Making Your Dollars Work for You Investment Clubs

7/28/2019 Making Your Dollars Work for You Investment Clubs

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INVESTING:

INVESTMENT CLUBS

As you continue your eff orts to reap financial rewards from

investing, you’ll likely come across the idea of an investment

club.

Investment clubs can be the icing on the cake in terms of diversifying your portfolio and sampling an array of

investments that have been researched by yourself and

others you trust. When you’re finished reading this investing

guide, you’ll be ready to “join the club” to cultivate more

dollars for you and your family.

‣ WHAT IS AN INVESTMENT CLUB?

An investment club is a group of individuals who pool their

dollars to make investments. Typically, each person in the

investment club will chip in the same amount of money to be

invested into a particular stock, bond, or mutual fund.

Then, as the investment receives dividends or continues to

earn dollars, the earnings are considered to belong equally to

each investor in the club.

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MAKING YOUR DOLLARS

WORK FOR YOU



Like any other organized group, an investment club meets

regularly, usually monthly, and the members are expected to

attend and take part in the group’s common goals by putting

in e ff ort and study.

The unique aspect of an investment club is that its members

take responsibility for educating the group about a

prospective investment. For example, if someone in the group

hears about Stock XYZ, someone volunteers to thoroughly

study that stock, its growth history, and the company off ering

the stock.

The group member will then, in a later meeting of the club,

share the information he gathered with the other members.

Members will then vote as to whether they believe theirdollars (and how much) should be invested in Stock XYZ.

‣ HOW TO START AN INVESTMENT

CLUB: PRELIMINARY STEPS

Consider these steps if you’ve decided you want to get an

investment club up and running.

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3. Follow your agenda. You all have work to do to help your

money grow. Remain on task.

4. Keep meetings short but efficient. Members will see

that meetings are focused, productive, and worthy of their

time. Plus, you’ll likely keep your investments moving

forward in a positive direction.

‣ WHAT TO INCLUDE ON THE

FIRST MEETING’S AGENDA

1. Have each person share his level of interest in the

club and financial goals. Your goal is to ensure each

person wants to be in the club. However, you want to also

get across that there’ll be work and eff ort expected from

each person.

‣ Prospective members must also be open and honest

about their own financial goals to help determine if

they’re a good fit.

2. Select a financial philosophy to follow. You’ll want to

ensure people understand each other and agree on a

group philosophy.

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‣ For example, many clubs adhere to Warren Buff et’s

ideas for investing. But you might adopt a diff erent

financial approach, like Suze Orman’s or “The Street’s”

Jim Kramer’s.

‣ It’s also wise to decide together to fall back on some

written “rules” when necessary, like Warren Buff et’s

“Warren Buff et Speaks” book or one of Robert

Kiyosaki’s books.

3. Establish a couple of overall goals for the club. Keep

them brief and understandable.

‣ Number one might be for each member to invest X

dollars monthly.

‣ Number two could be for each member to study a

particular type of investment for a month to present at

the next meeting.

‣ Number three might be to increase your total dollars

invested by 3% yearly.

4. Decide the monthly amount of dollars each person

will invest. It could be $25-$100.

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5. Discuss how members want to organize and operate

the group. For example, maybe you’ll have a president to

run meetings, a vice president to help stay on-task andwithin time limits, a treasurer to collect money and do the

trading and keep meticulous records on members’

investing dollars, and a secretary to document and store

notes on meetings.

6. Brainstorm to pick a name for your club. Your club’s

name can be simple like, “The Peoria Women’s InvestmentClub” or funny like, “The More Cash, Dough, and Green

Club.”

7. Start the paperwork. Club members need legal

protections provided in written contracts and

agreements. A sample operating agreement for the No

Small Potatoes Investment Club can be found at the Slow

Money Maine (slowmoneymaine.org/investment-club/)

website.

8. Select members to open a checking and brokerage

account. The bank account will be used to keep members’

monthly investments and also to write checks from to

make the investments. A brokerage account is necessary

to have someone to do the trading.

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Making Your Dollars Work for You Investment Clubs

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