How to Prevent Debt And Save you Money Using Investment Clubs
Investing has long been something that people generally did not discuss amongst themselves. It was perceived as so mysterious and difficult that those without MBAs shouldn't try messing with it, lest they lose their entire nest egg in some silly blunder. Most people just closed their eyes and handed over their life savings to the Suspendered Ones on Wall Street, hoping for the best. Except for a small but growing band of merry investors, that is.
An investment club is a group of people who pool their money to make investments. Investment clubs are usually organized as partnerships. Each member actively participates in investment decisions. After the members study different investments, the group decides to buy or sell based on a majority vote of the members. Club meetings focus on education and each member actively participates in investment decisions.
In most instances, the members of an investment club agree to invest a fixed amount of money every month. Because of their higher value, they typically generate a higher level of return than would be possible if invested separately. Over the years, investment clubs have averaged a higher rate of return than individual investors.
As an example, if you invested $40 per month for a full year the total would be $480. If this money was saved for 30 years with an average rate of return of 11%, the grand total would be $8,924. Alternatively, if 14 people invested $40 per month, the first year's total would reach $7,200. Saving for 30 years with an increased average return of 12% would earn $182,591. Divided by 14, each member would receive $12,172.43. Based on this, each would earn more than $3200 by investing with the club for a single year.