Early in 2013 I, along with 8 other buddies, created an Investment Club. The idea was simple we would each put $500 to start it up and then an ongoing $100/month contribution. As with most things life it isn’t the idea that is difficult, it is the execution. One month in, I had very little hope for the survival of the investment club. Shockingly, the investment club itself turned around and by 7 months in we really hit our stride.
How the Investment Club Did in 2013
Mainly because I knew no one else would do it I took it upon myself to calculate our returns. Each member put in their initial $500 as well as their subsequent $900 monthly contributions. It cost us $1,642 to get the LLC up and running (now that I have done these for clients this number was a rip off, but too late now). We also had to subtract $400 which was January’s contribution for some leaving us with a year end out of:
Investment Clubs 2013 Actual Returns:
- Investment Gain for 2013 – 31.47%
- Total Gain (with non-recurring start up costs) – 13.78%
- S&P From 2/19/2013 to 12/31/2013 – 21.63% (when money was deposited)
- S&P From 2/19/2013 to 12/31/2013 – 18.24%% (our first trade)
- We only closed out on 3 stocks (realizing the gains) – 119.57% ($367.49), 106.17% ($213.88) and 20.16% ($51.52)
- Received $39.53 in dividends, but these weren’t reinvested in 2013 (will be in 2014 and beyond).
The Future of the Investment Club
Last night we had a 3 hour online meeting using a simple chat service. In it we confirmed/changed some of our processes, discussed tax ramifications and decided what to do with each of our current holdings. The level of participation from nearly every member was a welcomed surprise. Besides my efforts to move along the conversation not one person dominated the conversation or votes which is just fantastic.
Unlike at the beginning I am excited to see how well the investment club does in 2014!