I’ve always had a tunnel vision idea of what stokvels are and what purpose they served. I imagined they were clubs formed by women who contribute money every month to use on occasions such as funerals, weddings etc. Although that is a part of it, stovels are in fact way more diverse than I thought.
An old friend of mine recently joined a stokvel and so we were discussing the purpose of these clubs and why he thinks they are beneficial. I realised then that a stokvel is basically a group of people who contribute fixed sums of money towards whatever goal they set out. There’s really no rule book besides the one created by the members themselves.
This same model can be used to invest. It could be in property, equity, commodities etc. As the old saying goes, “there is power in numbers”. For example, members can decide to jointly purchase holiday homes/apartments which they can rent out. They can buy dilapidated houses, renovate them and sell them or they can invest in stocks and share the dividends. This would require a lot more effort from all the members than in a conventional stokvel because its success will depend on the management and administration of not only the stokvel but also its assets. If done correctly, the rewards could be substantial in the long run.
It is also important to carefully select stokvel members. There needs to be a common vision amongst them so that the club can seamlessly move towards its gaol, and everyone would have to agree with and support its strategy. Because there is money involved, trust is also an important factor. The stokvel should consist of genuine, trustworthy individuals.
Now that I am more clued up on stokvels, I would love to join one (for investment purposes only). It is basically creating an empire with like minded individuals. Perhaps I should start one myself.