InvestmentClubbing.com

“Credit Advantaged” investment clubs may be a huge benefit to members.

HOW IT WORKS

Some investment clubs offer to sell shares of the club itself on a contract of purchase.  Typically, a member might buy, for example, 10,000 shares of an investment club at $1. per share.  On a contract, you may agree to pay $1.07 per share in order to have the ability to pay for them over the course of a year.  But most agree that in order to comply with regulations defining an investment club, the shares can’t translate into investments or command a vote, until they are fully paid.  So why  bother?  There are at least two reasons this is attractive.

1. Credit.  Some of these clubs report the payment performance of the member to major credit bureaus.  This provides an opportunity to establish or re-build credit, while establishing an investment.  In the present economy, this is a nice feature.
2. Cash.  The investment club can, at the option of the member, sell the contract to other clubs or investors (at a discount of course), generating cash to the club before the contract is fully paid.  This accellerates the ability of the member to invest the funds generated from their contract sale.  In effect, the member can borrow funds to invest if they so desire.  The investment performance could possibly offset the interest paid, but it could also lose value unless it is simply deposited at interest in cash equivalents.  For this reason, clubs which are also brokers of FDIC – insured deposits may be the best choice.
3. Reservation.  Investment clubs are limited as to size.  When you find a club comprised of people with like minded goals and decision making practices, it’s good to get in.  Buying shares on a contract allows you to take a place at the table of a club you like, even before you have the cash.

InvestmentClubbing.com is assembling a list of Credit Advantaged Investment Clubs.  Contact us if you would like to recieve information from them.

UPDATE:  A lawfirm has formed a club focused on credit.  It holds no investments other than FDIC-insured deposits, but allow members to build credit while they amass capital.  See http://26452423.invclub.info for the specifics.

VIEW CREDIT-ENABLED INVESTMENT CLUB