For these Edina women, an investment club serves as a safe place to discuss the economy and take financial risks.
Edina resident Danielle Arlowe has always been intrigued by the world of investing and had an interest in being part of an investment club. But it wasn’t until she had a conversation with a woman sitting next to her on a plane ride that she considered taking that interest and turning it into action by forming her own club.
“I never talk to people on planes!” Arlowe says, though she’s glad she broke her rule that one time. To Arlowe’s surprise, the woman was in her own investment club and began sharing the ins and outs of organizing a successful group. Arlowe gathered helpful tips and tricks during their conversation and in email exchanges following the plane ride. Taking this interaction as a sign, she was inspired to take matters into her own hands and start Money Honeys—an Edina-based women’s investment club.
But what exactly is an investment club? It’s a group of people who intentionally invest money together (a varied or fixed amount, depending on the group), with the simple goal of making gains.
Arlowe started by gathering four of her closest friends, and then they each invited one other person outside of their main circle to join. Totaling 10 women, the group set out to dip their collective toes into the world of direct financial investments in a stress- and judgment-free environment. Their first meeting took place on April 15, 2009. At that meeting, Arlowe says they worked to establish their roles, wrote bylaws to hold each other accountable and addressed logistics behind opening the joint bank account and an Ameritrade investment account.
To establish a baseline of money to invest, they each started by contributing $500. From there, they committed to an automatic monthly contribution of $25 to maintain a consistent flow of resources. “We are treating it like a gambling fund,” Arlowe says. “Losing $500 won’t be [a] make or break [situation]. Though I would be sad if I lost it, I know I am going to be OK without it. It is not life or death. It gives us the freedom to have fun with it and take more (calculated!) risks.”
According to Arlowe, the club functions as a fun, large-table discussion that addresses where the world and economy are headed. “We all bring different views and perspectives to the table, which makes for engaging discussions,” says Sarah Hanlon, one of the founding members, adding that the group has been a great way to gather and share ideas. During each meeting, the group (of course) talks numbers, discussing the total value of its investment account, reviewing current investments and having buy/sell discussions. While they follow Robert’s Rules of Order during their meetings—including printed agendas, a call to order and attendance—Arlowe says it is still a casual atmosphere. “It’s pure fun,” she says. Since the group has gotten to know each other so well over the past decade, members also simply enjoy food and drinks and catching up with one another.
Knowing what to invest in can be tough. For the Money Honeys, Arlowe says they gauge trends and reference their personal interests to guide their decisions. “We buy based on the things we like or know or [when we] feel like we agree on … where a sector might be going,” she says.
The group has found success investing in large companies like Visa, eBay, Apple, Ford, Lululemon and natural food company Hain Celestial. Though, one of their biggest investment successes was in the auto industry, where they made 1,000 percent profit on their initial investment. “I didn’t expect to have so many of our decisions go our way … that has been really fun and exciting,” Arlowe says.
Though many investments have gone their way, they have had a few pitfalls along the way. Arlowe cites the 3D printing and cannabis industries as ones where the innovation was there, but at the time of investment, the group was too early to the trend for it to gain traction financially.
Though it is an Edina-based club, not all of the 11 current members live in Edina—or even Minnesota, for that matter. (Two original local members have since moved to Michigan and Atlanta.) Meeting just four times a year, the group uses their unique work and personal backgrounds as a resource to success. “We were just trying to take advantage of our knowledge and try to build something together,” Arlowe says. “It is designed to be something fun—with the end goal of making money, of course.”
Advice From a Financial Advisor
Edina resident and financial advisor Glynne Bassi has a passion for investing and helping individuals reach their financial goals. Exposed to the world of investing from a young age, Bassi was actually gifted her first stock from AT&T by her mother when she was 10. From there, she became fascinated with the world of finance and the power of managing it well. However, it wasn’t until her mid-30s, after some major life transitions, that she pursued it as a career.
Today, Bassi strives to educate and empower individuals to feel confident in their own financial futures, despite what life might throw at you along the way.
Going back to the basics, we asked Bassi for a few tips to keep in mind when stepping into the world of investments.
Evaluate your financial status. This will help you create more realistic goals, whether that’s for your month-to-month budget or larger savings and investments. “Progress over perfection is key,” Bassi says.
Reflect on values and goals. “Values are about beliefs, and they should drive your goals,” Bassi says. “Goals are tangible things or experiences that carry a specific monetary value.” Assessing your values and goals can help you make decisions for long-term goals and evaluate ongoing primary financial needs such as retirement savings, education, the unexpected (job loss, disability or other emergencies) and estates or inheritances. A trusted financial advisor is a great resource to help decide what tools and strategies are effective in working toward your financial goals.
Pay yourself first. Whenever money comes in, earmark some of it for your financial goals, depositing into your savings or an investment account to ensure you’re prioritizing saving money. For a more committed (and less hands-on) approach, consider an automatic withdrawal from your checking account each month. This “systematic investing” method makes investing more manageable with these fixed amounts. Regardless of your approach, Bassi says, “It’s all about the four Cs: convenience, consistency, choice and control.”
Start Your Own Investment Club
Interested in learning more about investing and trying your hand at the market? Arlowe breaks down the five key steps to take to start your own club.
Gather a group of like-minded individuals.
Create a list of bylaws that encapsulate the rules and expectations of the group.
Create a tax ID.
Open a joint bank account.
Open an Ameritrade account, which will automatically provide you with a 1099 tax form.