Our investment club currently requires every member to pay
the same amount of dues each month and we assesses a late
fee when the payment is not received on time. We are
considering droping the late fee. If a member does not pay
dues for a month(s) they will just have less value in the
club than others.
I was just wondering how other investment clubs commonly
handle dues. Is it common to require equal contributions
and/or assess late fees or is it common for partners to have
different unit values and different levels of ownership in
the partnership?

Hello Sharon,


My club requires a minimum monthly contribution of $30, but members are
allowed to contribute more, as long as their capital account does not exceed
20% of the entire value of the club. Some of our members like to contribute
$50 every month, and on occasion, we've had to ask them to pull back to $30
until their percentage of ownership comes back in line! Not a bad problem
to have! <G>

I agree with Ira that it's impossible to have equal ownership--over time.
The whole point of unit-based accounting is to alleviate that problem.
However, I don't agree with him on mandatory minimum contributions. At $30
per month minimum, we bring in just enough money to make a purchase every
month, if we want to. And while education is our primary goal, this is,
after all, a money club!

As a former treasurer, I hate late fees. It's a statement that says, "It's
OK to be late. You have our permission." Plus, it's just more work for the
treasurer. In our club, we have orientation meetings for new members to
explain the requirements of the club. It's not acceptable for members to
show up late or not have their payments in on time. Thus, it simply doesn't
happen very often. And when it does, there's usually a good reason. So for
example, on the rare occasion a member is a no-show at the meeting, I'm on
the phone after the meeting making arrangements with them to drop off their
payment BEFORE the deposit is made the next afternoon. Set the expectations
upfront and you won't have problems.

As for your current members who are habitually late, have a discussion at
your next meeting, get a consensus on how to handle this in the future, make
sure this discussion is covered in detail in the minutes, then give everyone
30 or 60 days to get with the program. If people care about the club, they
will step up.

Good luck,

Lynn Ostrem, President
Crow River Investment Club
www.bivio.com/crowriver

In our club, we established a rule where there was a set
mandatory monthly contribution amount for the first twelve
months of membership. This was to prevent the newbie from
plopping down a great deal of cash (because the point of the
club is to have new members learn, not just blindly trust
the group), and also to prevent people who maybe thought it
was a good idea the first two months, then changed their
mind later. I find that after they've put in a year's worth
of money, they've invested enough time and money to keep
interested.

Now, however, there is no mandatory contribution for any of
our members in our 4 year old club. In fact, some members
have stopped making contributions, which is fine with our
policies. For those who are late making the contribution, I
simply record a zero contribution for the current month, and
just roll it over for a double contribution for the next
month.

The reason I hate late fees is because 1) it's a hassle to
account for, and 2) it builds animosity between people. The
last thing I want is for people to think of the club as a
chore or wish that they want out of the club because they
feel they are penalized all the time.