Mutual Retirement Funds

Press, Volume CX, Issue 32391, 2 September 1970, Page 16

Mutual Retirement Funds

Sir,—The country is at present being flooded with the enclosed circular from a mutual retirement company. According to the circular $lOOO invested with them for 40 years would return $41,865 (estimated, of course). They have purchased a property in Auckland for $2,100,000, so according to their estimates this will return participants the tidy sum of $87,916,500 in 40 years. Perhaps Mr Muldoon should invest, say, $20,000,000 with the company, as in 40 years, again using their methods of calculation, the country would have a return of $837,300,000, a long way toward paying off the national debt. Social Credit just wouldn’t have a look in on this method of finance. They also state that 232 members joined the company last month. Do these people really know what return they will get? Surely the public should be protected against such “gimmicky” advertising. —Yours, etc., LOW FINANCE. August 26, 1970.

[Mr A. Skipper, executive director of Dominion Mutual Securities, Ltd, replies: “The letter from ‘Low Finance’ is an unwarranted attack on a non-profit-making organisation which is making a serious attempt to help people protect their savings from the effects of inflation. A knowledge of property investment and compound interest will show that the D.M.S. Fund is soundly based and offers probably the only answer to the problem for the majority of people who lack the capital to invest in property themselves. For many years, property values have increased more rapidly than any other type of safe investment. It is quite possible to obtain, from rents, an initial net return in excess of 10 per cent on capital invested, so it is obvious that capital gains from rising property values, plus the re-investment, of income from rents (which also keep rising), will provide exceptionally good returns to members. Our advertising is totally devoid of gimmicks and as regards his claim that ‘the country is being flooded’ only 70,000 D.M.S. newsletters were printed for the whole of New Zealand.”]