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Community


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Online Share Trading

Engage and learn about markets and trading online

Setting up an Investment Club...

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DCTrader
Super Contributor
Need some advice... what's the best way of going about forming an investment club with 10 guys. Initial investment then monthly contributions. CC/Partnership/Trust? Need to consider tax implications, etc etc.
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32 REPLIES 32
samoa
Super Contributor
S**T, you looking for trouble!
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SimonPB
Valued Contributor
if you want to pool money; speak to a lawyer and an accoutnant first. If just to share ideas - make sure everybody very well understands the risks and disclaimers.
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DCTrader
Super Contributor
G, be more ominous guys... we'll have buy in and exit clauses etc etc. Would a CC be the way to go?
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Blik
Super Contributor
Hello DC - myself and a mate tried this a few years ago, and found a whole heap of trouble with people pulling out, wanting to join at odd times and generally fighting over which shares to buy. But possibly the most frustrating aspect was which vehicle to use - CC, partnership or formal club. We would have gone with a formal club, with a signed partnersjip agreement, but the club fell through. We are now planning an informal club, pretty much like the chat forum here, but we meet locally and discuss our own investment strategies or whatever is the topic for the meeting.
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SimonPB
Valued Contributor
blik, that generally be best. A loose grouping of people who meet every month or so. We used to meet at teh edward first monday of every month, sometimes lots of people, sometimes just a few and sometimes we mostly discussed rugby. But it was great fior sharing ideas.
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Dabbler
Occasional Contributor
Where would you hold the assets as a club? Surely you need a proper vehicle to do that? What brokerage house would open an account on an agreement? Curious!
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SimonPB
Valued Contributor
if you plan to have assets you need a broerage account and that means a partnership, cc, pty or trust. First one is a massive head ache, the others only lightly less so, so fotget assets and share knwoledge/ideas.
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Not applicable
Form a cc with all members sharing equally in profit and loss.
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Blik
Super Contributor
our investment club was as much about meeting new people as talk about investment, so rubgy chat isnt a bad thing - although we did have formal agendas and topics as well and minutes that had to be taken, so I would carry that across to any informal club, to maintain a sense of seriousness I guess. When we started the club, I knew absolutely nothing about shares, and that got me started. Now I only know a little bit, but maybe by the time I am 50 I will know a bit more and can hopefully retire. Thats the plan at least.
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SimonPB
Valued Contributor
but then what when person A wants to add money, or remove some or all? Years ago some chaps did a pty with pref shares - but still a mission.
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CE
Super Contributor
Just subscribe to RHPS...he he
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dilligaff
Super Contributor
Form a Partnership, since that way you avoid incurring Audit Fees. You used to be able to download one (and other related docs) from BJM's site. Try the 1000 day rule. Could share our docs and experience with you for a beer :)
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Whatsup
Contributor
The concept of investment clubs is great, however the dynamics of dealing with the club members is a little more sobering. The suggestions of investing on your own and having an informal gathering to discuss shares/ investments is good. Perhaps try running a watch list on this site with everybodies input to gauge whether you could work together before formalizing anything. I can promise you that you will find that everybody comes with their own agenda's and also their own needs and heaven help you the day the market turns, your "friends" will change overnight.
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Clembo
Contributor
Good fun in rising market - enjoying red wine and pizzas at meetings. But recriminations when it nose dived made the whole thing a bad memory. I far prefer this - forum - seminars etc and profit's all mine! Maybe I'm not a team man.
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john_1
Super Contributor
That what I thought this forum was, a place to meet and talk markets and hang out with the guys and the occational Russian bride.
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DCTrader
Super Contributor
Besides all the emotional issues like friends going haywire like BabyBoy today... surely there are benefits like pooling your funds etc in order to invest in certain things not previously possible? If you win or lose, that's what you sign up for at the beginning of the club and ito the agreement.
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dilligaff
Super Contributor
http://www.bjmdirect.com/scripts/jetapi.dll?pagename=1InvClubArt&artid=775840&sessioncopy=3642997699... Its about everyone's intentions at the outset - beer & pizza or beer & pizza and pooling up to make some money and have FUN
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Enzed
Frequent Contributor
Go to Moneyweb & search for TICN. Lots of work & discussion has been done by then.
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barry_1
Super Contributor
And then at one meeting a bloke will walk in with a grim smile on his face,take out a revolver,shoot every one present,before turning it on himself and blow his own brains out!In a real market crash perhaps?
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