Starting Your Own Investing Club - Part 1

Provided By Ultimate Trading Systems

Finding Members & Meeting With Your Investing Club

Congratulations! You’ve decided to start your own investing club. But one person alone is not enough to be an investing club, so the first thing you’ll need to find some more like-minded people. There are a few ways you can accomplish this.

If you have friends who have expressed an interest in the stock market, or in investing, you can approach them about joining your investing club. You can also place advertisements in newspapers or on community bulletin boards letting people know that a new investing club is forming. However, once the investing club has formed you will need to be cautious about placing advertisements again. In the United States, those can be seen as solicitations and are illegal.

The important thing to remember is that you want to attract people who have an interest in learning about the stock market while they invest small amounts of money. Don’t be concerned if the majority of the people who have expressed an interest in joining your investing club are new to the stock market. It can be a good thing that your investing club is composed novices, since people who have prior experience with the stock market may quickly become frustrated dealing with others who are amateurs. There are also many resources available to help you, and your investing club members, learn about investing and the stock market.

Before you set your first meeting, you should give your members some information about the investing club, explaining its investment goals, how it will be run (one member, one vote, or proportional voting), how often it will meet, etc. Many of these aspects will be fine-tuned in the first meeting.

When you meet with your investing club for the first time there are several things that you’ll need to discuss. Make sure everyone has the opportunity to contribute to the meeting so that all opinions are taken into account. The following general principles should all be covered in the first meeting:

· Discuss the exact details of how the investing club is going to be run. At this time you can talk about the goals of your club administration and how you plan to achieve this organization.
· Make all members aware of the commitment level that is required to participate in an investing club. This will give anyone who has second thoughts a chance to decline being a member, and will reaffirm the commitment of other members.
· An agreement should be reached about the investing style your investing club is going to focus on. Take a vote if the group is divided about any investing issues. Since this is the first meeting any member that is in serious disagreement about the decisions made can to decline being a member. Members should agree that this is long term commitment, not an opportunity to get rich in a year or two and then leave the investing club.
· An agreement should also be reached on how much money each member is going to contribute each month. Keep in mind that you can make changes to the minimum amount policy at a later date. Many clubs start out with small contributions of anywhere from $25 to $60 dollars. This money is used for the club’s administrative fees as well as a contribution into the investing club fund.

There are several other administrative issues that you’ll want to discuss at your first investing club meeting such as:
· Meeting times. All members should agree on (1) the days and time that you’re going to meet (an investing club should meet about 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. Studies show that a good size for an investing club is approximately 12 to 15 members. When you limit the size of the investing club to this many members you’re still small enough to hold meetings in member’s homes.
· Meeting place. You might want to come up with a few meeting places, such as a local library or café, to use as an alternative meeting choice.
· An investing club name. You’ll want to come up with a name for your investing club. You don’t need to make this decision on your first meeting but members should come to the next meeting ready with several ideas to share for a club name.

Once you’ve agreed on all of these issues you’re ready for your second meeting where you’ll be taking care of more of the finer points of investing, such as legal details and tax issues.

To prepare for some of the more detailed information and decisions that you’re going to have to make you should consider asking members to volunteer to come to the next meeting with the one of the following:

· partnership agreement forms
· information for preparing a mission statement
· banking information
· legal forms, such as tax information
· information about forming a partnership
· local bylaws about investing
· broker information
· accounting information
· investing information and articles
· a listing of current members, including phone numbers and addresses

The initial first meeting will establish the basic guidelines for the way your investing club is going to be run and what your goals are going to be. You’ll want to make sure that the majority of the members are thinking the same way about these issues to get the investing club off to a good start.

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