Financial Freedom? Try Investment Club

In my last article on savings, I lay emphasis on cultivating the discipline first no matter how small your income. I also suggested you ensure it is deducted before you receive your pay and many other advice basically to take control of your personal finance. You can read the article in details here;
I understand how difficult it is to discipline oneself not just in times of money even our health which is very paramount. But when you are finding it difficult to self-determined to plan towards achieve your financial dream, one of the best option is to join an investment club or rather create one with people of like minds among friends, family and neighbour.

Let me assume you never here the term ‘investment club” before but as the name indicate, it is a financial concepts of 2 or more people coming together to achieve their dream of financial independent by contribution an agreed sum of money regular and on a weekly or monthly interval to put it in a money generating activities, assets or instruments.




Benefits of Investment Club

First, investment club makes it easy to cultivate savings culture when you realize you can start earning an extra income although not for immediate consumption. It also instigate you to compete towards a rewarding course making savings and investment fun instead of strenuous.

Personally, it may take some months or up to a year or more to save enough that you can channel into investment. With investment club, this period is drastically reduced depends on the activities, assets or investment you agreed to go into. In some cases, it could be immediately, I mean with your first contribution or less than a month depends on the number of members or the sum contributed. This way, your money starts working immediately.

With investment club, your journey towards becoming informed investors will begin earlier than expected. And you could in short time learn about money management, entrepreneurship, business management and many more with professional knowledge about an industry or more. The reason is because; one major benefit of investment club is learning which is expecting to be part of your weekly or monthly programme.

Investment club is a good concept to create lucrative jobs for the members. Instead of working in an underpaid job, you could start an investment club with the aim of starting a small business. By the time the business started picking up. Members could take over the leading roles which also give the business the opportunity to grow faster.

You may loose more than enough with try an error in the process of investing your hard earned savings or pay so much in expert advice with little to show for it. With investment club, the saying of “two good head is better than one” is on of the benefit; Decision making require member brainstorming and when face challenge there will be team to whether the storm together.

There are more benefits of investment club. But the chief aim is to achieve financial freedom. As a result, apart from any member receiving salary if managing the club business, you should avoid taking out anything from the business until you achieve the ultimate goal.




Forming an Investment Club

If you are well convinced on the concepts and benefit of investment club and you can not find one or suitable one around you, then the best option is not to give up but to create one yourself. You may need further information or help but the following should be handy enough to get you started;


Coming Together of Like Minds: Talk to relatives, friends and neighbours who will buy the ideology of investment club. Preferable put it together in a printing form and give it to them to digest after talking to them.

It is not compulsory if none of you know about stock market, Gold, Oil, real estate investment or starting a business etc. You will learn gradually from a good broker and by inviting professionals in the field of your interest to educate you regularly.

Preliminary Meeting: If possible schedule an introductory meeting as part of the information available on your printed materials where all interested party will dialogue and agreed on modus operandi (mode of operation) which may include club name, type of business to start with and to venture into in the future, meeting days and time, amount to invest weekly or monthly by members etc.

Legal Structure: You will need to consult an attorney, accountant and tax expert to determine the legal structure and tax implication of the form of investment club you are to register with Corporate Affairs Commission (CAC) and other necessary financial bodies. If possible, you could register the club separately and that of the business you are going into separately.

Appoint or Elect the Executives: Someone have to lead, you need to select or elect executives among you which should include; President/Chairman, General Secretary, Financial Secretary, Treasurer etc

It is also important to have some committee to work with the executives. For example, Education Committee to find expert and materials to educate the members during meetings, Investment Committee to research on investment interested by members  and many more.

In most cases all members have a role to play in investment club, most especially when it come to researching investment which is a good way to learn how to invest as the major aspect of being part of the club.

Social or No Social: You also have to agree on the level of social activities that will be taking place after club meeting, quarterly, biannually, or annually since we all believe that “all work no play make jack a dull boy”.





Usually, investment club is characterised with regular monthly investment contribution and any member who fail to pay at due date is liable for additional percentage as a fine. This is meant to discipline members towards achieving the set goal which is the major aspect of achieving the state of financially free. Although not advisable, but you can choose to go flexible, given members the opportunity to invest above or below a specific amount, but this will not help majority of the members.

Irregular member might be forced to withdraw their investment both in time of attending monthly meetings which should include training and in term of meeting up with their monthly contribution. Member can choose to voluntarily withdraw after notifying the club in written at the right time as agreed upon. Member can also transfer their investment and membership to another person subject to approval by majority of the members.

Before I end this, be aware that starting an investment club could be challenging. You need just one more person to commence while you keep looking for other people who share your view.

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