Starting my own investment club for fun and profit is easy. It does not matter whether I am an amateur investor just starting out, or a more experienced investor that wants to expand into more investments, there are people out there who share my interests and goals. It takes four (4) meetings in four (4) weeks, one held each week, for a serious group that wants to invest. Here are certain guidelines on starting my own investment club.

Step 1: Thinking Big (Developing The Idea To Found The Club)

$ Thinking About the Name, Vision, Mission, Objective and Goals

€ Club Dream &Vision

An investment club must have the same dream. Sameness of dream creates harmony in club operations. The dream is what we want so badly, that we are willing to pay any price to achieve it. The vision is the picture of the dream, as if it has been realised. The dream is that which lingers in our mind 24 hours a day. It is something we think about every moment. The power of a dream! Thoreau phrased it well; ‘dreams are the touchstone of our character’. Angelo D’Amico was in agreement when he wrote, ‘if the dream is big enough, the facts do not count.’ Investment clubs are formed by people in the business of investment and business. The purpose of clubs is to make money, not welfare. An investment club is all about business. It is not just a hobby but an actual business venture where we will all be working together on investing our money.

€ Club Mission

The mission of an investment club is to provide a program of sound investment information, networking, education, and support that helps create successful lifetime investors and financially free individuals. By becoming confident and knowledgeable investors, the members are empowered to build better financial futures for themselves and their families. A mission statement for my investment club is a simple way for me to stay focused and aware of the goals that I have set out for my investment club. I will want to write down my mission statement and make sure that each member of the investment club, and any future members, has a copy of the mission statement.

€ Club Objectives

The objective of the investment club is to pool money to invest in another venture to make more money. Investment clubs are a collection of like-minded people who share a common goal and objectives, making smart investment decisions that benefit the membership. Everything is shared-from research to investment choices to successes and failures. The investment club will take my money and use to make more money for me. As club members, we agree on financial strategy and mutually beneficial financial objectives that are strictly adhered to. This makes it easier to select opportunities that are right for the group. The objective of the club is to both educate and pique the interest of members with regard to investments, the world of finance, and the current events in the world around them. The club emphasizes cross-disciplinary skills such as research, report writing, and public speaking. In addition, club involvement also leads to an increasing financial awareness related to common sense saving, budgeting; long-range planning, social networking and goal setting that surely will benefit the club members in the future.

€ Club Goals

The goals of an investment club are to educate members about the world of finance; give them real-life experience in trading stocks, provide opportunities to network with some of the industry professionals, and should they be interested, help them pursue careers in the financial services industry.

The club goals need to be smart.

A SMART goal is one that is Specific, Measurable, Action oriented, Realistic and Time stamped.

Specific – My objectives need to be specific, what exactly do me hope to achieve and why? Losing weight for example is not a smart goal because it is not specific enough. To be successful me need to understand why me want to lose weight and how much me want to lose? Nietzsche said ‘He who has a why can bear with almost any how!’

Measurable – My objectives need to be measurable. I need a way of measuring my progress to see whether I am target. This will allow me to tweak my action plan if needed, to get the desired results.

Action oriented – I need an action plan. How am I going to achieve what I want? What are the necessary steps? What are my daily, weekly and monthly tasks? Goals + Actions = Results. Therefore I need to make a commitment towards implementing my action plan. When I have set my SMART Goal, my actions will ultimately determine my level of success. I will learn what actions are necessary to run a successful network marketing business.

Realistic – Is my action plan and objective achievable? If not I should go back and tweak it such that it is.

Time stamped – I will put a date on achieving my targets and ensure that me remain accountable. ‘A goal is a dream with a deadline’ – Napoleon Hill.

Goal setting with a smart objective from the start helps to steer me in the right direction, however there are additional factors that should also be considered to increase my chances of success. These include the resources that are necessary and the potential barriers which may stand in my way.

£ Goals Need Resources

What resources am I going to need to help me achieve my desired outcome? If I am trying to lose weight for example, I am going to need some advice on my diet and an exercise plan. Additionally it is also important that me timestamp each of my resources. For example if I need a new pair of walking shoes to participate in my exercise program, it is no good waiting 2 months to get them. Setting out a resource list and when I need them can help to keep me focused and on target.

£ Barriers to Success

With almost all ambitions there will be potential barriers to success. More often than not these barriers are psychological and not physical barriers. Regardless of what the barrier is, the trick is to identify these barriers from the start and to develop strategies to counteract these problems if and when they arise. This will again help to keep me focused, on track and further increase my chances of success. Walter Elliot, the prominent Scottish politician who introduced free milk in schools, wrote, ‘Perseverance is not a long race, it is one of many short races one after the other’.

€ Thinking about Club Name

I will also propose a name for my investment club. This proposes name should be ready at the first meeting, so that members can think about it as they prepare for the second meeting ready with several ideas to share for a club name.

$ Thinking About the Legal Form of the Club

Once the mission, the objective and the goal of starting the club is clear, I should then decide whether it is going to be one of eight legal entities as below:

1. Company/Corporation

2. Partnership

3. Cooperatives (SACCOS or Multi Purpose Cooperatives)

4. Nonprofit Corporation (Foundations)

5. Associations/Societies

6. Loose Affiliation/Informal Group (Implied Trust)

7. Trusts

8. Business Name with a Constitution/Sole Proprietorship With Constitution/Single Member Company with Constitution

Though it is possible to be the CEO of an investment club and thus sign up for a sole proprietorship, a partnership or corporation contract carries far fewer taxes and roadblocks to potential fortunes. An investment club partnership agreement is actually the safest and most sound way to go about setting up an investment club, and most clubs are put up as partnerships.

The investment club agreement/constitution is an integral part of every single club out there and an element I should definitely look into. More and more people are looking to invest in various financial products with their friends in a bid to secure their financial future and make their fortune. However, if I enter into any investment club or am in the process of setting one up then I should make sure that my future is well and truly secure, not to mention legally binding! This document will enshrine the bylaws and policies on rights and duties.

Every club needs an investment club agreement for practical reasons as well as legal ones! In terms of the practical reasons why an agreement is necessary, the main one is because it confirms the organization of the individual club and defines the roles that people will play. Although my friends and I may well believe that nothing will go wrong, if I do not lay out the guidelines and rules in advance then I may have problems further down the road.

An investment club agreement is also necessary for legal reasons. It will prevent legal action against any individual member if we follow the agreement to the letter. Not only will it ensure that the interests of the individual members are protected, it will also prevent any form of illegal activity taking place. It will put a series of checks and balances in place to make sure that no one person is in control and that it is a democracy rather than a dictatorship. Similarly, it will prevent legal action against any individual member if they follow the agreement to the letter. Every individual should protect his or her financial future as far as possible and this is the overriding reason why an investment club agreement is essential. If I have agreed on the terms and signed the agreement then I can have peace of mind that my investments are safe and sound within the club, even if I am reliant on the stock market for financial success! Further, a bank or brokerage firm will require registration certificate or approved constitution; Articles of Incorporation; or a Partnership Agreement when setting up an account.

An agreement has to do with far more than simply the agreement between two individuals. All parties need to fill out the appropriate paperwork and the necessary forms to make such a contract truly binding. The following should be observed when designing the agreement.

¯ Agreement to be based on how we want to file for taxes.

¯ List the necessary roles for operating the group such as a president to conduct meetings, secretary to keep notes, Finance Officer to deposit dues and an investor to place buy and sell orders and monitor investments.

¯ Record an initial membership contribution and ongoing dues.

¯ Determine how the club will manage payouts, divestiture or dissolution.

¯ List requirements for gaining new members once the club has started.

¯ Obtain signatures from all members on the agreement.

$ Thinking About Club Meetings & Administration

€ Club Meetings

An investment club has several types of meetings, depending on the structure of the club. These meetings serve different purposes. As a requirement, investment clubs are filled with active participation. From researching stocks and companies to seeking out asset management software and recruiting new members to the group, they are not only a sink of money but also of time. It is important that members of the group are able to attend all meetings. Most clubs meet once a month. When there are decisions that need to be made about ongoing investments and future investments it is important that all members are part of the decision process. If the group decision is held up because some members do not attend regularly, the endeavors of the investment group are jeopardized. At a minimum, a club should have Weekly meetings; Monthly meetings; Special events meetings; and Annual club meetings.

€ Club Administration

An investment club should agree on what responsibilities there should be, and what kinds of officers and members will be needed to take on these responsibilities. After all, even regular, non-officer members have responsibilities. An investment club should have the following officers:

1. Club President

2. Deputy President & Education & Research officer

3. Secretary

4. Finance Officer

5. Social Secretary

6. The Auditor (External)

$ Thinking About Club Membership & Fees

£ Membership

An Investment club is formed by people in the business of investment; people who want to make money. Investment clubs are dedicated for those who are looking for a secondary income; for those who want to get FINANCIAL FREEDOM and FINANCIAL INDEPENDENCE. These people can be people in an institution, fellow employees, friends, family members, clients, colleagues, church mates, or fellow Muslims.

£ Fees

As I think about my proposed club, I also need to think of the various fees that members will be required to pay, and the reason for the figures. I should also put a figure on the various types of fees. These fees are as follows.

£ Registration fee, which is a one of payment, used to cover costs of registering the club, etc.

£ Monthly investment fee, for saving to invest in various investment vehicles or businesses.

£ Monthly dues, which is used to cover expenses of meetings, such as tea, snacks, refreshments, and or facilitating guest speakers, etc. This also covers subscription to associations, magazines, or purchase of reading materials, and networking events payments.

$ Writing The Draft Investment Club Strategic Plan/Manual

€ What is a Strategic Plan

A strategic plan is a list of activities to be performed in order to achieve certain targets, or goals.

An investment club strategic plan is hence a written plan that indicates where the investment club is today, and where it wants to be in a future time, listing the various steps that have to be taken to achieve the milestones.

According to Kotler, a leading strategist and leader,

‘in the strategic formulation, goals indicate what an investment club unit wants to achieve, and strategy is a game plan for getting there. Every investment club must tailor a strategy for achieving its goal.’

The strategy is the ‘what’ activity to be done; how, where, when and to whom.

“the devil is in the details, so is failure and successes.”

-Rwoth Ramogi

Without a strategic framework I do not know where my going or why my going there. So, then, it does not really matter how I get there!

Strategic planning gives me clarity about what I actually want to achieve and how to go about achieving it, rather than a plan of action for day-to-day operations.

The activities are based on the vision, the final picture of what the organization wants to realize; the activities are based on the final destination of where we want to be within a given time; the activities are it is based on the medium term and short term goals to reach that final destination. The final destination is the dream. But I need strategy to reach my dream.

Strategy is king

Indeed, in the words of the Great philosopher, General and military strategist Sun Tzu,

‘Action without strategy is simply the noise before defeat.’

The strategic plan is compass direction. It answers the great question of Peter F. Drucker,

‘What is our investment club business- and what should it be?’

Strategic planning is setting the direction for my organization in a way that helps me identify and take advantage of emerging opportunities.

Strategic planning is about three variables,

RESULTS=ACTIVITIES+RESOURCES.

The process of planning typically involves working iteratively through multiple steps. I will commonly start by identifying results I want to achieve, and work backwards to identify the activities I will need to produce the results. Then, I will need to identify the resources I will need to carry out the activities. At the same time, the planning process generates substantial new knowledge as I proceed, that will cause me to rethink prior conclusions. I will typically need more than one pass to find a match between results, activities, and resources.

To become a successful investor, I should know the importance of a strategic plan, and learn to write one up. I should start with a strategic plan.

The strategic plan is the document that states what the investment club is, what it will do, how it will do it, and the value that it will give to the clients, and to myself as the investment club owner. Further, once the need to raise finance has been identified, it is necessary to prepare a strategic plan. If I intend to turn around an investment club or start a new phase of growth, a strategic plan is an important tool to articulate my ideas while convincing investors and other people to support it.

The strategic plan should also be updated regularly to assist in forward planning.

The very process of researching and writing the strategic plan should help clarify ideas and identify gaps in management information about my investment club, competitors and the market.

The strategic plan indicates who we are, what we want to do, to whom, how, and when. It then indicates how we will know that we are meeting our goals.

€ Sections of Strategic Plan

There are many contents of a strategic plan, which are divided mainly into five (5) main sections, namely,

1. Organizational Profile

2. Investment Club Activities/ Operational Plan/Goals/Objectives

3. Situational Analysis (Feasibility Study)

4. Performance Measurement

5. Financial Plan

In detail, these areas cover:

1. Organizational Profile

This section is attached to the strategic plan, and shows the current status of the investment club, indicating the philosophy, people, products, partners, processes, profitability, and plans.

a) Philosophy, (This Includes The Name, Address, Legal Nature, And Location Of The Investment Club)

b) People, (This Includes Listing Of Board Members, Management, Advisors, Staff)

c) Products (This Lists The Products We Have In The Club, Which Can Include Loans, Savings, Insurance, Etc)

d) Partners, (This Lists Our Service Providers, Including Utility Service Providers, Professionals Services Providers, Etc)

e) Processes (This Lists Our Policies And Procedures In Doing Our Activities, And Includes Credit Policies, Investment Policies, Recruitment Policies, Sales Plans, Marketing Plans, Customer Care Plans, And Investment Club Systems Of Risk Management)

f) Profitability, Listing Clients, Cashflow, and Capital Base.

g) Plan, Listing The Future Growth And Or Exit Strategy.

2. Operational Plan /Investment Club Activities/Goals/Objectives

This section lists the activities that are to be carried out, based on the goals or objectives or targets of the organisation.

Operational plan is the step by step process of implementing the program, and includes the methodology, or procedure, or start up of project, through implementation of strategies, delivery of product, and measuring of performance.

The matrix lists the objective, or goal, followed by activities, outputs, and outcomes.

The budget, or cot of activities, can be inserted at this point.

In detail, the sections include:

a) Goal or Objective: This is the ultimate, final destination being sought. Organizations have generally three to five goals, and these can cover membership recruitment, training and capacity building; investment; sales; branding; networking; and institutional development. The identification and realization of objectives determines the relevance and effectiveness of the organisation, respectively.

b) Activities: These are the specific actions that are taken to fulfil the objective, and they can include training and capacity building; advocacy; purchasing land; research; report writing; etc. They are usually attached to costs element. Activities, and use of resources, determine the efficiency of the organisation to fulfil the resources.

c) Outputs: These are the immediate results of an activity, and they include meetings held; reports published; advocacy campaign carried out; debates; trainings; etc. They determine the effectiveness of the organisation in fulfilling its objectives.

d) Outcomes: The overall result of the activities is the long term, final, wider gain, by the various project stakeholders. This is the main objective, or main, goal, of the project. The realization of outcomes fulfils the sustainability, impact, and reach of the project.

The operational plan/activities, also includes the Growth & Exit Plan. This part of the plan indicates the procedure, processes and activities that will be carried out by the organisation so as to grow, or to exit the market, after realization of initial objectives. These include:

a) Increasing Sales/Profitability/Net Cashflow: This involves increasing the money flowing into the organisation by increasing the gross revenue, or profitability, or net cashflow.

b) Investment & Expansion/Expanding To New Markets/Net Products/ Increasing Reach/Impact/Market Share: This involves increasing brand image of the company, or organization, by increasing market share, or program reach, or impact of activities. This involves expansion of the project.

c) Exiting The Program/Market/Management/Product Development. This involves either the project being stopped, or ownership changing, or the management changing.

The details covered include:

a) Entry strategy:

b) Production plan (research & development)

c) Marketing plan (4p marketing plan, branding plan)

d) Sales plan (sales forecasts, break even analysis)

e) Customer/member retention plan (stakeholder satisfaction)

f) Investment club systems (risk management plan, investment club systems checklist)

The template for listing the objectives activities, outputs, and outcomes, is also the same template for monitoring and evaluation, with a few minor changes, and the template for Mid Term Review (MTR), annual report (AR) or End Term Review (ETR) of the project.

3. Financial Plan

This section of the strategic plan lists the budget of the organisation, that is, the sources, and uses of funds. The budget is based on the implementation plan, and indicates the costs of achieving the said objectives. In some instances, the implementation plan is fused with the budget.

In summary, it lists the following:

a) Cost of project & means of finance (expenses forecast, sources of financing, the offer, claw back strategy/guarantees)

b) Financial Statements (Income Statement, Balance Sheet, Cash Flow Statement)

c) Financial Ratios (Liquidity, Efficiency, Profitability, Leverage/Solvency )

4. Situational Analysis (Feasibility Study)

This section list the factors that might affect the achievement of the goals, and hence, the feasibility of the project.

The analysis looks at various areas of key import to program success, and they include: Social Economic factors; Technological factors; Economic factors; Ecological/stakeholder factors; Regulatory Issues; internal factors of strengths and weaknesses of the organisation; and Competitor Factors.

The key areas for feasibility study, in summary, are:

a) Social-Economic analysis, including life standards, cultural issues, etc, that affects the operations of the organisation. High population growth, leading to increase in demand for services. Culture and lifestyle is changing, and can affect the product. Political stability will lead to ease of doing investment club.

b) Technological analysis, including systems of development, or delivery or product. Technological factors can lower barriers to entry, reduce minimum efficient production levels, and influence outsourcing decisions.

c) Economic analysis/ Gap Analysis/Demand Analysis/Market Analysis/Supply and Demand Analysis, which indicates the supply and demand of the products, and hence ability to sell or deliver the product. Economic factors affect the purchasing power of potential customers and the firm's cost of capital.

d) Regulatory Issues, including laws, policies, constitutional provisions, as well as regional and international obligations that might affect the organisations work. Regulatory factors include government regulations and legal issues and define both formal and informal rules under which the firm must operate.

e) Ecological Analysis/Stake Holder Analysis (all players in the industry value chain, from production, through distribution, to sales).

f) Internal Environmental Analysis/ Rwoth Ramogi 4P Analysis of People, Product, Principal and Property. The internal environmental analysis looks at the competencies, structure, resources and culture within the company. The internal environment comprise factors within the control of the organization, and is analysed using the Rwoth Ramogi 4P Analysis Model, which looks at the people (board, directors, management and staff); product (the quality, price, and delivery); property (fixed and moveable assets); and principal (capital finances for operations as well as machinery).

g) Competitor Analysis. An analysis of the competitors, their product types, production processes, pricing, promotion, distribution, and value proposition.

5. Performance Measurement

The purpose of any activity is to produce results. The strategic plan has a section that lays out the plan for monitoring and evaluating the results being achieved for comparison with the intended results.

The areas of performance measurement include:

a) investment club performance,

b) staff performance matrix,

c) strategic plan review,

d) implementation matrix

The result of performance measurement is the:

¯ Evaluation Report,

¯ Mid Term Report (MTR),

¯ End Term Report (ETR), or an

¯ Annual Report.

Step 2: Finding Members for My Investment Club

After knowing what it is I want my club to do and what type of legal structure I want for it, then I will embark on recruiting members. This is the first step towards officially starting my investment club. Prior to my first meeting with those people interested in joining my investment club I should provide them with information about the club. This includes letting them know what the club is going to be about and how it should be run. As founder, or founders, we do have a choice as to who we invite in to the club. Discrimination laws notwithstanding, members can set out specific parameters which potential members have to meet in order to ensure the right mix.

I should not be too concerned if the majority of the people who have expressed an interest in joining my club are all new to the stock market. In fact, this can be a good thing that my club is composed of people who have no real expertise in the market. People who have prior experience with the stock market may quickly become frustrated dealing with amateurs. I should not be worried about being part of a group of people that have no experience since there are many resources that are available to help someone learn about investing. The ideal membership would comprise a few analytical minds, a good accountant, an experienced captain at the helm, an IT whiz and a good administrator. An enthusiastic core membership with the ability and desire to achieve a common goal will take our club a long way.

I will need to find members to join my investment club and I can achieve this in a number of ways.

$ Friends

If I have one or two friends who have shown a mutual interest in the stock market or bond market I can approach them to join my investing club. I should start talking with friends and see who's interested. It is best to gather a variety of people who will bring to the club a variety of interests, experiences, and perspectives. Once I find a few interested friends, I will let them invite a few of their own friends. My aim is for a club with roughly 12 to 18 members, give or take a few, but below twenty members. Too few and I may have trouble accumulating funds to invest. Too many and I will have trouble having quality discussions and finding a place to meet.

$ Word-of-mouth

Word-of-mouth, regarded as one of the best forms of marketing, should soon see potential members eagerly offering their resources; particularly after the word is out that we have managed to complete a profitable trade.

$ Advertisements

I can find other people who are interested in joining in my investment club by advertising in the newspaper or by posting notices on community bulletin boards. The important thing to remember is that I want to attract people who have an interest in learning more about the stock market while they invest small amounts of money.

Step 3: The Inaugural Club Meeting (1^st Meeting)

When the investment club meets for the first time there are several things that will need to be discussed. Usually conducted by the founder members, this meeting needs some pre-preparation. Invitations should be sent out to all prospective members giving the date, time and venue of the meeting. I will let everyone have the opportunity to add their input into the meeting so that all opinions are taken into account. The initial first meeting is a great way to clear the air and start to establish some basic guidelines for the way my investment club is going to be run and what the club goals are going to be. I will want to make sure that the majority of the members are thinking the same way. The meeting can take place at a member’s home, a local pub or any quiet venue without distractions.

A good inaugural meeting is one which ensures everyone knows what is going on, what the club aims to achieve, how the club will be run, which partners will be engaged, and what responsibilities the members and officials have. Members should also know the frequency of future meetings and when and where the next one is to be held. I will also know that we have had a truly great meeting if my members leave inspired, enthusiastic and determined to do everything needed to achieve the goals. An agenda should also accompany the invitation and should include the following:

$ Introducing & Defining an Investment Club

At the first meeting, I will explain to the potential members that the purpose of the meeting is to ask them to become business partners in forming an investment club. I will then explain to them that an investment club is a group of people coming together to make money while at the same time networking and learning. I will remind them that unless all the three objectives of investing; learning; and networking are present, then it is not an investment club.

$ Discussion of the Dream & Goals of the Club

The first meeting to discuss (a) whether we have enough in common, (b) how we will be organized and run, and (c) whether people are still seriously interested in forming a club. I will make sure that I schedule a large amount of time for this first meeting so that I have plenty of time to talk about all of the following issues. All of the members must have the same interest in starting an investment club. We must be on the same page about what the club is all about. I will make sure that we all have similar or compatible investing goals. If some people want to double their money in two years and then get out, that is not only unrealistic, but also probably at odds with those who want to learn and slowly grow their savings.

The discussion of common interest should be the pillar of commitment. All members should be aware of the commitment level that is required to participate in an investment club. This meeting will re-affirm that there is a seriousness to be a member of the club, and will give anyone who has second thoughts a chance to decline being a member.

The members will decide on a name for the Investment Club. The founders should be having a tentative name that they should share, giving the reason for picking the name. The club will trade under this name and the broker and bank accounts will be under this name. The name might reflect the area we live in, the work we do etc. We can choose to be straightforward and name the club after something like our geographical region, or we can be creative.

Names that some clubs have used include: The Money Makers, The Small Wonder Investment Group, Blue Chips and Salsa, The Common Bond Investment Club, Common Cents, The Fortune Seekers, The Steady Plodders, The Live and Learn Investors, The Silk Stockings Investment Club, Stocking and Bonding, Blooming Assets, Lady Investigators, The Hounds of Xemba, The Stockettes, Fortune Hunters, Dynavestors, and so on. One group of women named their club the Stroke of Luck because they all met at a doctor's office tending after their husbands who had had strokes, leaving the women suddenly needing to take control of the family finances. I will want to come up with a name for my investment club. I do not need to make this decision on my first meeting but members should come to the next meeting ready with several ideas to share for a club name.

€ BLUE CHIP: A company that has a history of solid earnings, regular and increasing dividends, and an impeccable balance sheet.

$ Discussion of the Legal Entity

The constitution, or investment club agreement, is important for practical reasons as well as legal ones! In terms of the practical reasons, the main one is because it confirms the organization of the individual club and defines the roles that people will play.

Although my friends and I may well believe that nothing will go wrong, if we do not lay out the guidelines and rules in advance then we may have problems further down the road. An investment club agreement is also necessary for legal reasons. Not only will it ensure that the interests of the individual members are protected, it will also prevent any form of illegal activity taking place. It will put a series of checks and balances in place to make sure that no one person is in control and that it is a democracy rather than a dictatorship. Similarly, it will prevent legal action against any individual member if they follow the agreement to the letter.

Every individual should protect his or her financial future as far as possible and this is the overriding reason why an investment club agreement is essential. If every member has agreed on the terms and signed the agreement then I can have peace of mind that my investments are safe and sound within the club, even if I am reliant on the stock market for financial success! Further, a bank or brokerage firm will require Articles of Incorporation or a Partnership Agreement when setting up an account.

The meeting should discuss and agree on whether the investment club should be a partnership, a registered company, a cooperative or an association. The members should also agree on how we will be organized operationally. We will need to have formal agreements in place to protect ourselves in case one member turns out to be a dastardly demon. We should not neglect this paperwork issue. I will also give the basic advantages and disadvantages of each form of legal entity so as to enable quick agreement on the form of association.

The eight (8) legal associations for investment clubs are as below:

1) Company/Corporation

2) Partnership

3) Cooperatives (SACCOS or Multi Purpose Cooperatives)

4) Nonprofit Corporation (Foundations)

5) Associations/Societies

6) Loose Affiliation/Informal Group (Implied Trust)

7) Trusts

8) Business Name with a Constitution/Sole Proprietorship With Constitution/Single Member Company with Constitution

$ Discussion of Membership & Fees

€ Number of Members

We will agree on the size of the investment club. Studies show that a good size for an investment club is approximately 12 to 18 members. When I limit the size of the club to this many members I am still small enough to hold meetings in member’s homes.

€ Membership List

I will then make a list of member interests and expertise. This is because as I begin hunting for companies in which to invest, I will want to choose industries to study. As Peter Lynch points out, ‘it is a great strategy to buy what you know.’ (Actually, it is probably best restated as ‘research what you know.’) If I am in the chemical business, I might volunteer to look into companies in that industry, choosing a few for a close look. If a member is an avid golfer, she might look into golf-related companies. It is a good idea to make a list of the industries with which my club members are familiar. Even if someone's only hobby is hitting the malls every weekend, that is a great boon - he will be familiar with many retailers. A listing of current members, including phone numbers and addresses should be done.

€ Membership Duties

Each member of an investment club is expected to participate by:

£ Attending meetings

£ Making monthly contribution

£ Researching and following the progress of a particular stock or family of stocks that the Club has bought or is considering for purchase.

£ Researching securities and presenting the data to the rest of the group.

£ Making ongoing buy and sell decisions.

£ Tracking and reporting overall portfolio performance.

£ Accurate management and reporting of personal taxes.

€ Membership Fees

There should be clearly indicated the amount of money that each member should pay when they become members of the club; the monthly subscription for purchasing shares, and the monthly payment for dues for maintaining the club and club activities. Members should come to a mutual agreement upon how much money they are each going to contribute each month.

This need not be set as high as possible, after all, this is a learning activity, and the members can always increase the amount at a later date. Many clubs allow members to contribute more than the monthly minimum level if they so desire. Members can make changes to the minimum amount policy at a later date. Many clubs start out with small contributions of anywhere from $25 to $50 dollars. This money is used for reimbursing club registration & other legal fees; contribution into the investment fund; buying educational materials; and purchasing snacks during the meetings.

$ Discussion of Meetings & Administration

€ Administration & Leadership

£ Discussion of Club Leadership

I will explain to the potential partners that an investment club has six leadership positions, which should be filled up. I will also remind them that by the time we achieve our long term goal, all of us shall have had an opportunity to a leader in all positions. An investment club should have the following officers:

1. Club President

2. Deputy President & Education & Research officer

3. Secretary

4. Finance Officer

5. Social Secretary

6. The Auditor (External)

£ Discussion of the Networking Program

I will explain to the potential partners that an investment club seeks to build relationships and the quality of such relationships amongst members. As such, the club needs to engage in networking events for the purposes of bonding of members, and these can be in form of edutainment activities, camping, visiting and sleeping-overs, parties, etc.

£ Discussion of the Education & Research Program

There should be a listing of materials about investing that everyone should read to become more familiar with investing techniques and definitions.

At the time of the next meeting members can start to discuss the finer points of investing. The vice president, who also doubles as the education officer, should be planning the first education program that the club will start learning with. The club should then also decide on an educational agenda. This will naturally change a bit over time, as members become more sophisticated investors. But it is important to start out with some kind of plan, for instance, for the first few months, to learn how to read annual reports. If we are already comfortable with, we might delve into various valuation methods. A good way to start this discussion might be to go around the room and ask members to say what big questions they have about investing that they would like answers to. No one should be embarrassed, though - our club should foster an open and unintimidating atmosphere.

Education, through member involvement in research, is a good way of encouraging enthusiasm and helping the clubs’ cause. Each member should be asked to conduct research in their spare time and report the findings at the next meeting. A good Investment Club conducts a good deal of research. Unless we have agreed to choose what equities to invest in by lining up to throw darts at broadsheet listings, we will need to research;

€ companies and their market sectors,

€ different investment vehicles open to us,

€ risk and return,

€ what portfolio would be best to achieve our overall investment strategy,

€ how the markets work,

€ how to protect against losses and maximise profits

The list is very long and research is a continuous process.

£ Discussion of Investment Program (Investment Principles & Investment Vehicles)

At every meeting, the club members should remind themselves of the investment principles and investment vehicles.

€ Investment Vehicles

The club members need to read and understand the various options for making money to work for us. These options are referred to as ‘investment vehicles,’ or ‘investment products’, which is just another way of saying ‘a way to invest.’ Each of these investments is something I purchase or place my money into in return for the earnings (capital gains, dividends or interest) that is generated over time and paid back to me. These vehicles are grouped according to the type of asset invested in, and Rwoth Ramogi, in his classical and all time best-seller, Making My Child Financially Intelligent: Money Lessons by Age Group (from 3-13 yrs), classifies the investment vehicles into three broad categories, namely, Personal Branding or Self-Help; Traditional Assets or Financial Instruments; and Alternative Assets or Alternative Investment Products.

In addition to other excellent books written on the subject, the cub members can also read Rwoth Ramogi’s The Gift of E11even Moves to Make Me Wealthy, which teaches us the eleven areas that we need to develop to enjoy the complete and wealthy lifestyle, namely health, relationships, riches/money, career, adventure, happiness, dreams & goals, positive attitude, controlling the day, helping people and being peaceful). We can also read Talanta: Rwoth Ramogi’s Guide to Identifying, Developing & Selling My Talent & Career Skills, which has practical exercises to help us identify, develop and commercialize our talents and skills. And a practical book to read for further knowledge in investing in financial instruments and alternative investment vehicles is Invest: Rwoth Ramogi’s Guide to Financial Instruments & Alternative Investment Products.

It does not matter which method we choose as a club for investing our money, the goal is always to put our money to work so it earns us an additional profit. Even though this is a simple idea; it is the most important concept for the club members to understand.

€ Investment Principles

The club members need to agree on the principles that will guide the investment club. There should be a mutual agreement about what investing style my club is going to focus on. Any member that is in serious disagreement about the decisions made at this meeting has a chance to decline being a member.

The conveners should read through the Rwoth Ramogi 9, i.e., the nine fundamental principles of investing, namely:

1. Goal Setting: This involves painting the picture of financial freedom that I want to have, and writing what I must do to get there.

2. Leveraging: The club should rely on Other People’s Money (OPM), to leverage, and achieve a much larger investment portfolio without diluting shareholding or committing additional personal capital.

3. Saving-2-Invest: The club members, or investors, and the club, should accumulate money through savings in order to invest.

4. Long-Term Investing-The club should have a three-year plus investment outlook.

5. Portfolio Diversification-The club should diversify its portfolio so as to spread risk.

6. Dollar Cost Averaging-The club should be investing regularly.

7. Risk Tolerance- The clubs investment decisions should be alive to the risks.

8. Knowledge-Based Investing-The club members must have a continuous learning culture

9. Compounding & Re-Investing- The club should reinvest and compound its earnings.

€ Meetings

£ Meeting Times & Place

The club should agree on a regular meeting time, place, length, and format. This will help us keep meetings running efficiently and prevent someone's report from going on for an hour and dragging things out too long. Most meetings will probably last between one and two hours. One reason to try and keep a club size to no more than about 12-16 people is that it permits meetings to be held in living rooms. Another possibility is to seek out some other space, like a local library or church. A coffeehouse or local watering hole might also work. Perhaps a member has an available meeting room at his workplace. The club will decide when to meet, and how often.

All members should agree on:

1. The days and time that they meet (most investment clubs meet once each month);

2. The place for meeting;

3. The length of the meetings (most meetings last about two to three hours);

4. The organizational format that each meeting is going to take.

£ Conduct of Business at Meetings

In order to operate an investment club, business must be conducted in an orderly fashion. The level of formality will vary based on the club type. Part of the experience of starting an investment club is getting together to enjoy similar interests and goals. Club members should communicate on a regular basis.

The importance of good communication between members of the group cannot be stressed enough. A typical club will have informal channels of communication via mailing lists, twitter accounts or message boards.

In addition to the informal channels of communication, an investment club must set up formal channels of communication to conduct business.

Further, the club should have clear agenda format, and the agenda should be sent to the members at least 24 hours BEFORE the meeting.

Typical meeting agendas include all the normal activity I would expect in an organization with elected officials as below;

1. Welcome Remarks: Welcoming of all members and visitors attending by the chairman of the meeting; this may include prayer

2. Preliminaries/Old Business: Secretary reporting on apologies; reading last meetings minutes and asking for ratification of the same; reporting on any unfinished business from the previous meeting; reporting on assignments; and reporting on all voted decisions from the previous meeting.

3. Investment Agenda: Net Asset Value (NAV) presentation by the finance secretary, indicating what each club member is worth on paper; presentation of Available Funds to invest; Voting to hold cash, sell current assets or invest in the chosen investment options, specifying an exact amount to invest and strategy to execute that investment.

4. Learning Agenda: Presentation of Current Research, by the members on their pre-assigned reading; presentation of research by invited guest speakers; presentation of lessons learnt on a previous site visit; or watching an educational audio-visual presentation.

5. Networking: Presentation on networking events engaged in during the previous week; discussion of possible networking events; or engagement in a networking event.

6. Any Other Business: Discussion of matters not indicated in the agenda, or matters for tabling in the next meeting as agenda; or other issues not directly related to education, learning or networking. This could also include options to change a brokerage house, or discussions of counter party risk.

7. Formal Close of Meeting.

Step 4: Agreement Meeting (2^nd Meeting)

$ Agreement on Legal Entity

The club members should agree on which legal entity the club should be registered as. After this agreement, the club will task the officials so appointed to take on the registration of the club.

$ Agreement on Meetings & Administration (Leaders)

€ Meetings

The club should agree on the types of meetings, and when and where they shall be held, and at what frequency. The club should also agree on the agenda of the meetings.

€ Administration

Also, the club needs to agree on the networking, investing and learning programs.

€ Leaders

The club should agree on what responsibilities there are, and what kinds of officers we will need to elect to take on these responsibilities. It is important to remember that even regular, non-officer members have responsibilities. The club should elect the officers in this meeting. It is important that all members of the club have the opportunity to serve in one post or another within a period of five years (usually most clubs have started achieving their financial goals after five years). This therefore means that the club leadership should rotate annually.

Most investment clubs will have seven officers and a committee. The officers are Club President; Deputy President & Education & Research officer; Finance Officer; Secretary; the Auditor; IT Director; Social Secretary; and the committee is the Investment Strategy Committee.

After agreeing on the club administration, in the form of the club officials, and also agreeing on the investment principles, the club should go ahead and apportion some of the very first duties for the new officials.

The duties, with the officials to perform them, shall be as below:

Ã Banking: The proposed bank for the club-finance officer

Ã Broker: The proposed broker for the club- finance officer

Ã Auditor: Availability of investment club- finance officer

Ã Club Registration: The legal entity, registration process and costs-secretary general

Ã Investment Laws: Country an d local by-laws about investing-chairman

Ã Club identity documents: these include receipt books, barges, t-shirts, etc.- secretary general

Ã Draft Constitution or Legal Document for Agreement(partnership, articles, constitution, rules, etc)-Secretary General

$ Agreement on Investments Clubs Strategic Plan

The club should also agree on the mission, vision, mission, objectives & goals. The newly elected or appointed chairman or club president is then tasked to prepare a draft strategic plan.

The Investments Club Strategic Plan is a document that clearly indicates who the investment club members are; why we come together; what we want to achieve, and how we want to achieve it, and when we will achieve it.

The strategic plan clearly outlines the vision, the mission, the objectives, the goals and the activities that will be undertaken by our club to make us rich, knowledgeable and better friends.

The strategic plan also has clear indicators of performance so that when we miss the goal, we know, and when we are not moving, or when we are moving in the opposite direction, we also know. The plan! The philosophers were right, if we fail to plan, we are planning to fail. A Sample Strategic Plan is herein attached with the book.

$ Agreement on Club Membership & Fees

The club members should then agree on the membership, and the fees.

€ Club Membership

The members should agree on who qualifies to be a member, and who qualifies to be a leader in the club. This can be based on friendship, or employees, or sex, or even age.

€ Fees

The club members should then agree on the various fees to be paid by members, and the amount of every such fee. These fees include the following:

£ Registration fees: paid once when someone becomes a member of the club.

£ Investment fees: the money paid monthly to be invested.

£ Monthly dues: the money paid monthly to be used for the purposes of covering monthly expenses for education, networking and other meetings.

Step 5: Approval of Documents & Business Partners (3^rd Meeting)

This third meeting will be a meeting for approving the documents and business partners of the organization and ratifying them for registration.

$ Approval of Documents

The following documents, information and data will be presented for approval:

Strategic Plan: which will be presented by the club president, and debated and proved. The club can approve a draft strategic plan, as it is improved with time.

Legal Documents: The members will also be presented with the legal document/constitution/deed/rules & regulations or any such other legal forms to be filled and signed for the purposes of registration.

Investment Clubs Manual: The members need to approve the draft manual, a small public document that the investment club can use to engage with potential new members. It is in the form of a profile. It contains the mission, vision, and strategic goals of the club in the areas of investment, education, and networking. This document also indicates current members, current leaders, and future plan of the club. Sample content is attached in appendix.

$ Approval of Business Partners

The club will need to carry out business and there are various business partners that the club will inevitably contract with, depending on the industry, as below:

Ã Fund Managers: These can invest part or all of our investment clubs money.

Ã Insurance Service Providers: These can offer group covers for health, education, life and other emergencies of life, and or future planning.

Ã Lawyers: The lawyers will help in legal registration or incorporation, drafting agreements, performing legal due diligence, and represent the club in disputes and or litigation;

Ã Bankers/Custodians: The proposed bank for the club will keep accounts, and also custody of legal documents, including titles, certificates, etc;

Ã Company Secretary: To take official minutes and board and annual general meetings, issue share certificates, and maintain company’s share register

Ã Brokers: The proposed broker for the club to receive payments for purchase or sales of securities, trade securities, and monitor and report on performance of securities market;

Ã Tax Accountant: To produce annual accounts for the investment club, carry out tax due diligence and advise on tax.

Ã Auditors: Availability of investment club accounting software

Ã Printers: These will design and print the logos, receipt books, identity materials, etc.

Ã ICT: These can offer information, technology and communication expertise, and services, for the club to aid in communication and other services.

Ã Finance Consultants: Provide financial, investment, tax advice and due diligence in regards to investment decisions.

We should be sure to consult qualified counsel regarding rules and regulations that may govern our organization. Attorneys and accountants can be invaluable to any organization, and we should avail ourselves of their knowledge and background to ensure the legality and economic value of our investment club.

€ Registering the Investment Club as a Business Entity

After the above documents have been tabled and discussed, it is now time for the club to register legally. The secretary should be charged with the responsibility to reserve the name of the club, and retain services of a lawyer, to register the club. The secretary is also charged with the responsibility to contact and liaise with the finance officer to register the club tax number, and to obtain other documents such as club receipts, registration books for members, and stamp.

€ Obtaining Tax ID Number

The finance officer should then file the tax information that is required to obtain a Tax ID Number. The finance officer will also now be able to open up a banking checking account for my club as well open a brokerage account. At this meeting, the members also contribute their membership registration fees, which are partly used to cover expenses of registering the club, and for buying other stationery and related items.

A CHECKING ACCOUNT differs from other bank accounts in that it often allows for numerous withdrawals and unlimited deposits, whereas savings accounts sometimes limit both.

A BROKERAGE ACCOUNT is an in that it often allows for numerous withdrawals and unlimited deposits, whereas savings accounts sometimes limit both.

$ First Research Assignment

At this meeting, the members study the listed companies in the stock market, and agree to carry out analysis and research on the companies, so as to make an informed presentation at the next meeting, which shall be the first meeting to order s trade.

Step 6: The Inauguration Of The Club (4^th Meeting)

$ Inauguration of the Club

At this meeting, the secretary will present to the club the official paperwork of registration, together with the bank account details and the tax number of the club. When the paperwork returns, the secretary of our investment club should make sure that the paperwork is filed and that members of the club have access to the information. All original copies of official documentation should be kept by the secretary in a safe place. This includes any registration papers, member information, stock purchases, and any other official records that need to be safe guarded.

$ Presentation of Initial Research on Potential Investment Vehicles

The members will also present their research carried out after the previous week assignment, and give their analysis of the listed companies, and which stocks they should buy, any other investment, if the club is not purely for stocks.

In case we are still not ready to invest, the members should present their receipts for the deposits made for investment, which deposits shall be in the bank account till the club members agree on the investment vehicle.

This meeting is also attended by their stock broker for advice on the stocks to buy. Also attending this meeting should be an officer volunteer from an investments clubs association.

After the members vote on the company to invest in, the members will then contribute their monthly dues and hand over to the finance officer for the purpose of investing.

Step 7: Growing the Investment Club

$ Growth Plan (From Investment Club to Investment Company)

The investment club should have a plan, indicating the process, and timeline, for growing from an investment club, into an investment company.

The path of growth of an investment club is as below:

Investment Club

Investment Company

Public Company

Public Listed Company (PLC)

Every stage requires a given capitalization, management expertise, business systems development, corporate governance and reporting requirements.

It is the work of the leaders to make all these a reality. It is the leaders, who will grow, or limit, the potential of the investment club.

$ Corporate Governance

Corporate governance is concerned with ways in which all parties interested in the well-being of the firm (the stakeholders) attempt to ensure that managers and other insiders take measures or adopt mechanisms that safeguard the interests of the stakeholders.

The investment clubs have three boards namely; supervisory board, board of directors, and the management boards.

1. The supervisory board comprises of three members who are not in leadership.

2. The management board has should have between 3-9 members.

3. Board of directors should have between 3-9 members too.

The core function of corporate governance is the responsibility of the board of directors.

€ Board of Directors

Every investment club is required by law to have a board of directors. Its legal function is to govern the affairs of the investment club. Board of directors is the agent of the owner and their principal task is to monitor management’s performance.

€ Board Activities: Roles and Responsibilities

Board of directors has varied roles and responsibilities. They are entrusted with the following:

· represent and create shareholders value;

· align the interest of management with those of shareholders, define the companies mission and goals, protecting the interest of other stakeholders (customers, creditors, suppliers);

· appoint senior executives to manage the investment club in accordance with the established strategies, plans , policies and procedures;

· develop and approve executive compensation, pension, post-retirement benefits plan;

· review financial reports, including audited annual financial statements and other important financial disclosures;

· review management reports on the effectiveness of internal control over financial reporting ;

· ensure the investment club’s compliance with applicable laws, rules and regulations ;

· approve the investment club’s major operating , investing and financial activities;

· evaluate the performance of the board , its committees (e.g. audit, compensation) and the members of each committee;

· hold the board, its members and its directors accountable for the fulfillment of the assigned fiduciary duties and oversight functions ;

· approve dividends , financing , capital changes and other extra-ordinary corporative matters.

· oversee the sustainability of the investment club in creating long term shareholder value and protecting interest of other stakeholders.

€ Board committees

Board committees normally function independently from each other, they are provided with sufficient resources and authority and are evaluated by the board of directors. Board committees are a subset of the board and perform specific functions that assist the board in discharging its advisory and oversight responsibilities. The common committees are:

· compensation and appointment committee,

· audit committee, which must be composed of independent directors with no personal, financial or family ties to management.

· investment committee.

· shareholder relation committee .

· governance committee .

$ Succession Planning

€ What is Succession Planning?

Essentially, succession planning is a conscious decision by a SACCO to foster and promote the continual development of investment club systems and developing the capacity of employees to address emerging issues that can or will affect investment club continuity.

Traditionally, succession planning has sometimes taken a replacement approach, often focusing on executive-level positions. One or two successors might be identified and selected, probably based on the exclusive input of their immediate supervisor, and then placed on the fast-track into a senior position. However, succession planning has evolved into a process that can be used to:

• Replenish a SACCO’s HR at a broad or specific level;

• Identify, assess and develop employee knowledge, skills and abilities to meet the current and future staffing needs of the SACCO; and

• Ensure a continuous supply of talent by helping employees develop their potential, as successors for key departmental positions.

No investment club can survive without an able owner or manager at the helm. In the event of a key person’s sudden death, illness, or retirement, investment clubes are often left scrambling to find a suitable replacement. Large investment clubs and small investment clubes alike can avoid a tumultuous transition by establishing a succession plan.

Succession planning include:

• Addressing potential exit strategies

• Sacco restructuring

• Mergers, acquisitions or sales

• Recapitalization

• valuation of the investment club

• Transfer or disposition of intellectual property assets of the investment club

· Earn-outs

· estate planning.

€ Without a Plan

If an owner or shareholder does not have a succession plan in place, the stake in the investment club is either passed on to relatives as part of the estate, absorbed by other shareholders, or a combination of the two. In family-owned investment clubes, this often leads to disputes between siblings and other relatives. Those more active in the day-to-day operations of the investment club may feel entitled to larger shares than others who are less involved. In larger investment clubs, employees and clients may leave the investment club for fear of instability.

Additionally, without prior planning, remaining shareholders may not have sufficient resources needed to purchase the shares of the exiting or deceased shareholder. This can lead to a situation where a spouse or child of a deceased shareholder attains an ownership stake in the investment club which can result in disputes, stalling progress and possibly leading to a loss of assets. Furthermore, if the exiting shareholder had a management duty, her replacement may not be equipped to take over her role through such a delicate transition time.

€ With a Plan

A strategic investment club plan with a succession plan can help owners and shareholders put together a plan that facilitates a smooth transition. Plans are customarily created after employees, coworkers, shareholders and family members have been consulted and goals for the future of the investment club have been outlined. Succession planning can be tailor-made to fit any investment club model and should address the following issues:

• Keep the investment club or shares within the family. With a retention plan, a spouse, children, or other relatives can retain control of assets.

• Offer shareholders or vital employees a larger stake in the investment club. Interested parties stipulated in the plan will be granted the right of first refusal, or the ability to accept or reject the shares of the exiting or deceased owner before they are offered to individuals outside of the investment club. The price of the shares can be determined by a valuation mechanism agreed upon during succession plan negotiations. For example, a valuation mechanism may require that shares be offered at their prevailing market value, or require multiple professional investment club valuation appraisals

• Address issues related to your estate plan as well as minimization of potential estate taxes.

• Preserve “institutional memory” when you or other current managers are no longer running the show. For example, you can empower advisors to aid the transition team and ensure continuity, oversee day-to-day operations, provide provisions for heirs who are not directly involved in the investment club, and provide education and training to family members and key employees who will take over the investment club.

• Establish measures to ensure the investment club has enough cash flow to pay taxes or buy out a deceased owner’s share of the investment club.

• Implement a family employment plan with policies and procedures regarding when and how family members will be hired, who will supervise them, and how compensation will be determined.

• Other arrangements can be made that would transfer the owner or executive’s interest into trusts to be paid out to family members. Assets may also be divided among employees or in other cases, it may be best to sell the investment club. With so many factors to consider, it is important that you consult an experienced investment club planning advocate who can understand all of the interests at stake and work with you to protect them.

€ Key Strategies for Succession Planning

Employees to understand they are responsible for managing their own career path(s)

Sacco to support necessary learning and development

Work environment supportive of succession planning

Leaders to have shadow leaders, who are destined to take over, either as deputies, incoming teams, or alternates.

Boards of directors utilizing a professional recruitment consultancy service such that successor is selected from a pool of candidates on the basis of perceived competency.

$ Investment Clubs Annual Report (Format)

A very important part of growth is continuous regular reporting of the status of the investment club.

This report, presented at either annual general meetings, or special general meetings, is important as it shows where we are, in relation to where we came from, and where we are headed.

An annual report should have the following documents:

A. Executive Summary

B. Chairman’s Message

C. Organizational Profile

D. Directors’ Activities

E. Activities & Business Review

F. Corporate Governance

G. Recommendations

H. Auditors Report

€ Chairman’s Message

This is the welcoming message of the current or outgoing chairperson, to introduce the report, and thank the members.

€ Executive Summary

This is a summary of all contents of the report, and summarises the following sections:

a) Organizational Profile

b) Directors’ Activities

c) Activities & Business Review

d) Recommendations

e) Auditors Report

€ Organizational Profile

This lists the current state of the organisation, covering the Seven Ps namely:

a) Philosophy,

b) People,

c) Products,

d) Partners,

e) Processes,

f) Profitability, and

g) Plan.

€ Directors’ Activities

This section reports on any specific activities that happened in relation to the directors, including change of directors, resignation of directors, or such other such activities that changed the legal responsibilities and duties or one or all directors. This also includes directors’ meetings, decisions, and such resolutions that were implemented, or shelved.

The particular issues addressed here include:

a) Report of the board

b) Statement of board responsibility

c) Resignations

d) Re-election of Directors

e) Retiring Directors

f) Directors’ meetings

€ Activities & Business Review

This section of the directors’ report lists the entirety of activities engaged in by the organisation, in this case, this includes:

a) Highlights of the previous year

b) Chairmans report

c) CEOs report

d) Financial and performance overview for newxt five years

e) Risk management

f) Training and capacity building events;

g) Networking and fun events;

h) Investment activities;

i) Corporate social responsibility events.

j) Statement of appropriation;

k) Reconciliation of funds (education, surplus, etc)

€ Corporate Governance

This part of the report indicates the business systems, procedures, and processes, and the extent to which they meet legal standards of corporate governance, protection of shareholders’ interests, and regulatory standards.

The details covered include:

a) Legal Entity, Office, Address & Location

b) Going Concern

c) Share Capital

d) Company Secretaries

e) Indemnities

f) Remuneration Policies

g) Employment Policies

h) Shareholder Rights (Voting and Communication)

i) Government Regulations

j) Environmental Regulation

k) Ethical Issues & Value Systems

l) Legal Proceedings

m) Auditors

n) Annual General Meeting (AGM)

€ Recommendations

Finally, the directors’ report should list any recommendations for future running of the organisation, or for the winding up of business, or such other change in strategic positioning of the organisation.

€ Auditors Report

Attached to the director’s report should be the auditor’s report. The details cover:

a) Report of independent auditor

b) Statement Of Directors Responsibilities

c) Basis of Opinion

d) Statement Of Comprehensive Income

e) Statement Of Financial Position

f) Statement of changes in equity

g) Notes To The Accounts

h) Any other Comments (Corporate Governance, Policies and Procedures)

STARTING AN INVESTMENTS CLUB in zambia (The 7 Steps)

Step 1: Thinking Big (Developing The Idea To Found The Club)

€ Club Dream &Vision

€ Club Mission

€ Club Objectives

€ Club Goals

£ Goals Need Resources

£ Barriers to Success

€ Club Meetings

€ Club Administration

£ Membership

£ Fees

€ What is a Strategic Plan

€ Sections of Strategic Plan

Step 3: The Inaugural Club Meeting (1st Meeting)

$ Discussion of Membership & Fees

$ Discussion of Meetings & Administration

€ Administration & Leadership

£ Discussion of the Networking Program

£ Discussion of the Education & Research Program

£ Discussion of Investment Program (Investment Principles & Investment Vehicles)

€ Meetings

€ Meetings

€ Administration

€ Leaders

€ Club Membership

€ Fees

Step 5: Approval of Documents & Business Partners (3rd Meeting)

€ Board of Directors

€ Board Activities: Roles and Responsibilities

€ Board committees

€ What is Succession Planning?

€ Without a Plan

€ With a Plan

€ Key Strategies for Succession Planning

€ Chairman’s Message

€ Executive Summary

€ Organizational Profile

€ Directors’ Activities

€ Activities & Business Review

€ Corporate Governance

€ Recommendations

€ Auditors Report

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Step 3: The Inaugural Club Meeting (1^st Meeting)

Step 5: Approval of Documents & Business Partners (3^rd Meeting)