Investment Club

KeysI’ve been wanting to start an investment club for many years now. Why I didn’t while I had a stable life I can’t really say.

Today it would be hard for me to attend the meetings. So it will have to stay on the backburner until I next have a home.

Meanwhile, you start one.

It is quite easy. While the formalities are quite different depending on what country you live in, the basic idea is the same.

Gather a group of friends. Each pledges to invest a certain amount with the club each month. Meet every now and then and decide how to invest the money. After a predetermined time has lapsed, liquidate the assets and split the money. Or spend them on something nice. Like a trip to somewhere.

I have some recommendations that will increase the odds of having a success.

Everyone should invest the same amount. It should be a small enough amount such that all the participants can afford it, while still be enough to be worthwhile. Say $100 or £100 should do it. Less, and transaction fees will eat too much of your capital. More, and one of you might not afford to stay if you get unemployed for some time.

The participants should have similar styles of investing. If half the group wishes to change the portfolio fully every month while the other half wishes to do so yearly you are set for trouble.

Meet no more often than once a month (otherwise there will be no money to invest) and no more seldom than three times a year (otherwise you might as well not have the club).

Set the liquidation date between five and ten years into the future. Decide on penalties for withdrawing early (at least the cost of selling, but probably more like 10%).

Gather a group of five to fifteen friends with a sweet spot at around eight.

Get started.

If you want help with rules and regulations for your particular country I will willingly help with the research.

Cheers,

Daniel

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