WEALTH CREATION FOR MARSHALANS THROUGH THE MARSHALAN SECURITY TRUST

UNDERSTANDING THE MARSHALAN SECURITY TRUST (MST)

The Supreme Council in their wisdom instituted the Marshalan Security Trust (MST) as a collective investment scheme for all Marshalans targeting minimum monthly contributions GH¢5.00.

Objective of the MST

1. The Objective of the MST is to inculcate the culture of saving amongst the members with a view to providing additional income for their needs and to supplement their future pension benefits.
2. The Scheme shall be for the sole benefit of the members and for that matter the Knights  and Ladies of Marshall(as body or its branches) shall have the right to decide on how the funds of the Scheme shall be applied or used without the express consent in writing of each and every individual member of the Scheme.

Administration of The scheme

1. Currently Merban investment Holdings, a subsidiary of Universal Merchant Bank, is the Fund Manager of the MST.
2. Councils and their counterpart Courts shall appoint Scheme Officers who shall perform the secretariat functions as well as liaise between the Board of Trustees, the Fund Managers and members of the Scheme.

WITHDRAWALS:

1. Unless otherwise decided by the Board of Trustees, members shall be entitled to make withdrawals from their investments after the Scheme has been in force for at least (3) three years so as to enable the Scheme to achieve adequate growth.
2. Unless otherwise decided by the Board of Trustees, members shall be entitled to make withdrawals from their investments after the Scheme has been in force for at least (3) three years so as to enable the Scheme to achieve adequate growth.
3. Unless otherwise decided by the Board of Trustees, members shall not make more than one withdrawal within six calendar months.
4. In the event of death, or physical incapacity, or if a member is unable to participate actively in the Scheme for whatever reasons, the total amount standing to his or her credit less expenses incurred to liquidate assets to satisfy the said amount shall be made available for payment to the member or his estate as the case may be. Payment to a member who resigns from the Scheme shall be made not later than 90 days from the effective date of the resignation

BENEFITS OF CONTRIBUTING TO THE SCHEME.

A lot of opportunities abound in contributing to the MST. The following are a number of the benefits of contributing to the MST.

1. A Better Tool For Saving Hard Earned Income.

Banks are the traditional mediums of saving money but the essence of saving in banks is defeated by the unlimited access to the funds especially in the case of current accounts. The Proliferation of Automated Teller Machines (ATM) worsens the situation. Savings accounts do not restrict you so much, it on limits the number of withdrawals in a month. The MST on the other hand allows you to put away some fund monthly (minimum GH¢5.00) and commits you not to withdraw more than once in a year. This way you are able to build up large reserves of funds in the long term for purposes such as school fees, acquisition of assets and other expenses.

 

Others do not see the reason to save or invest their income. The reason for saving or investment could be deduced from the Bible in Genesis Chapter 41, When Joseph dreamt of the Fat years and the lean Years. It is applicable to not only the Pharaoh of Egypt and other kings of his time, but every one that lived then and now. They are timeless principles man can’t avoid. Your fat years are when you are in employment, you’re promoted, your business booms etc. Your lean years are when you lose your job, when you are sick and can’t work, when you go on retirement etc.  Like Joseph interpreted Pharaoh’s dream, and advised, you should save the excess of the fat years for the inadequacy of the lean years.

 

1. Opportunity To Earn Higher Interest Rate.

Contributions of the MST are invested by professional Fund Managers namely Merban Investments Holding Ltd one of the Best investment firms in Ghana. This fund manger puts our funds in high yielding investment instruments such as Treasury bills, Bonds, Shares and commercial notes. So far fund managers have an average interest rate of 22% in the past 3 years it has been in existence. This compares far better than the paltry 5-7% banks gives on their savings. In the short term of one year or two years you may not see the impact of this interest on your funds invested. When projected to Five years or Ten years you would notice huge returns that will come out of investing in the MST. The following is a hypothetical Table of analysis of investing funds consistently over Five years through to Ten years.

 

HYPOTHETICAL ANAYSIS OF MST CONTRIBUTION
YEAR	CONTRIBUTION	INTEREST 25%	INTEREST PLUS                 CONTRIBUTION
				1	120.00	16.25	136.25
2	240.00	66.56	306.56
3	360.00	159.45	519.45
4	480.00	305.57	785.56
5	600.00	518.16	1,118.20
6	720.00	813.99	1,533.99
7	840.00	1,213.73	2,053.73
8	960.00	1,743.41	2,703.40
9	1,080.00	2,435.50	3,515.50
10	1,200.00	3,127.61	4,327.60

 

This is a table of compound interest over a ten year period. A careful study of the figures above reveals the interest grows money exponentially in the long term. In the first year interest was only GH¢16.25 in the Fifth year interest become GH¢ 518.16 in tenth year interest is GH¢3127.61! We need to understand that in the first few years MST may not be yielding so much but as we exceed the five year our monies will multiply to our surprise. That is why mathematicians posit that compound interest is the eighth wonder of the world.

Conditions

The results in the above table is only valid under the following conditions

–                Contributions must be consistent for all the months in all the years. So Bros/Sis should    endeavor to contribute every month to get the desired result.

–                Withdrawals from the MST should be done only in the long term when you need the funds for a desired goal. Intermittently withdrawing funds reduces the principal on which the interest acts on to multiply your funds.

–                Average interest rate stays at 25%. With reputable fund Managers like our own Merban Investments and with the prospects of our dear nation Ghana, I have no doubt that in the long term average interest rates will not be around 25%.

–                Funds collected in various councils are transferred in time to the Fund Manager, Merban investments Limited. Preferably within the week after council.

–                Due to inflation over the long term the results above may not have the same purchasing power as now. But you would agree with me too, that over time your income will also be raising especially younger bros and sis. To forestall this defeat to your funds it is suggested that as you income rises, you raise the monthly contributions. This way the result in the long term will also be raised to meet the purchasing power at the time or even surpass it. Some time if you a windfall of income say back pay/arrears for promotions , travel allowances, side issues and the rest you could further invest them in the MST to achieve higher  results that accomplish greater goals or objectives in the long run.

1. It Allows You To Avoid Paying Huge Sums In Loan Repayments.

It is common for people to go borrowing in order to accomplish the desired goal. Bank loans, due to very high interest rates cost people a better part of their entire income. Let’s not get it wrong, am not advising against the taking of loans but there is a better alternative to avoid paying huge sums in loan repayment. Long before your desired goal (build a house, buy a car, pay school fees etc) you could set aside funds that would have been deducted as loan in to an investment scheme like our own MST. With bigger sums like those of loan deduction you could accumulate substantial sums in multiples of the hypothetical figures considered above. It is not for nothing that Benjamin Franklin, (Former US President) one said “he that goes a-borrowing, goes a-sorrowing”

1. An Opportunity To Protect Or Preserve You Contributions/Principal.

Deductions by way of bank charges, Commission on Turnover etc deplete funds saved in banks. MST funds on the other hand are professionally managed by fund managers whose fees are linked to the performance of the funds they are managing though they have limited administrative charges. Therefore with the MST your contributions or principal is secured.

There are other investments where you stand the risk of losing your entire principal in the long term. These investments are called Pondzi schemes. There is no need to mention specific institutions but these are schemes where people are promised up to 70 – 100% returns in six months to one year. Bro and Sis. Should be suspicious of such institution as they are unreal and un-natural, that is, you don’t expect to grow a Shea tree or Cocoa tree to yield fruits in one year or even three years. These institutions don’t really have those sums of monies but they only promise to pay. In the short run unsuspecting masses falling prey to them, will even go the extent of taking up loans to invest in such schemes. The funds of the masses I used to pay the pioneers of the scheme and they make it look real that they have such funds. In the long term, when the money is expected to be yielding interest, the promises to pay over runs what is actually available to be paid. This creates a panic leading to the collapse of the scheme. Unfortunately unsuspecting masses will lose their funds to the pioneers of the scheme.  Bros. and Sis. Don’t be victims to such schemes! Invest your funds in the MST.

 

THE ROLE OF THE LEADERSHIP OF THE KNIGHTS OF MARSHAL IN GROWING AND SUSTAINING THE MST.

The supreme council must be commended for instituting the MST. I have no doubt it is sustainable but we should strive to achieve the fetes attained by similar schemes of the Knights of Columbus, USA. The Knights of Columbus has chalked the following success with their scheme:

–          AAA(Extremely Strong) rating by Standard & Poor’s a global rating Agency

–          The scheme of the Knights of Columbus was named the 2014 “World’s Most Ethical Company” by the Ethisphere Institute, an independent center for research promoting best practices in corporate ethics and governance

–          Membership over one million contributors to one or more of the investment/insurance schemes of the Knights of Columbus insurance.

–          The Knights of Columbus insurance or investment schemes have been the back bone in their pillar or principle of Charity which is their foremost principle. In 2013, the Order gave more than $170.1 million directly to charity.

To achieve this, membership or contrutorship must go beyond the Hundreds of Marshallans that we now have on the scheme to include the Thousands of Marshalans across the globe. I understand MST is compulsory but on the ground that is not the case. We understand economic conditions is impeding contributorship but with the Minimum of GH¢5.00 every marshalan with the will to save/invest should be able. The MST Committee at the supreme council should seize the opportunity in regional councils or component council to propagate the MST. MST office holders at components councils could also be trained or sensitized, who will in turn spread the word.

 

CONCLUSION

Ultimately, the success of the MST rest on individual Marshalans. Of all the payments made at council, the MST is the one that you pay that is credited to an account designated for the Bro. or Sis. Personally. Like Pharoah prepared for the lean years marshalans should also prepare for their lean years so that when the lean years come people will say because he is a Marshalan he has a better live even in the lean years.

 

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The Author

MST Officer, C102 Tamale

Bro. Godwin Abotisum Atulley-Kandi

B.Sc. Admin (insurance option),

Associate of the Chartered Insurance Institute, London

 

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