Start Investment Club - Step 2

Step 2 – The First Meeting

When the investment club meets for the first time there are several things that will need to be discussed. Let everyone have the opportunity to add their input into the meeting so that all opinions are taken into account.

Make sure that you schedule a large amount of time for this first meeting so that you have plenty of time to talk about all of the following issues:

Common interest of the stock market. Make sure that all of you have the same interest in starting an investment club. You want to make certain that you’re all on the same page about what the club is all about.

Organization. Discuss the exact details of how the 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.

Commitment. All members should be aware of the commitment level that is required to participate in an investment club. This reaffirmirming that there is a seriousness to be a member of the club will give anyone who has second thoughts a chance to decline being a member.

Reading material. There should be a listing of material about investing that everyone should read to become more familiar with investing techniques and definitions. At the time of the next meeting members can start to discuss the finer points of investing.

Strategy of investing. There should be a mutual agreement about what investing style your 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 at this first meeting has a chance to decline being a member. Members should agree that this is long term commitment and if their goal is to get rich in a year or two and then leave the club it goes against the goal of the investment club.

Monthly contribution. Members should come to a mutual agreement upon how much money they are each 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 investment fund.

The initial first meeting is a great way to clear the air and start to establish some basic guidelines for the way your investment 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.

There are several other administrative issues that you’ll want to discuss at your first meeting. These administrative issues include:

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.

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

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 next meeting ready with several ideas to share for a club name.

Once you’ve agreed on all of the above 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 assign tasks to members to come prepared to the next meeting with the following information and data:

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