[NAFEX] Life Time Membership

mangodance bmn at iglou.com
Fri Feb 15 17:08:48 EST 2008


Jwlehman at aol.com wrote:
> 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.

I like the concept...and have paid for life memberships over the years 
for most of my orgaizations.  However, I think the estimate of 12% would 
mean that we're in the risky category investment-wise.  I like the 
option of life memberships.  I think they're good for organizations as 
well as members.  However, I think investments should be risk-tempered 
when looking at organizational ownership.  We're fairly risk-tolerant 
and I'd take 12% all day long if I thought I could get it.  That said, I 
personally think $225 would be a little low to pay membership even in 
the short-term.  Thus, I'm not sure NAFEX would be served by that.  I do 
still see some 10-12 year life membership payments, but most 
organizations I belong to are in the 15-20 range.  You're correct 
though, if it were to happen, it would need to address cost issues and 
projections.  BTW, as an INGA lifetime member...it's good to see the 
organization strengthened by my commitment.



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