Not Enough Money to Invest? Join or Start an Investment Club

November 26, 2007 By Debbie Dragon

Most investments have minimum requirements. Sometimes the requirements are outside what a person can comfortably afford to pay. Rather than throw your hands up in the air and decide it’s not possible for you to invest, you should consider an investment club!

An investment club is a group of individuals who get together, either physically or through online resources, to share investing experience and pool money together into various investments. The benefits don’t stop there, however. Not only do investing clubs allow people to contribute smaller amounts of money and still earn a return; but they are a wonderful learning experience where a new investor can learn the basics. Through the combined efforts of everyone in the club, there is more potential for growth because you are able to invest in stocks that as an individual you may not be able to afford.

Investment clubs offer a way to afford the creation of a diversified portfolio even if you haven’t a lot of money to invest. How much does it cost to join an investment club? It all depends on the group you join. Some groups require each member to contribute $20 a month while others may expect $100 or more. If you are joining an existing investing club, just be sure you understand the requirements and where the money is invested before you make any commitments. If you’re looking to start your own investment club, you can decide how many members your group will have, and how much you’d like to invest each month, then divide the total by the group members.

 The advantages of starting your own investment club include the ability to hand-pick who gets to join! If you feel better knowing who the group members are for instance, rather than pooling your money with strangers, you could set up a club with co-workers, neighbors, friends or family. The disadvantages of setting up a club on your own means you don’t have the experience or support of people who already know what they’re doing!

You don’t have to go at it alone, though, even if you decide to start an investment club. Joining a website like www.better-investing.org; which is designed to bring people together in clubs provides many resources for selecting investments and managing your club.

Posted in financial plans, investing