Starting an Investment Club

December 23, 2009

Starting an investment club is an option if you rule out joining an investment club based on clubs whose investment strategies or investing goals are incompatible with your own.  Of course starting an investment club is no small task, there are a whole checklist of things necessary to start one up.

Here are some of the things you’ll have to figure out or do if you can’t find a club you like and want to start your own.

Meeting times. All members should agree on (1) the days and time that you’re going to meet (most investment clubs meet once each month), (2) the place that you’re going to meet, (3) the length of the meetings (most meetings last about two to three hours), (4) the organizational format that each meeting is going to take.

Number of members. Agree on the size of the investment club. Studies show that a good size for an investment club is approximately 12 to 15 members. When you limit the size of the club to this many members you’re still small enough to hold meetings in member’s homes.

Investing education program. There is a lot of good information available for members of the National Association of Investors Corp, NAIC, on investing education.  The education program is typically headed up by some combination of the vice and education officer.

Meeting place. You might want to come up with alternative meeting places, such as local library or café, to use as an alternative meeting choice.

Investment club software. If your investment club is going to use software to keep track of stocks, profits, expenses, and other administrative information the secretary can purchase this software and have it installed. Remember to keep in mind that if more than one member of your club is going to use the software program on their computer that you’ll have to purchase multiple copies of the software or buy multiple licenses for more than one user.

Investment club name. You’ll want to come up with a name for your investment club. You don’t need to make this decision on your first meeting but members should come to the second meeting ready with several ideas to share for a club name.

Registering your investment club. Once you have a name you can register your club’s business entity with the state. When the paperwork returns, the Secretary of your investment club should make sure that the paperwork is filed and that members of the club have access to the information.

Investment club accounting. The newly elected treasurer should head up selecting and setting up the accounting system.  You’ll want to have this set up at least by your second meeting.  One of the most popular club accounting systems is probably Bivio, some clubs prefer Club Accounting Online.

Tax ID Number. This is the time to file the information that is required to obtain a Tax ID Number. The Treasurer will now be able to open up a banking checking account for your club as well open a brokerage account. If your investment club hasn’t decided on what brokerage to use this task will have to be delayed until a later date.

Research Items:

  • partnership agreement forms
  • preparing a mission statement
  • banking information
  • legal forms, such as tax information
  • broker information
  • member management software

This post on starting an investment club is part of an investment club series that also covers joining an investment club , investment club mentors , and other investment club tips .


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Ben Edwards, the founder of Money Smart Life, saved up enough to buy a Nintendo back when he was 12 years old. When he used the money to buy shares of Wal-Mart stock instead, he knew he wasn't like the other kids... His addiction to personal finance has paid off for his family and now he's helping you to afford the life that you want. Check him out on the web at Google Plus, Twitter and Facebook.

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