How the WTS Grows RICH!!!

by Amazing 10 Replies latest jw friends

• 

  Amazing

  How the WTS Grows RICH!!!

  1970

  Principle Loan: $200,000 to congregation buy land and build hall.
  Interest Rate: 3%
  Loan Term: 30 years.
  The total paid back over 30 year: $303,555

  2000 Sell Hall for $950,000* (less $50,000 closing costs) net = $900,000

  Total funds to Society = $1,203,555

  * The sales price is assuming an average growth in value (often times called ‘appreciation’) of 5% per year. Since 1970 the growth has fluctuated between a high of 12% and a low of about 3%. But real property valuation tends to increase an average of about 5% per year.

  The original investment paid back with $843.21** payments over a 30 year loan means that the total rate of return to the Society is 8.62% UNTAXED! This is clearly better than bank passbook rates, and comparable to some CD’s and low risk mutual funds. Shhhhhh .... quiet, don't tell the JWs, but inflation since 1980 has hovered around 3% according to the consumer price index. So, could the WTS be considered a true PROFIT? You be the judge!

  ** If the Society received no payments, and got the above growth, then the rate of return would be about 6%. But because the congregation paid off the original loan amount at 3% paid monthly with $843.21, then this drives the rate of return up to 8.62%.

  Go Watchtower go! You have learned how to be really good capitalists! You make my Conservative Republican heart sing the joys of filty lucre! Yes, money, money, moneeeyyy - Amazing
• 

  radar

  J.Ws buy Kingdom Hall, with part loan from the Watchtower Society.
  The Watchtower charges interest on the loan as well as the bank.
  J.Ws eventually pay off the loan.
  Final Result: The Kingdom Hall belongs to the Watchtower Society, and not to the ones that payed the loan.
  Capitalism? No Extortion!

  Radar

  All that we see or seem/ Is but a dream within a dream.

  -Edgar Allen Poe
• 

  RunningMan

  And how rich have they grown? Let's calculate some more:

  There are approximately 10,000 congregations in Canada and the U.S. If we
  assume that every two congregations has a kingdom hall, and that each hall
  is worth $400,000, (the halls I know are worth anywhere from 50K to 1M), then
  the Society owns no less than $2 Billion worth of Kingdom halls in these two
  countries.

  Then add in the rest of the world, the bethels, factories, farms, and the cash and
  investments, and you have an empire with net assets of $10 Billion. I am personally
  tempted to say it is much higher than this.

  Remember in the late 60's, when the Society wanted to buy the Squibb buildings in NY?
  They sent around pledge forms to all the congregations, asking for donations. I was a
  child in a small rural congregation in Saskatchewan at the time. It sickens me now to
  think of all of these farmers calculating their pennies so that they could send a donation
  to a wealthy conglomerate so that it could swallow up some property in New York.
• 

  Dan B

  Hi Radar,

  You forgot one part of the equation. The money that the WT society loans out to the local congregations come from the Kingdom Hall building fund. This is a contribution from each congregation. So this is how I see it going down:

  1) Local congregations donate money into this fund.
  2) The WT loans this money and charges interest.
  3) The building is built with free volunteer labour.
  4) The local congregation pays back the loan and interest
  5) The local congregation sells their old hall and forwards the proceeds to the WT
  6) The WT owns the property, and receives interest on the funds which these same people had a part in contributing.

  If I did this, I would go to prison!

  Dan
• 

  Amazing

  Hi Radar: You said, "The Watchtower charges interest on the loan as well as the bank." Not so. Only one lender charges interest on the same loan. And the Society does not use 'wrap-arounds' where they borrow the money and then add on interest. The Society makes the loans straight from its KH Fund. There have been some few congregations that borrowed from commercial banks for improvements and ither smaller needs. But the Society was not involved in these loans.

  The Soceity interest rate of 3% is not bad, and it would not pay for a congregation to borrow from a commercial lender at much higher rates, perhaps at 8% or 9% for a church. (Residential rates are about 7% right now.)

  In the above, I assumed that the Society would sell the hall and keep the net proceeds. When I was a JW and handled the money for the congregation, we would borrow from the Society to build the new hall while the old hall was for sale. When the old hall sold, the net proceeds would be used to pay down (or pay-off) the congregation debt to the Society on the new hall.

  But, judging from what Kent wrote in another post, it sounds as though all that has changed, and the Society now keeps the net proceeds as a tax free donation from the congregation and loans them out again to build the new hall.

  When the "Quick-Build" projects started, there were collections worldwide to help build the KH Fund. We did not mind the growth or the interest paid, because it would allow expansion as new halls were needed, and would keep up with inflation as construction costs increased. However, no one anticipated that this would keep on and on like the Energizer Bunny, and the Society could improve its rate of return.

  But, if I have erred in how I understood Kent, or if Kent made an error, then this measns that unless a congregation dissolves, the Society is only making enough to keep pace with inflation plus whatever tax free donations congregations and individuals make out of any sales on Kingdom Halls. - Amazing
• 

  Englishman

  Amazing,

  I would be interested to know if you are using the same math to work out percentage rates as we are over here.

  FYI, credit card rates are about 1.3% per month variable.

  APR is assumed to be the fairest measure, for eg, if you borrowed £1000 @ APR of say, 15 %, you would owe at the end of 1 year £1150 (£1000 + £150 interest) if you had not made any reducing payments.

  Are you using a similar system?

  Englishman.

  Nostalgia isn't what it used to be....
• 

  Pureheart

  1) Local congregations donate money into this fund.
  2) The WT loans this money and charges interest.
  3) The building is built with free volunteer labour.
  4) The local congregation pays back the loan and interest
  5) The local congregation sells their old hall and forwards the proceeds to the WT
  6) The WT owns the property, and receives interest on the funds which these same people had a part in contributing.

  Each point is correct except #5. If the local hall sold its old building then they would use the proceeds to pay off the existing loan and utilize the rest if there were any to deposit in their own account for further needs.

  Pureheart
• 

  Mazza

  The capital growth that you gestimate is probaby way out. I know when our first hall was built, they didn't really do terribly well when it was sold 20 yrs later to raise the money towards a bigger and better hall - they probably realised $70K AUD cash - which is better than nothing over 20 yrs, but not a fortune. However I'm thinking of properties in prime realestate areas such as here in Hong Kong. The Bethel house in Ede Road Kowloon Tong would have to be worth 200 million HK dollars maybe more (divide by 7.8 for US dollar rate). Property prices in HK have suppassed Japan. Speaking of Japan, the Society is bound to have worked the same deal there as they have in HK. Bought in good areas 40 or 50 yrs ago and have sat tight ever since. Just the Bethel houses alone in the major cities would be worth a fortune. AND who do they belong to? Not the local congregation that's for sure.

  Marilyn
• 

  uncle jimbo

  Amazing,

  Right on!

  The Society even goes as far as encouraging congregations to build new instead of remodeling. I was in 2 different congregations where the congregation had older halls and the mortgage all paid off. In both cases the Circuit Overseer goaded the elder body into building a new hall and taking out hefty mortgages to the Society instead of remodeling.

  I have a question: Does anyone know where ALL of the money goes? The Kingdom Hall typically cost US $250,000 JUST FOR THE BUILDING MATERIALS (all labor is free). And these halls are not particularly ornate or much bigger than a typical single family home (which costs around $100,000 - $150,000 including labor). Anyone familiar with the construction industry knows labor is tyically the biggest expense (about the cost of the materials), but for Kingdom Halls its ALL FREE! And most of the new halls have no windows to save MONEY too!

  My dad is a Quick Build overseer, so I am privy to info about lots of halls. Seem to be lots of new halls being built. My dad has a quick build every other weekend lately. And it's not that there is any growth in the area - the new halls typically seat less than the hall they are replacing.

  Kingdom Halls are small potatoes next to the real cash cow: Assembly Halls. Oh, the stories I could tell about the one in Henrietta, NY. That was one of the BEST investments the Society ever made. Why with all the cash that went missing and "cost overruns," they turned a hefty profit BEFORE the Assembly Hall even opened its doors.
• 

  Amazing

  Hi Uncle Jimbo: The reason a typical Kingdom Hall will cost more to build than a similar size home in the same area, is that the Land cost for a Church zoning is higher. It is very difficult in many areas to get enough land for a Church. Many churches need ample parking, especially if they end up having two congregations share the facility.

  Also, the inspections and permit process, as well as planning and zoning can cost much more. Unlike residential sites, Churches and other kinds of facilities can create angst in the local coommunity, and cause expensive delays.

  Also the typical residential consctruction site will involve many homes in a subdivision. So, this tends to drive down unit costs. Whereas Churches are unique structures and many of the materials are expensive.

  FInally, until recently, many Kingdom Halls had additional features that older halls from the 1950s through the 1970s did not have. Such as: Circuit Overseer Apartment, Garage, Kitchen and eating area for JWs to use on workdays at the Hall. Fine oak cabinettry for the main library, a second, and sometimes a third TM School room, larger storage facilities, enlarged bathrooms with handicap access, lobby or nice entry, literature and magazine rooms with fine oak cabinettes, super delux sound systems, and even a glass enclosed room for parents with babies, finer stage (platform) areas with a room off the side, nicer property fencing, proper up to code parking lights, fully paved parking, a decorative facade, and a plush front entrance of brick or adobe designed like a kingdom castle wall with orante signage. All of these extras can be expensive, and are not normally installed in a regualr residential house.

  My last Kingdom Hall had ALL the above, and even had a 5 acre park in the back for JW pick-nicks. They were one of the few remaining congregations that held outdoor large events for fun. They talked about selling the extra land when the Society started discouraging large gatherings, and discouraging anything sponsored by the Congregation. Of course, the proceeds would be donated to the Society to help with the Worldwide Kingdom Work. - Amazing