$ The Eight (8) Guiding Principles of Successful Investment Clubs in Zambia

 

The following are the important succes

s factors of investment clubs.

1.     Education/Literacy

Knowledge is power; and information is the best insurance, and the best strategy against risk. The more informed the members are on matters financial; the more easily they will trust financial advice. Hence, the club ought to learn through guest lectures, member readings, etc.

2.     Meeting Attendance/Networking

The 17^th century poet John Donne observed that, ‘no man is an island, separate unto himself’. The club must meet; it is through meetings that decisions made are owned. The meetings provide networking avenues, and chance to have fun together; learn together; and volunteer, together. Meetings will also foster team work, ensuring the club operates as a unit, with everyone having responsibility; and leadership rotating.

3.     Saving & Investing

An investment club is not a bank. The purpose of the club is to pool money to invest, not just pooling money, hence, member must save money regularly, and the club must invest the money. The constant and regular savings generates confidence that the members are doing something purposeful with their money, but this is only achieved when there is consequent investment of the saved funds. The club should invest regularly, and not hold contributions for long before investing. The club should practice the fundamental principles of investing as herein outlines in the Rwoth Ramogi 9 Fundamental Principles of Investing. (See Table of Contents)

4.     Leadership & Management

Everything rises and falls on the leader; indeed, when the center cannot hold, things will fall apart. The club must have skilled leaders to inspire the members, and manage the resources, through, inter alia, effective record keeping, confidentiality, and smart decision making. Books should be kept to record, amongst other things, member’s monthly subscription; portfolio performance; investment transactions; and performance reports.

5.     Leveraging ICT

The Club should apply ICT for efficient operations, and effective running of activities, through websites, accounting software’s, and club management applications. 

6.     Setting & Achieving Goals

The club must set and achieve financial goals to offer inspiration to members to continue participating. The club needs to achieve its investment goals, as this will build confidence and encourage participation of members in savings and meetings, and other club activities. All profits, dividends, and interests, should be reinvested to benefit from the rule of 72, the law of compound interest.

 

7.     Commitment/Determination

Rome was not built in a day; and a journey of a thousand miles begins with one step. Members must be committee to the club. The members must persevere! However, since, the more money people make, the more they are keen to keep, it subsequently follows that the best way to reinforce commitment is through success stories: investing in high return projects, so that people see success, and become committed to more success.

8.     Simple (and clear) Rules & Procedures

The club must have rules regulating every activity done by the club, and they must be simple. The rules indicate rights and responsibilities of members, and ensure confidentiality of club activities. In essence, the club must be a legal entity. These rules are found in the club constitution, and the legal documents used to register the investment club. Everyone should have the rules, know the rules, and follow the rules. I will remind my team that,

 

“…the easiest way to avoid upsets, collisions and disharmony in any club is to take the time to make sure that everyone is playing by the same rules”

 

The club should have an operational plan, so that every particular activity is clearly indicated, as clearly, as possible.

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ZANAICA is promoted and hosted by Twende, an on-demand platform and Zambia’s first superapp, that also offers motorcycles (bodabodas) and tricycles (tuktuks), on lease to own, hire purchase model. Twende promotes investment clubs as an initiative to promote savings and investment culture in Zambia. To get free investment club training, do not hesitate to contact us on facebook at https://wa.me/+254103242604, or https://chat.whatsapp.com/HNosGG0OmdWHvXnFHVSLoh or email us at zanaica@twende.store or visit Twende offices at Manda Hill, Plot 271/C.

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