What is Investment Club?

by Santosh Das | Last Updated On March 23, 2023

Understand What is Investment Club. Are there any Investment Clubs in India?

Understand What is Investment Club. Are there any Investment Clubs in India? What are Structure and Rules. Any App or Software?

What is Investment Club

Table of Contents

What is an Investment Club?

An investment club is a place (Online or Offline) for investors to discuss ideas and opportunities. Investment clubs are good for individual investors who need to discuss investment ideas and generate money for investment. Members of investment clubs can either discuss investment ideas and / or pool money to invest in stocks, mutual funds, bonds, securities and other Good Investments Options for High Return.

Understand:

Benefits of Investment Club

Fund: An individual may not have enough fund for investment. An investment club can collect fund from members and invest in diversified investments and make better profit that can be shared among members of the club.
Knowledge: These clubs widen knowledge base. Members discuss their ideas and experiences that increases knowledge. Members can learn from practical experiences.

Starting an Investment Club?

It can be formed by family members, colleagues, friends and even society members.

Here are the steps to form and start an investment club?

Send emails, SMSs, Whatsapp Messages or memos to people whom you want to join the club. Mention a date, venue and agenda for meeting.
In the meeting, discuss about investment goals, risk profile and fund needed.
Assign jobs like Fundamental Analysis of a Company, research, picking right stocks to buy etc.
Make rules for joining and leaving the club.

Once all of the above are done, the investment club is ready.

Investment Club Structure

#1.	Potential Members
	The first thing to do is to find potential trustworthy members. The ideal size of such club is 10-20 members. In order to find only SERIOUS and DEDICATED People, there can be some initial JOINING FEE and then some Fixed Monthly Contribution. Ask following questions: Can they be trusted with money? Will they contribute on time? Will they provide any valuable input to discussions and research?
#2.	Organizational Structure
	After Step #1, it is Time to Agree on Following: Club Directors: President, Vice-President, Treasurer, Assistant Treasurer, Secretary. Time and Place: Decide a time and place for meetings. Basic Rules: Setup basic rules for the club. Book Keeping: Maintain proper records of all financial transactions.
#3.	Legal Structure
	Generally a Partnership Agreement is the Basic Legal Structure of such an organization. Any Good Professional CA or Lawyer can help you with this.
#4	Common Meeting Agenda
	Fix common agenda for every meeting. It can be: Where, When and How Much to Invest? Discussions and Presentations. Research and Analysis

Are there any Investment Clubs in India?

I know of 4 investment clubs in India:

Kolkata Investors Club
TradeGyani – Social Network for Investors in India
Meetup – Mumbai Value Investors Club
Chennai Investors Club

Additionally, there are investment club app that you can download from Google Play Store and Join.

Investment FAQs

What Investment Means?

Investment refers to putting your money in an asset with the aim of generating income. Examples - Mutual Funds, Stocks, ULIP (Unit Linked Investment Plans), Endowment plans, Bonds, Bank FD. The motive of investment is to increase the value of your invested money. Learn More - What is Investment?

What is Investment and its Types?

I have already Explained it Here: Types of Investment

What are the 4 Types of Investments?

4 Types of Investment are:

Growth Investments: These are long-terms investments for capital appreciation. Examples - Growth Stocks, Real Estate Property.
Defensive Investments: These are Low Risk Regular Income Generating Investments. Example - Cash Investments and Fixed Interest Investments.
Cash Investments: Defensive Investment. Examples - Savings Bank Bank A/Cs, Term Deposits.
Fixed Interest Investments: Defensive Investment. Examples - Government Bonds.

Stock Market Sectors - 4 Major Sectors and 11 Sub Sectors

How do I invest my Money?

Decide on the Type of Investment you want to make - Growth (Long-Term Stocks or Real Estate) or Defensive (Cash or Interest Investment).
In order to Invest in Real Estate Property, you will need huge finance.
For Investment in Growth Stocks, you will need a Demat Account with a Trading Account linked with a Bank Savings A/C.
For Cash Investment open a Bank FD to earn Interest.
For Fixed Interest Investment, buy Bonds.

How do Beginners Invest?

Beginners can start with Low-Risk Investment Options such as Mutual Funds via SIP or Cash Investment such as Bank FD. Once they gain knowledge and experience, they can shift to much complex Growth Investment Options.

What is Difference Between Savings and Investment

Savings	Investment
It the money you set aside from your income for some particular goal like - Emergency, Education for Children, buying a car, tour or travel etc. No Risk, Less Growth.	Putting your money at a place to allow it to grow and provide returns. Returns can be used for bigger financial goals like - Buying a house, higher education for children etc. High Risk, High Return.

Types of Investments Based on Risk Profile

Low Risk	Medium Risk	High Risk
Less-Risk, Less-Returns. Examples - Govt. and Corporate Bonds, Treasury Notes, Bank FD.	Moderate-Risk, Moderate-Return. Examples - Preferred and Utility Stocks, Income Mutual Funds.	High-Risk, High-Returns. Examples - Equity Investment, Mutual Funds, ULIPs.etc.

Life Stages and Investment Plans

First Job: This is First Stage and START of investment journey for Beginners. Since, you have limited income and savings, you need an affordable Investment Plan that does not require Lump Sum Money. Few good Investment Options for People with First Job are - SIP in MFs, ELSS (equity-linked savings scheme), ULIPs and Term Insurance.
Marriage: This is the second stage of life. You need to focus of family planning, healthcare and other long-term goals. Few good Investment Option for people in this very important stage of life are - Personal and Family Health Insurance, PPF (Public Provident Fund), ULIP (Unit Linked Insurance Plan) and NPS (National Pension Scheme)
Child Birth, Buying a House, Children Education: This stage of life demands long-terms Investments to make life secure. Few good Investment Options in this Stage are - ULIPs and Savings Plans.
Retirement: This is the 4Th stage of Life and Investment. You cannot take high risks. Investment must be safe and secure. Few good options are - Money Back Plans, Bank FD, Immediate Annuity Plans and Unit-linked Retirement Plans.

Learn:

Conclusion

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