conclude its mortgage payments. The rent just about covers the mortgage payments.
If you want to educate me about what I should be doing with my money, feel free.
It’s a highly risky thing (not always though), I’ve knowledge of these money games where the one keeping the money just ran off with it, and that’s mostly done among friends and acquaintances, go figure.
Yeah, often this is a classmate thing, the idea is to provide seed money for people to start up businesses. Often enough some guy will just take the pot and run and since there’s no paperwork involved nothing can be done except uninvite him to next month’s potluck.