Many people stumble upon the idea of starting an investment club but never take action because there's not a good one stop shop source for good information on starting and running one. One article can't fulfill that need but hopefully you can get enough information to hit the ground running. Let's get started with the basics of what an investment club is all about and how it should operate.



An investment club is a great idea for running your own business. All investment clubs need to be registered with NAIC or the National Association of Investors Corporation. Setting up an investment club is really easy and doesn't require you to expend much capital. Typically, an investment club has 10-15 members and each member is required to pay around $20-$50 per month as membership fee. Start up costs for an investment club can range from $400 to $800. But the profit or earnings that you can make from starting your own investment club are huge – from a modest $5000 to $20,000 annually with one club, $25,000 to $100,000+ annually if you own five clubs or more depending on the number of members you have!

What does an investment club do?

Investment club is a really a group of people who come together with the singular aim of learning how to invest in the stock market. These people are known to each other and could be friends, family, colleagues, neighbors etc. Your investment club offers the people a safe and easy opportunity to make money without knowing how to. Your club and invest either in shares or real estate or bonds etc. Usually, most investment clubs prefer to invest only in one type of financial instrument. Where do you get the money to invest? Simple. Your club members pool in the resources and in return receive expert advice on how to invest, when to invest, and why to invest. If you run the investment club from your home, you are paid a fee for all your hard work.

How do you run an investment club?

Once you have started your own investment club, you will have to ensure it is profitable. For this purpose you will require members. Advertising in various newspapers and financial magazines is a good way to attract people to your club. You can even advertise on the Internet. As part of your office setup you will require a desk, a computer, a phone, a fax and a printer. On the days (once a week) that the members of your club meet, you will need to arrange chairs, projector, etc.

How Does an Investment Club Work?

The rules of the club are fairly simple and can be modified if required. An investment club has officers to see the day-to-day operations and these are elected by the members only. Both the officers and the members are required to:

- Attend each meeting (weekly/monthly)

- Pay the membership fee – usually a minimum of $20

- Research and share information by following the progress of specific shares (either already bought by the club or considered for purchase)

Finally, it is important to understand that the success of your investment club depends on the involvement of your club members. As for you, spending a couple of hours everyday on the club's business will help you build good profit.