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Answer:
Dear
BuyandHolder,
There
are two possibilities here - the newer "money club"
and the long-standing more traditional "investment
club."
Investment
Clubs
We
covered investment clubs in several previous BUYandHOLD
columns. In this type of club, a small group of people
meet monthly and pool their money in order to buy
stocks. Club members do their own research (although
some occasionally ask for advise from a stockbroker)
and decide what to buy and when to sell. Investment
clubs often serve more as a learning organization
than as a money making group. However, over the years
plenty of clubs have made impressive amounts of money.
If
this type of club is of interest to you, click
HERE to open an Investment Club account at
BUYandHOLD. You can also go directly to www.better-investing.org,
the site for the National Association of Investors
Corp., the organization that oversees individual investment
clubs.
Money
Clubs
Money
clubs are a relatively new arrival. You will find
them all around the country -- not just in major cities.
They are equally popular in rural areas, suburbs,
even on college campuses.
The
typical money club focuses on a personal financial
goal, such as: how to save more money, how to spend
less, how to get out of debt, how to write a will
and health care proxy, how to start a business. Some
tackle retirement issues. Estate planning and trust
funds for children and grandchildren are also popular
money club topics.
Think
of a money club as both an information gathering experience
as well as a support group -- a pooling of ideas along
with a rooting section. Members not only listen to
experts and share ideas but they also encourage fellow
members to keep on track, to meet their financial
goals and to improve their money management skills.
The
driving force behind these clubs is that by expressing
one's goals in a "public" forum, one is encouraged
to meet that goal, rather than suffer the public embarrassment
of doing nothing.
Money
clubs, however, do not focus on buying stocks
and bonds.
Clubs
vary in size, purpose and membership. There are clubs
for women only, men only, college students, retired
people or for those with serious debt problems. Most,
however, fall into the category of "general."
To
find a money club
I
recommend that you check with your public library,
community college and Y for the names of possible
local clubs. If you don't find one that appeals to
you, go to www.MoneyClubs.com
where clubs are arranged on the site by type and geographical
location. Take time to look at specific club guidelines
and curriculums. You might want to download several
to eventual use at your meetings.
Another
helpful source is www.meetup.com.
Setting
up a money club
My
suggestions are very similar to those I've given for
investment clubs.
1)
Be clear and very specific about the topic and focus
of the club. You will want to join one that matches
your goal or goals. And, make certain potential members
are aware of its purpose.
2)
Stick to a set time. Do not vary your meeting
date. If it's the first Tuesday of the month at 6
pm, keep it that way. Avoid Monday, as many national
holidays fall on that day.
3)
Announce meeting places in advance. Many clubs
gather in members' homes or apartments on a rotating
basis. If that is not easy to do, pick a coffee shop,
community center or meeting room at your local library.
4)
Adhere to the number of members. Too few people
will lead to too few ideas and a sense of repetition.
Too many people can create: (a) an unwieldy, uncontrollable
meeting atmosphere; (b) an intimidating feeling, with
only the more aggressive members speaking up; (c)
a party atmosphere.
The
ideal size is 12-15. You may want to widen that to
20 to accommodate for those times when several members
may be ill, on vacation or unable to come for business
or family reasons.
5)
Select a competent leader. He or she should not
be plagued by personal financial problems, but rather
have the answers to such problems.
6)
Set up an award system. When a club member reaches
a financial goal (reduces credit card debt, saves
a previously stated amount of money, writes a will,
draws up a power of attorney, etc.) note the occasion.
Some clubs hand out certificates of achievement, others
give the "winner" a book or take the person's picture
shaking hands with the leader or club president and
then frame the photograph.
A
word of caution: Some clubs are free. Most charge
a modest monthly or annual fee. Beware of those asking
for sizeable amounts and that are run by someone who
has a product to sell.
Good
luck!
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