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Publication date for The Money Club is 1 August 2007


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"I was invited to join by a close friend ...it seemed the safest way for someone like me whoís very mistrusting of the financial industry to explore it - amongst friends."
SIN member

DID YOU KNOW?

Australians top the world in share ownership, Figures released by the Australian Stock Exchange show that 55 per cent of Australians own shares. Thatís one in two Australian adults who are shareholders - either directly or indirectly through a managed fund.

Investing in shares is now possible for most people. An investment club is, of course, the perfect way to do this. Pooling your money will give you greater investment choices and enable you to afford a diversified portfolio much sooner than you could manage on your own.

Finding your members

The first step to forming a successful group is to mention the idea to friends, colleagues and acquaintances - you will quickly discover who is interested in taking part. It is not important that potential members have prior experience in investments or shares.

The primary objective of your club may determine the mix of people who eventually join.

How big should your club be?

When we began recruiting for our club, the plan was to have ten members. Meetings were to be held in our own homes and ten seemed manageable, and for calculation purposes it was an easy number to work with. Four to twelve members would probably be easier to manage in terms of administration and meetings.

The length of our meetings has not changed - we try to stick to two hours to cover the business, then casual conversations can begin for those who want to stay on.

Bear in mind that if your group has more than 20 members, you may then be required to issue a prospectus under the Corporations Law - this is not recommended as it is a very legally complex and costly process. The realistic maximum number for an investment club therefore is 20.

How often should you meet?

Based on our experience and that of other clubs, once a month appears to be the ideal frequency for meetings.

Choosing a name

We chose Sheba Investment Network. Once you have reached an agreement and are happy with the name, you will need to check the name has not been registered by someone else. The government offices which register business names in each state will not let you register your name if there is an existing or similar name already registered.

Working out your investment strategy

It is a good idea to try to determine your strategy at this early stage - are you committing to your club for a short or long time? Do you wish to be speculative or look at long-term investments? These group and individual objectives form the basis of how you will all work together.

"Itís given me an insight into how much activity goes on by traders as opposed to investors, and understanding that distinction. The sharemarket is very different to what people think, itís not just buying BHP shares when youíre 21 and retiring on them."
Lisa, SIN member

QUICK START YOUR MONEY CLUB - Itís easier than you think!

Click here - only $69.95 inc GST

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