How (and Why) to Start an Investment Club
Would you like to be on the same financial page with a group of people? Meet regularly with like-minded and fun individuals, and collectively learn about and discuss new financial concepts? Are you tired of labored conversation at dinner parties, where any topic that touches on money is frowned upon ?
Then joining or starting an investment club may be just what the doctor ordered!
Investment Clubs take on many forms, from those who pool their money and invest collectively, to more social meeting forums where guest speakers are regularly invited to entertain and enlighten. Some clubs focus on each member’s individual financial plan with an eye to put everybody’s head together and suggest ideas for improvement, and yet others allow members to maintain relative financial anonymity and focuses instead on broader financial concepts.
Given the wide range of clubs and activities available, here are a few guidelines if you want to start an investment club of your own:
Find Some Friends
The underlying tone of all investment clubs is a social one, so it is imperative that you enjoy the company of the other members! You don’t necessarily need to know them all well – having friends recruit new members and accepting referrals can be quite effective – but you have to start somewhere.
Are you a new mom? Getting together with other new moms to form an investment club is a great way to socialize, and to learn about financial concepts that apply to your specific demographic.
Or maybe over drinks you and some other business owners in your association tend to chat about money matters…here is another like-minded group of people you could formalize the process with.
There is something to be said for attracting members with different backgrounds, too. The more diverse your club membership is, the more each person can bring to the table. So although everybody may have the common bond of being a new mom, colleague, or fellow business owner, hopefully there are also elements of diversity built in.
The way in which members must be on the same page though, is with regards to financial philosophy. If one or two members only want to discuss short-term trading, and others want to discuss retirement plans or insurance, there will only be friction and disappointment on somebody’s part.
Plan the Meeting
Ideally somebody can offer up their home or has a line on a quiet place to meet, where interruptions will be minimal and people can linger. Planning a meeting around food is always a great ice-breaker, and sharing food tends to open people up to new ideas and conversation. Depending on the group size and dynamic, you can reserve a private room in a restaurant and all pitch in to have it catered, or everybody can simply bring a dish of something over to a member’s house for sharing.
Set (and Stick to) The Agenda
Even though you may be well-versed friends, this is a social gathering with a purpose, and that precedent must be set right from the beginning. Formalize the meeting process, and you will be less likely to get off track, both during each meeting, and on the whole.
Here is what the agenda for the first meeting could look like:
- Open the meeting.
- Discuss what investment topics the club wants to focus on, and the format each meeting will have. (For example, will you invite knowledgeable guest speakers to present to the club each week, or invite each member to research and discuss a topic, or collectively focus on a certain type of investment or style of investing? Also, are you interested in the same financial topics)?
- Query each member as to what they hope to get out of the club.
- Vote on all decisions with a show of hands.
- Elect club officers. (This may be unnecessary if you want nothing more than an informal social gathering, but will be required if you take legal steps to lodge investments together).
- Define each member’s responsibilities. (When electing club officers this is especially important, but even in an informal setting, saddling everybody with some form of responsibility will increase the club’s overall chances of success).
- Set regular meeting times, locations, and miscellaneous details.
- Choose a club name.
- Vote on any necessary decisions with a show of hands.
- Close the meeting.
Subsequent meeting agendas will hinge on the results of the first meeting, and it is equally important that an agenda be set forth for each meeting, and ideally that it remain the same every time. Formalizing a meeting doesn’t have to make it dull – it simply keeps things moving and creates a set of expectations for each member rely on.
This is just enough information to get your club off its feet and into infancy. Where you go from here varies according the membership, desired outcome, and the format decided upon.
Here are a few web resources for you to research investment club topics and formats, or even to find an existing club to join: