Paluwagan

PALUWAGAN - money lending and saving system in the philippines - common practice among friends and co-workers - informal form of saving and lending money - at least 3 people involved - in most cases, agreements dont require documentation or paperwork as members are often close to each other - algorithm: 1. set a schedule of payment (e.g. weekly, monthly) 2. all members throw in a fixed amount of money into a pool of funds at the payment schedule 3. each member takes turn at receiving the pool of funds at the payment schedule MUTUAL FUND, UITF - UITF: unit investment trust fund - similar to a paluwagan, pools together money from several individuals - each individual gets shares in the fund based on his contribution - fund manager invests pooled money in money market instruments, bonds or equities depending on the nature of the fund - this allows for potentially earning more as money market instruments bonds and equities can potentially earn more than what bank accounts can give - when you need the money, pay an exit fee to get the cash equivalent of   the mutual fund or UITF based on net asset value at such time - mutual fund: run by a mutual fund company - UITF: run by a bank
 * I've just thought of a great app name: "Loan Dolphin" :D