How to Start an Investment Group

Starting an investment group can provide you with a way to invest with others and increase your potential gains. With this type of medium, you can benefit from making larger investments and you can work in conjunction with other investors. Many people like to use this technique because it allows them to network with others and leverage their experience. Starting an investment group involves setting up rules for the club and then engaging in regular administration.

Things You'll Need

• Investment capital
• Computer
• Word processing software
• Spreadsheet

Instructions

1. Find other investors who are interested in the same types of investments as you. Before you can start a club, you have to find other investors who are willing to invest. Start out by talking to your friends and family members about your idea. Generally, someone in your inner circle will be willing to get involved with the project. If you cannot find enough people in your inner circle who are willing to participate, you can also advertise your investment club in your area. Using classified ads or other mediums to advertise your investment club can bring in other prospective investors.

2. Set up specific rules for the investment group. To maintain an effective group, you have to have specific rules associated with it. For example, you must have a minimum amount of investment for all of your members. You also must set up rules on types of investments thast will be acceptable for your group. You may even want to get more specific such as entry and exit rules with investments. You may decide to get out after a certain amount of profit or loss has been realized. You also have to set specific rules about what will happen when a member of the group wants to get out of the group.

3. Open a brokerage account on behalf of the investment group. Take the investment dollars from the group and deposit them into the brokerage account. You will have to have a funded brokerage account before you can start investing. Once your account is funded, you can start investing according to the rules that were set forth by your group.

4. Set up a time that you can regularly meet with everyone in the group. It is important to have everyone meet consistently in order to be successful. During the meetings, you need to listen to everyone's ideas about potential investments and what the group should do moving forward.

References

• The Motley Fool: How to Start a Club
• Yahoo! So You Want to Start an Investment Club?