Sometimes Being an Adult Sucks (kinda gaming related, all finances)

[caz604]

Khuutra said:

mrstickball said:

Essentially,

You give the money to the trust fund in the form of share buy-in. They take the money, and invest it into real estate. In AGNC's case, its usually mortgage repossessions...They buy a mortgage for a fraction of the face value, and either re-hab the home, get the money from the person in the house, or re-sell the home as is.

All profits, sans the administration fee and raw costs, goes back to the shareholders in the form of dividends. Each quarter, AGNC returns about 5% of your investment in the form of dividends.

Iiiiiiiinteresting

Sounds like it might not be particularly sustainable in terms of that profit level for very long, though

Some trust funds do work like that, but not many.

A trust is actually based on a plan document that outlines the relationships of the beneficiaries (people who have put into the trust) of the plan and owners of the plan (Trustees).  The trustees based on the plan document can invest in basically whatever they wish as long as it falls inline with the statement of investment principles that the trust has to agree to.