[NAFEX] Life Time Membership

Jwlehman at aol.com Jwlehman at aol.com
Fri Feb 15 16:55:05 EST 2008


In a message dated 2/15/2008 2:06:22 PM Eastern Standard Time, bmn at iglou.com 
writes:

> I know one board member who would write the check this month....oh...and 
> on the concept of life membrship, you have a vote here.  I'm not sure 
> about the figure...how was it calculated?
> _______________________________________________

Because the only way an LTM program will work successfully is if the entire 
amount is invested and the investment returns pay the membership annually. It 
must also grow in value as well to cover future membership price increases. 
Because it is a permanent (long term) investment higher paying mutual funds with 
higher volatility can be used. We don't care what the value is as long as the 
proceeds pay the membership fee. There are many that have 10 year annualized 
averages of 12 and 14%. So $225 invested in one that averages 12% has an 
average return of $27. Nineteen of this goes to pay the membership fee leaving a 
safety margin of $8 in the investment for growth. That is how I came up with 
$225.  $200 would work, but with a smaller safety margin. 

After many years when some lifers pass on their investment could be 
transferred to the Research Endowment fund. Indiana Nut Growers LTM has grown by 50% 
per LTM. Program has been in operation maybe 12 years. Very successful.

Jerry


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