In this Ren Men Chat we discuss our newly formed Investment Club.
A quick rundown of the chat:
- What is an investment club?
- Why an investment club?
- How we benchmarked the idea of an investment club
- How to start an investment club
- Link to our by-laws (feel free to ‘benchmark’ them)
- We’ll keep you posted on the dealings of the investment club
{ 2 trackbacks }
{ 25 comments… read them below or add one }
Absolutely great idea! (both the new “Chats” and forming an Investment Club)
I’m not surprised that many of your friends and family were eager to jump on board. Several of my friends have mentioned an interest in something like this over the years as well.
Was there supposed to be a link to your by-laws?
Will you be incorporating your Investment Club?
For the “Chat” format. Again, just a fantastic idea. The full episodes are fun and fast paced but every once-in-awhile I feel like it would have been very useful to drill down a bit into even more detail or expand on a thought and some of the potential associated topics which might get cut to keep the pace and fit your time constraints. I look forward to more “chats”!
Video Reply from The Ren Men
Link to by laws coming.
LLC
Fun to see but thought I’d share a few things to consider.
The club will have expenses which dues go to pay. Leftover dues can certainly go towards investments, but the feeds can sometimes be substantial for things like incorporation, lawyers, information gathering fees, etc.
Also, undoubtedly there will be members that disagree with the group and will want out. The stress of a few bad investments can really break a group up. I’ve seen a few occasions where the group splinters so much that information is not shared as honestly as it should and ultimately friendships are broken.
We’ve built an investment club where funds are not shared, but information is shared. Each month the meeting is about what each member has found out in their own research (good or bad) and how they’re doing with ideas from the past.
Any member can always duplicate another member’s investment with whatever amount of money they want. This is easier to manage, less formal and more fun. I recommend you take the easy route and develop a group that meets monthly to discuss ideas, rather than a ‘president’, ’secretary’ and a bunch of by-laws which may ultimately end some friendships. Less is more.
it might seem like you’d lose some intensity doing it this way (not get the right people to join, put off homework for another week, people not as into it as others, people not wanting to pull the trigger on deals, etc), but I could see how you could lose some friendships with it.
I would personally be looking for intensity in an investment group. I believe this intensity would be easier to find in something more structured and exclusive with the rules and limited membership. I’m sure it could go either way, it probably depends more on the original members than anything else.
I cannot however argue with Less is more. I got nothing. You win.
My disclaimer is I haven’t participated in an Investing group so I literally have no idea what I’m talking about. I just find DScottG’s comment interesting.
I agree with both DScott and Jared!
I like DScotts ideas and i think it can be meshed with Jared’s. For instance everyone gets together to discuss there investments. [Everyones own money] but you keep track as if it was everyones so you can keep it like a competition.
Values are calculated by money in and what is made or lost.
In addition to your own investments you pay dues. This pays for food/etc… but with the extra you could have a parlay investment running with everyones money on the side that would be jointly held by the club.
Just a thought!
RR
Video Reply from The Ren Men
Great idea. We love that it doesn’t reward unnecessary risk.
We will bring it to the investment club to consider.
Video Reply from The Ren Men
We agree… intensity is paramount.
This is great community conversation.
Video Reply from The Ren Men
Thanks for the suggestions.
We want members to have skin in the game.
Grant and Alan,
The first thing I noticed in this video is that Grant is enjoying his beverage of choice (Bourbon???) from a coffee cup like the ones I have at my house. Since I’m away from my house today, I have to assume that you flew into Denver last night, borrowed it, and returned to Ohio – Very sneaky. Please fly back to Denver and return it before I make it home tonight if it’s not too inconvenient. Thanks. Oh, and let me know if you want to grab dinner together tonight while you’re passing through.
The investment club is a great idea. It is best suited for those who reside near your corporate office, as geographically removed resources won’t get the benefit of the catered meal (I’m a sucker for getting my grub’s worth).
Personally, I’m more drawn to DScottG’s approach as it reduces complexity. If I were forming a club like this, I’d make it more of a competition. Everyone gets an opportunity to start their own investment account through ING, Scott Trade, Wells Fargo, or some other agreed upon trade facilitator and the competition is to track return on investment as a percentage of total invested. It’s more like a Fantasy Football League for investing. It simplifies the approach, removes a lot of the formality and potential conflict, and adds a component of friendly competition.
That being said, I can appreciate why you would like the flexibility offered by your investment club – For example, you’re not tied to stock investments exclusively as would be the case in my prior example.
Thanks for keeping the original concepts flowing.
Matt
I think it’s not really ment to be a competition though. Cause the people are trying to make money as a whole. I don’t think you will have the same debates as their model. Basically someone will say I’m investing in this, and the others just say “hope that works for you.” With this you would be willing to put some argument into it because it’s your money.
As well, this leads to people doing riskier things to catch up and not really thinking out decisions.
Who even needs to put money in at that point, why not have everyone play with fake money.
There are people already playing the competitive version of this game with real money on Wall street. For me it seems like it needs to be a group pool to make people think about their money better and to actually be willing to really talk about it.
Richard,
You are correct. What Grant and Alan are trying to accomplish is not well supported with a competitive approach, and the open sharing of ideas will likely flow better in their more collaborative ‘one for all and all for one’ model. Their investment club represents a good way to get open information share based on democratic principles and hey, now’s a great time to get started as the economic recovery wheels are (hopefully) still in motion.
Matt
Video Reply from The Ren Men
Thanks for the dining recommendation.
We explore yet another structure for the club.
Video Reply from The Ren Men
Hopefully, having their own money invested would temper members risk taking.
Video Reply from The Ren Men
Lock up those mugs, son.
Fantasy League is great idea, but we want to avoid hypotheticals.
Gents,
Vegas and San Fran, two great places to visit. If you’re in the mood for some good, local seafood, I’d recommend checking out Gigi’s Sotto Mare, Oysteria and Seafood Restaurant located at 552 Green Street – http://www.sottomaresf.com/. Good eats!
Cheers,
Matt
The investment club is a great idea; i was throwing it around with my friends recently in a different light.
I was focusing mainly on real estate, being in the northeast RE is very expensive. I wanted to see if we could combine funds to create almost a mini REIT and invest in larger multifamily properties. Pooling the funds would allow us to increase financing options and allow us to buy larger properties.
Your idea really expands the possibilities as well as opens up the market for smaller more controllable investments and makes it much more enticing!
I clearly havent done the research about formalizing a club that you guys have, but i am curious if your going to explain how the tax implications are worked out. As i see this potentially being something difficult to deal with as well as if you formed an LLC or some other form of corporation.
Thanks
RR
Video Reply from The Ren Men
REIT – very creative idea. (Careful of partnerships.)
Probably going to be a LLC.
A lot of great discussion on this topic!
My thought is that this investment club isn’t supposed to be your sole means of investment. While a chunk of change ($2,500 for the RenMen Investment Club) plus $100/month in dues might seem like a lot for some… For many it would only be a portion that would be turned towards investment. The Club, is a catalyst for thought and debate and the money you include keeps it real and meaningful – you are figuring out what to do with YOUR money… but the real benefit isn’t whatever profit you get out of the clubs investment but in the discussions and learning you do… and which you can take advantage of with your OWN money outside of the club.
Anyway, like another poster already said, Less isn’t more in this case and I’ve never been a member of an investment club so… YMMV.
Video Reply from The Ren Men
Investment club is a grand experiment.
Hey REN MEN you guys talked about WHY NOT….
I love this, i always think/say it when i am deciding on an investment/business/re deal….anything that is entrepreneurial….
I discovered this awesome site that provides high level lectures and courses in a youtube format called http://www.academicearth.org
Here is a link to a lecture about WHY NOT!! Great Video – Must See
http://www.academicearth.org/lectures/why_not
RR
Rich,
Great link – I had heard about this website in the past but hadn’t taken the time to visit it. I’ll definitely watch some of the lectures/courses in the near future. Thanks for sharing!
Matt
Video Reply from The Ren Men
WHY NOT!
Rich – Lovin that site, thanks for the link. Also a TED watcher and FORA.tv – both are great things to throw on in the background while working. Will be adding that to the mix for sure.
Have to say I have issues with the Why Not. And it’s not really the question itself but who is wielding the axe. Being a web dev guy, almost everyone I know comes to me with ideas for websites and while probably 75% I can shoot down just off of what I already know about what’s out there the other 24% would take time for me to shoot down (the other 1%, actually even less then that, are actually decent ideas that deserve real research.)
My standard response is, “Why? Have you looked at what else is out there and seen there is actually a need for this thats not being yet?” The real answer is NO, but they will never fess up to it.
SO many come back with the “Why Not” BS response. “Why not” only works if you are well versed enough to actually be able to have a real response to the “Why.” I think a lot of those “Why Not” type questions would be smashed by just a little research on the askers part.
Though, this is probably more just a problem for me as everyone and there brother thinks they have the next greatest idea for a website when it’s already been done and better then they could have come up with.
Video reply from The Ren Men
Little confused on the first part, did you think I gave the first link? I know the Rich and Richard can be a bit confusing even to me
Also, I wasn’t calling you guys out on that as you guys seem to have the ability to wield that Axe of Power.
“Why not?” is one of those sayings that kind of needs and * on it that says, “* Only usable by people who are capable of understanding what they are asking” but the problem is even those people who should not be using it think they are also those who should, but that’s a WHOLE different can of worms.
But seriously if I thought you guys weren’t capable of asking it the right way I wouldn’t be here giving you feedback all the time. Don’t take it so personal.