Here are 7 tips to starting a stock investment club successfully.



1. Learn about stock investment clubs by visiting or joining existing ones. This will give you first hand knowledge of how a club operates. You can also get acquainted by reading books that offer practical guidelines and advice on starting, joining and running an investment club.

2. Talk to others who have been involved in a stock investment club. Chances are they would have some ideas and opinions on how to start a new club. Look for online advice as well.

3. You can advertise your club through local papers or by posting notices at local shops. Ask friends or family to join but be aware that sometimes money matters can cause stress in personal relationships. So, lay out the ground rules ahead of time. Decide on how large or small you want your club to be. Small clubs are more manageable and fewer members come to an agreement more easily. Larger clubs have more money to invest.

4. All stock investment clubs must have proper plan and rules of operation, including how money will be handled and what happens when someone needs to withdraw their money. Make sure there are policies in place for circumstances such as when members wish to quit or when they fail to pay their subscriptions. Working these issues out ahead of time will save lots of stress later on.

5. Get organized. Determine where and where meetings are to be held. Establish roles (president, vice president, secretary and treasurer) and monthly contribution. Most investment clubs are set up in the form of partnership as this is the easiest way to deal with taxes. Complete relevant paperwork relating to business registration, partnership formation and tax. Open a bank or brokerage account. Choosing a discount broker means paying lower commissions. Full service brokers charge higher commissions but can provide some investment advice and guidance.

6. The main aim of a stock investment club is to educate its members. Find investment experts who are willing to speak at your meetings. Have Q&A and discussion sessions for members to interact with the speaker.

7. Setting up a website for your stock investment club can serve useful purposes. Members are kept informed of news, meetings and activities. A forum on the website allows members to ask and answer questions, and stay connected in between meetings.

An investment club can be a great way to learn about investing in stock. Best of all, you don't need to have massive capital in order to begin investing.