SIMON BROWN: How to set up an investment club

There are a lot of aspects to consider if you’re going down this savings route — and the payoffs can be greatThandi Mkhabela, who formed a stokvel in 2020 and is planning to extend her home. Picture: REUTERS/SIPHIWE SIBEKO

Most famous was the Beardstown Business & Professional Women’s Investment Club that was formed way earlier in 1983 . The claim was they’d made a 23.4% annualised return since inception. Even with the calculation errors the idea remains solid — an investing or savings club among friends, work colleagues or family. In SA, stokvels are legion: an estimated 820,000 of them, with a combined pool of about R44bn. Pooling your money and ideas has many advantages but there needs to be rules, lots of them.

Investment clubs, however, are different as withdrawals are based on money already deposited and profits earned. Here, there are a lot of factors to consider.

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