There are several things that can cause the downfall of an investing club. These things range from lazy members to downright crooked members. While there is no way to guarantee perfect investing through money clubs, it is possible to manage a money club in such a fashion as to promote the best possible outcome. The following outlines some of the common mistakes and traps that may hinder money clubs.

The Crook

Crooked members can take advantage of the honest by stealing the money collected in dues as well as the profits made from club investment ventures. That is why it is of the utmost important to have every member legally protected with signed documents that are drawn up by a legal professional. Another precautionary measure that should be in place is requiring multiple parties to sign off on any transaction that is made by the group.

Snacks

While it may sound trivial compared to drawing up complex legal documents as mentioned earlier, providing a variety of refreshments can be a small step to creating a better meeting atmosphere. Try to mix up the snacks that are brought and do not fall into a predictable routine that will leave members wishing they did not have to eat the same goodies every time.

Delegate

One of the single greatest pitfalls to money clubs is that some members end up pulling more of the load, while others feel left out. By delegating the overwhelming majority of responsibilities, clubs ensure that members feel that they are actively participating. This prevents the problem of ambitious members feeling resentment towards other members who may not be as active.

Calculate and Watch Time

Be sure to calculate the figures correctly when making decisions or tallying up earnings totals. This may sound elementary but it is always a good idea to have at least two people do the math so that they can check and see that they both came up with the exact same totals. Too many clubs have made mathematical errors that have cost money in the end. Lastly, be sure that members understand the time that needs to be invested to make the money club work. Members need to be willing to put in around three to four hours of research per month and devote anywhere from one to three hours at meetings.