Learn more about investing while starting an investment club!

Jerry A. Dressel on

Great idea!   Candis King wrote in her Ask Candis column, "Two heads are better than one and there is nothing like a friend to help speed along your learning process... If you would like to find a club near you, consider registering at http://www.bivio.com/pub/connect "

Hundreds of thousands of people have discovered the benefits of participation in an investment club. You can too!

As club treasurer there are just a few things that you need to do to get started on this exciting journey.

Most clubs are established as partnerships.   As such, one of the very first things your new club will need to do is to establish its Partnership Agreement.   This agreement defines the way that your club will operate.   IRS Pub #41 Partnerships provides some detail about a Partnership Agreements in addition to many of the other IRS rules that your club will have to follow.

Your club will also need to get an Employer Identification Number (EIN) number from the IRS. The EIN is the equivalent to a Social Security Number for your club and will be required when you open a bank or brokerage account and when you file your clubs tax return.   To obtain an EIN you will need Form SS-4.   Simply contact the IRS or go to the IRS web site at http://www.irs.ustreas.gov/forms_pubs/forms.html to download Form SS-4. Once you have the SS-4 Application for Employer Identification you will find that it provides all the additional information you will need.

Now you are ready to select a financial institution to handle your cash transactions and a stockbroker to execute your trades.     Many clubs use their stockbroker for both functions since many brokers now offer free checking in conjunction with a brokerage account.     It pays to shop around. Find a broker/financial institution that meets your clubs requirements and needs.    There are many sites on the Internet that rank brokers and banks.   Two of my favorites are http://www.gomezadvisors.com/ and http://www.smartmoney.com/si/brokers/online/.

That's it.   You are all set!    We hope your club will find a home at bivio for all of your needs, including accounting, portfolio management, file sharing, communications, etc.    Be sure to watch bivio for many exciting new features in the days and weeks to follow.

The best of successful investing,

Jerry

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