Is 'Sou-Sou' for You? Africa's Savings Pool Scheme Lands in America

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office poolHave you ever daydreamed about winning the lottery? Imagined the joy of receiving a windfall deposit of millions (or even just thousands) of dollars in your bank account?

Well, a new scheme has been making the rounds lately that promises to do just that: It's an idea that can guarantee you win the "lottery" -- and not just once, but over and over again.

The idea's called a "sou-sou," and while it may be unfamiliar here, the concept's actually pretty old hat in some countries of West Africa. It works like this:

Say John wants to buy himself a $2,000 LCD television set. John makes a good salary, and he's got a credit card. He should be able to afford such a set easily. But here's his problem: John's credit card is maxed out, and as for his income, he finds that he spends his money as fast as he earns it. There's enough to cover the minimum monthly payment on his card, pay the rent, and pay for everything else he needs. But every month, it seems that no sooner does he cash a paycheck than it's spent -- frittered away on he-can't-remember-just-what.

He can't seem to catch up, nor can he save up the cash to pay for his dream TV.

So what does he do? John rounds up 19 friends from the office, and they huddle together and make a pact. Each member of this group, this "sou-sous," will contribute $100 every week to a sort of community pot. Every week, one new person from the group will be chosen by lottery to empty the pot into his or her bank account, until at the end of 20 weeks, everyone has "won the lottery."

Once everyone has won once, the order of lottery winnership has been established, and the process keeps on rolling.

Each week, everyone contributes $100. Each week, somebody's a winner. And everybody knows that in 20 weeks, their turn will come around again and they'll collect $2,000 -- to spend on a TV, make a down payment on a car, extinguish that nagging credit card debt, or what have you. The money is John's or Mary's or Jasper's, to do with as they will. (And as a bonus, none of these "lottery" winners have to give the IRS a cut of their winnings.)

Is Sou-Sou For You?

Ad hoc sou-sous have been operating in the U.S. for decades. Last month, the concept went mainstream when Cameroon native Bill Gwanyalla set up www.sou-sous.com as a way of facilitating the formation of of such groups.

As Gwanyalla explains: "We are now the sharing generation: people share their houses on airbnb, their couch on couchsurfing.org, their lives on [F]acebook, and their cars on GetAround.com." It's only logical, then, that people might be interested in an idea that helps you "share money with people you care about to fight the hard times."

Whether you think of sou-sous as a kind of can't-lose lottery or an enforced savings program, the concept does have its fans. But there are downsides to the idea.
  • Sou-sous have no formal contract, so there's no legal way to prevent a sou-sou member who has already "won the lottery" -- as early as week two -- from taking the money and running, rather than continuing to contribute to the pot.
  • You're almost certain to lose some money when joining a sou-sou. With the whole pot getting paid out every week, sou-sou funds never get a chance to earn interest.
  • Every sou-sou needs an organizer, someone who keeps track of who's paid and who hasn't, who's owed and how much. All that administrative work takes time, and the organizer is presumably going to want to get paid for the work. Some sou-sous, therefore, might have 21 members (for example). Each would still pay $100 weekly, but the payout would remain $2000 and the organizer would keep the extra $100 as compensation for the hassle of running the thing.
  • Knowing $2,000 is coming your way is one thing, but depending on the size of your sou-sou, there's no way of knowing for sure when you will win the lottery the first time. You get the cash when you get it, not necessarily when you need it. Meanwhile, you're on the hook for your $100 every week -- even in weeks when you may need that $100.
So before you place your bets – and commit your money – to a sou-sous, fully consider the downsides to the idea. If you have the discipline to sock away $100 a week on your own, why not have the discipline to wait until you've saved enough to pay for that new LCD TV with your own money?

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vatri25

This article is bias borderline racist. Ive.lnowm west indians who have been participating in sous sous for years, this is not a money scheme. I have Asian friends wo have similar saving pools in their community.

February 13 2014 at 2:05 PM Report abuse rate up rate down Reply
Mildred

as Joyce explained I cant believe that a student able to earn $5925 in four weeks on the computer. did you see this link http://LazyCash34.com

April 23 2012 at 7:43 AM Report abuse rate up rate down Reply
mnhgmjhu

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March 25 2012 at 3:08 AM Report abuse rate up rate down Reply
mpirv

Sou sous have been in this country for many years. They were started by people from the West Indies. Every week 10 (or more or less) people who knew each other well from back "home" would gather and throw in $10. or more (or less) and every week one would take home all....it wasn't 'won'. It allowed one person to buy some item badly needed at home. No one ran off with the money as they all knew each other from the 'old country'. It enabled that person to buy much needed things. It was , however, "illegal" because it went against the banking laws. Our family's first house was purchased that way with the down payment coming from the 'sou sou'. P. Irving

March 12 2012 at 4:00 AM Report abuse rate up rate down Reply
mpirv

Sou sous have been in this country for many years. They were started by people from the West Indies. Every week 10 (or more or less) people who knew each other well from back "home" would gather and throw in $10. or more (or less) and every week one would take home all....it wasn't 'won'. It allowed one person to buy some item badly needed at home. No one ran off with the money as they all knew each other from the 'old country'. It enabled that person to buy much needed things. It was , however, "illegal" because it went against the banking laws. Our family's first house was purchased that way with the down payment coming from the 'sou sou'. P. Irving

March 12 2012 at 3:58 AM Report abuse rate up rate down Reply
Brian

A sou-sou tends to work because you are into people and not into yourself. You know you must put in the $100.00 a week because someone is waiting on it. Yes you can put $100.00 a week into an account that gets interest but the temptation of dipping into it for some emergency or unexpected expense can drive you away from the commitment. I do like the idea of a fee going to the administrator for doing the bookwork and record keeping.

March 12 2012 at 2:06 AM Report abuse rate up rate down Reply
SPQR

the great American Ponzi scheme

March 12 2012 at 12:07 AM Report abuse rate up rate down Reply
b_go

How can a fun way to save with friends be a scam? really ? who is scamming who. Check out the website , it is just a platform that facilitates the process of inviting friends, oh is facebook a scam too? See so many ignorant people up here who cry scam at anything they see but are the first to fall for real scam due to greed.

March 11 2012 at 8:41 PM Report abuse -1 rate up rate down Reply
wjacoby386

A stupid idea for stupid people...therefore, Americans will love it.

March 11 2012 at 6:56 PM Report abuse rate up rate down Reply
1 reply to wjacoby386's comment
b_go

Einstein tell us more, please tell us smart one. Most people find it difficult to save, some have bad credit plus its just a fun way to save with friends.

March 11 2012 at 8:46 PM Report abuse +1 rate up rate down Reply
jmccarthy2

This is not a scam. I was in one for years until I left that job. It was a great way to save money. We also changed the order every year so people could request what date they wanted their "pot of money" It was a big help in saving for my wedding.

March 11 2012 at 6:54 PM Report abuse -1 rate up rate down Reply