CREATING,YOUR,FIRST,INVESTMENT finance, share, loan CREATING YOUR FIRST INVESTMENT CLUB

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An investment club is a group of people who meet at least once a month to increase their investment knowledge. They agree to contribute a predetermined amount of money which they then pool together to invest, typically, in the stock market. Depending on the extent of the trading knowledge of the members, monthly contributions can be modest, ranging between $20 and $50. Mostly, clubs of this nature are to give each member an affordable way to learn how to purchase stocks. Once you've gained enough confidence, knowledge and experience - you would normally expand outside the club and create your own personal portfolio of stocks. Before I share with you about how to create your first investment club. Let me explain what your normal investment club is like. Normally, an investment club is made up of - between 10 to 20 members. Each member is required to bring some knowledge or research to the table about potential stocks. The meetings are to discuss the stocks as a group and then to decide on which stocks should be invested in by the group as a whole. One of the most important items on the agenda to agree on before looking atany particular stock is to agree on the philosphy of the clubs trading goals. It's best to agree on this early into the group to avoid arguements later on. For example, someone in their twenties might prefer to invest in riskier stocks while someone in their retirement years would prefer to invest in stable and slow growth stocks for safety purposes. It's normally best to choose your members carefully first by similar goals. According to the National Association of Investors Corporation, there are over 50,000 investment clubs in operation in the United States. These clubs are made up of many different groups of people with many different investment strategies. You have clubs made up of all women in their retirement years, you have church groups that have formed investment clubs, you have all black businessmen investment clubs that focus on investing to give back to their communities. I'm going to share with you how easy it is to create your own investment clubby sharing with you a little information about the one I'm forming at this very minute. As you know, I published the eBook "An Entrepreneur's Approach to Buying & Selling on Wall Street". When I began sharing some of the information and stock picking strategies found in that book with some of my friends from church. They were very interested in learning more abouthow I was able to choose stocks that produced such remarkable gains. So, I agreed to create an investment club where I would actually teachthem first hand as a group how this system works. We met at my houseone night to discuss just what would be involved and to iron out just a fewminor details before we could even begin. First, we as a group decided tokeep our club rather small. At least 4 of the 7 were already investors - atleast they already had their own personal brokerage accounts. Once, we agreed on the number of members, I made the suggestion thatsince we were focusing on the strategies of my eBook that we make itpart of the bylaws that we use only those strategies and no others to avoidany arguements later on. I also impressed upon the idea that we treat this investment club a little different than most other clubs. I wanted to provethe awesome power of these strategies, so I suggested that we only make a one time investment rather than making regular monthly contributions. We would allow a simple math equation to determine just how much wewould invest up front. We chose Charles Schwab as our broker and becausethey have a minimum amount of $5,000 to open an account, we agreed thatwe would all invest a one-time $715.00 per member upon our second meeting. Next, we chose a name for our investment club. So of course the veryfirst official investment club based soley on the strategies of this eBook was born - "Chosen Few Investment Club", an appropriate name for ourgroup. The only other item we needed was to apply for the clubs ownFederal Tax ID number or EIN# from the IRS. Once I received the numberin the mail, the only thing left was to choose officers of the club and openthe account under the "Investment Club Account Agreement" with CharlesSchwab & Company. Our investment club is registered with the IRS as a general partnership andeach member will be required to be responsible for his portion of any capital gains tax at the end of the year, as the club will file one form stating how the capital gains are distributed. Each member will receive a form called a K1, very similar to a 1099. Each member will file the information from that K1 with their personal 1040 tax return. So, as you can see - actually forming your own investment club is rather simple once you layout everything you must do and agree upon early into the venture. 7 Easy to Follow Steps To Creating Your Own Club 1. Choose your members carefully2. Agree on the size of the club3. Establish bylaws for the club4. Choose a name for the club5. Apply for your clubs Federal Tax ID number6. Open your clubs brokerage account7. Treat the club as a serious partnership, keep records, meet regularly and enjoy the experience of learning to invest as a group. Because this is our first official investment club based on the strategies of the eBook. I'll keep you all informed in upcoming issues as to our overall gains and networth. In fact, I'll more than likely add a section to this newsletter appropriately named for the updated status of the club. Article Tags: First Investment Club, First Investment, Investment Club, Each Member, Investment Clubs