What is an Investment Club

“One dollar for eternal happiness? I’d be happier with the dollar. “-Monty Burns

Investing and all things financial can be extremely complicated and overwhelming. Learning about different types of securities, investing styles, strategies, stock market analysis, and balance sheets is just hard to do by yourself. While financial advisors can offer advice, most new investors need the support and encouragement of like minded people. This is why investment clubs have increased in popularity in the last decade. If you are interested in investing and do not know where to begin you may want to seek out an investment club in your area and join. HULT PRIVATE

Investment clubs can be found world wide and have been around for several years. This type of club encourages open discussions, sharing of wisdom, and investment mentoring between members. Of course, investment clubs are not all talk. Investment clubs offer it’s members a way to combine funds and invest as one entity. This works great for several people who want to invest but have limited funds to do so. As a group they decide on what funds, stocks and bond would be most beneficial and invest in them. Not only does pooling money create a greater investing power but the clubs members share the costs and fees associated with buying and selling stocks.

If there is not an investment club in your area, you may want to set one up. Creating an investment club is easy and takes very little time. The most important part of the set up is to make sure there is a solid structure to how the meetings are run and there is always an agenda to follow. Most clubs are composed of 20 or less people. Clubs operate like a limited liability company and must be legally recognized as a business. Investment clubs are required to keep accounting book and it is important to keep detailed records of all member’s and the money contributed. Each member contributes a specific amount of money each month. A typical figure would be around $50 dollars. However, not all members will be able to donate the same amount of money each time because of unexpected expenses etc. That is why it is important to have a clear away of calculating each members share.

Once the club and the members are established you will need to find a brokerage firm and open an account in the club’s name. There should be a number of local brokers available however if you or one of your members are tech savvy you may consider using an online brokerage firm. Online firms offer reduced fees and can be accessed 24/7.

 

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