When you think of investing of course you think money. Investing requires money and the winnings that come with investing successfully are the gains, aka money. But there are a lot of unseen and non-monetary benefits that come with investing in a club like ours. These include 1) accountability, 2) masterminding, 3) forced savings by locking in your investment, 4) economies of scale 5) access to different industries, and the list goes on and on. I wanted to write a blog that speaks to the reasons why it is important to invest with a group even if you are investing on your own in another account.
For many, accountability is the missing link in achieving their goals. We all have these grand ideas but when it’s time to go it’s easy to talk ourselves out of doing it. There is a bill or an expense that seems much more important than setting aside that money to invest or save. Investing in a club creates virtual accountability because the club can’t move unless we are all in line. Someone is looking over your shoulder to make sure you are still on board.
I have personally felt this and been called out on it. I was forced to rise to the occasion and I am happy for it. When I started the club I too fell into finding other things to do with that $100. The accountability I found in the club pushed me to make it happen and now I don’t even see the monthly investment.
A Mastermind group is “a friendly alliance with one or more persons who will encourage one to follow through with both plan and purpose.” Napoleon Hill, Think and Grow Rich. A Mastermind “is the principle through which you may borrow and use the education, the experience, the influence, and perhaps the capital of other people in carrying out your own plans in life.” My favorite part is where Hill says that a Mastermind “is the principle through which you can accomplish in one year more than you could accomplish without it in a lifetime if you depended entirely on your own efforts for success.”
The mastermind concept exposes us all to better ideas as our iron sharpens each other’s iron. Just getting on phone calls, group chats or emails to talk about investing puts us in a better position financially. Think about it, when guys go into the barbershop and discuss sports together they become PhD’s in Lebron’s stats. When girls get together and talk about makeup they become better at makeup. Lets flip the scrip, start talking about wealth and see how high we can go.
Since we have so many members it allows us to not get so niched into the few companies we personally like and follow. I have a few companies that I track (NFLX, TSLA, UA, TWTR, SCTY) these are all ultra growth companies. Since I joined/created the club I am now looking at the entire market because the Mastermind has forced me into it. This is because “when the Mastermind comes together a unique phenomenon takes place and the combined brains create a separate brain that is composed of all our experience and expertise.” That is where the magic happens.
3) Locking in your investment
I always say that investing is the best way to save. You want your money working because it allows you to get excited about your money when you watch it grow move. Money that is sitting in a savings account gets bored and if your money gets bored it will soon be spent on something exciting like some shoes or a video game.
Grant Cardone, my role model, says you don’t start out saving you start investing and then you save what you earn from your investments (I think I just gave away the key). Jay Morrison says that “money is meant to be invested not spent”. So one benefit is that investing FORCES you to save. This is because you tend to keep money where it is when it is locked in a security that has to be cashed out and then seasoned before you can withdraw it. I don’t know why this works I just know that it does.
Because we are all investing in a group and we don’t have immediate access to the funds we are “forced” to lock in our accounts and ride out the wave. As a result, some people have more money saved than they ever would have if they had immediate access to the funds. Something always comes up and that money you had set aside disappears.
When you are in the club you will somehow find a way even to keep it invested which creates that forced savings phenomenon I discussed above. Forced savings isn’t the goal of the club this is just an unintended benefit that we all get to take part in. It feels good to know that outside of any other personal savings and investment accounts you have that you have equity in a fund that is growing. That is wealth, that is net worth.
4) Economies of Scale
Economies of scale is a proportionate saving in costs gained by an increased level of production or size. On one hand, we take on economies of scale because we have the benefit of splitting costs between our 42 and growing members. Because we have commission fees and software costs that can help us tremendously by taking large software costs and dividing it into a $7 membership fee.
On the other hand, our scale allows us to make chunky purchases with non life altering contributions from members. On average each member invests about $50 but we as a group invest $2500/month on average… The average household isn’t investing that hard and as we grow and grow we are going to make an even bigger impact in the market. The goal is millions of dollars invested. I want us to be the biggest investment club in the country!
5) Access to different industries
The amazing thing about so many minds is we now have expert information about industries that we can now leverage into smart investment opportunities. This is important because it helps us not invest blindly and it also cuts down on the learning curve. What could take one of us 4 hours to understand would take someone with experience in the industry 15 minutes just because they already have a head start. We have members that work in pharmaceuticals, the financial sector, entertainment, education, tech, the list goes on and one. This helps people like me get out of my circle of stocks and take on opportunities I would have passed over out of ignorance of the industry.
If you haven’t yet joined the club you can do so today by emailing firstname.lastname@example.org