Personal Finance Club - Pros/Cons/Opinions

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David.Paul
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Personal Finance Club - Pros/Cons/Opinions

Postby David.Paul » Tue Mar 04, 2014 5:24 am

Although I have a successful career in an unrelated field I am pursuing CFP certification. I enjoy having the knowledge, and I would like to earn the credential, but I don't really want to sell financial products for a living.

I enjoy educating and sharing knowledge. I see a need for unbiased financial planning advice (unbiased in terms it being provided by someone without an economic interest in the outcome). I have been thinking that one of the things I could do would be to start a Personal Finance (or Family Finance) Club. The overall mission being to meet periodically and share/spread knowledge about personal/family finances. I would take a lead role (at least at first) to get convened and organized, but over time we would establish club rules and club officers, etc. My intent is that it would be strictly not-for-profit.

What are some pros/cons/opinions about this idea? Anyone try something like this before and have some lessons learned they can share? References? Recommendations?
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kombat
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Re: Personal Finance Club - Pros/Cons/Opinions

Postby kombat » Tue Mar 04, 2014 5:54 am

I've been involved in 2 different "Financial Clubs." One was an actual benevolent group of like-minded investors who got together once a month to share knowledge. Each month, one member would volunteer to put together a little 1 hour presentation on one topic or another, and afterwards people would hang out and chat over coffee and donuts.

The other one was much more sinister, and much more representative (in my opinion) of the general class of shady scamster organizations masquerading themselves as "Investment Clubs." This club included coaches who would sit down with you and go over your finances and "help" you invest in some exclusive opportunities that were only available to us because of the buying power of belonging to a large club.

We borrowed $80,000 on our mortgage and invested it in a land banking investment that they claimed would double our money in 3-5 years. That was 8 years ago. We still don't have any money back, and if we're lucky, we *might* get back our original $80,000, but I'm not holding my breath.

They also coached us to participate in a charitable donation gifting scheme that would result in us getting a tax refund equal to double what we donated. We sunk $11,000 into that one, got audited, penalized, had to repay the refund, didn't even get any credit for the actual cash we donated, and of course, never saw the $11,000 again either.

They recommended numerous other investment "opportunities" as well - land development projects in the Caribbean, fractional boat ownership to lease to the super-wealthy, etc. - but we eventually smartened up and stopped going to the meetings. Eventually the club was investigated by regulatory authorities and shut down. The owners are facing charges. In hindsight, it's clear that the reason they were so enthusiastically recommended these various "opportunities" was because of kickbacks they were receiving from the program organizers for guiding us financially-secure yet investment-naive sheep to the slaughter.

From Googling around, it appears to me that the vast majority of "Investment Clubs" are of the latter structure, and if you chose to start one more like the former, you'd face an uphill battle of negative perception. That said, word would eventually get around and it could be worthwhile, as long as you avoid getting into a conflict of interest situation where you are being financially remunerated for recommending specific investments and programs.

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David.Paul
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Re: Personal Finance Club - Pros/Cons/Opinions

Postby David.Paul » Tue Mar 04, 2014 8:35 am

Egads!!! That sucks.

I suspect that most club attendees will want to discuss investing, but I am hoping that we can also discuss other aspects of financial planning; insurance, taxes, retirement plans, estate planning, etc.

I have no intention of promoting any particular vehicle. I am concerned, however, that if we have any degree of success we will be invaded by salespeople. I need to get to that 'degree of success' first, though. I will deal with the salesforce if/when they arrive.
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Re: Personal Finance Club - Pros/Cons/Opinions

Postby David.Paul » Wed Jun 25, 2014 3:27 am

An update on this....

I started a financial planning club at work and we have about 12-14 members. The boss lets us meet in the conference room at lunchtime, so it is convenient for people to attend. (The boss actually joined us last week.) We have met 4 times thus far, and plan to meet weekly for the foreseeable future. So far I have been the only presenter and I don't expect that to change anytime soon. No one is volunteering, and I have plenty of material.

At the first meeting I handed out a list of suggested topics and asked people to select a few they most wanted to know more about. The top topics were pertaining to retirement planning and the specifics of the retirement plan available to us at work.

I am enjoying it and people keep coming back, so we may be onto something. :)
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jpham540
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Re: Personal Finance Club - Pros/Cons/Opinions

Postby jpham540 » Wed Jun 25, 2014 1:08 pm

Sound like the financial planning club is working great for you. Have you taken any classes for your CFP certification yet? Let me know how it goes, that is something I might look into later on and are you able to take classes online for the certification?
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David.Paul
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Re: Personal Finance Club - Pros/Cons/Opinions

Postby David.Paul » Wed Jun 25, 2014 1:46 pm

jpham540 wrote:Sound like the financial planning club is working great for you. Have you taken any classes for your CFP certification yet? Let me know how it goes, that is something I might look into later on and are you able to take classes online for the certification?

I have completed all of the courses for the CFP Board and I have taken and passed the CFP test. :)
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David.Paul
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Re: Personal Finance Club - Pros/Cons/Opinions

Postby David.Paul » Thu Jul 24, 2014 7:59 am

Well, here is one thing I hadn't figured in....

Two people have approached me now to say that based on information I put out at the financial planning club they have rebalanced their retirement portfolios. Both of them were 100% invested in a short term government bond fund, and they have a more diversified allocation now.

Based on their length of time to retirement, this is clearly the right move. I am, however, concerned that a near-term bear market will give them a lot of angst - which could make the work environment a little tense.

My own emotional response to feeling responsible for their investment decisions was unexpected. I am more nervous for their portfolios than I am for mine. :o
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Re: Personal Finance Club - Pros/Cons/Opinions

Postby VinTek » Thu Jul 24, 2014 8:23 am

David.Paul wrote:Based on their length of time to retirement, this is clearly the right move. I am, however, concerned that a near-term bear market will give them a lot of angst - which could make the work environment a little tense.

This is what risk is all about. I take great pains to explain risk before I offer advice (you've probably seen a huge emphasis on risk in my past posts). In fact, I routinely tell folks that if I were investing for the long haul, I'd be wishing for a downturn so I could load up on cheap equities.
David.Paul wrote:My own emotional response to feeling responsible for their investment decisions was unexpected. I am more nervous for their portfolios than I am for mine.

This comes with the territory. I don't particularly worry too much about my own portfolio because I've been through 2 bear markets. But yeah, most inexperienced folks will feel sick to their stomachs the first time they enter a bear market. The only thing I can recommend is, once again, to emphasize risk and how it ties in to reward.

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David.Paul
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Re: Personal Finance Club - Pros/Cons/Opinions

Postby David.Paul » Thu Jul 24, 2014 9:58 am

I stress risk, but I also see a lot of blank stares looking at me as I talk, so I wonder how much is getting through. :D
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David.Paul
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Re: Personal Finance Club - Pros/Cons/Opinions

Postby David.Paul » Tue Dec 23, 2014 12:53 pm

Update: The financial planning club at work is still going strong. We have covered a broad range of financial planning topics. One other member gave a presentation once. He was knowledgeable about the topic, but his presenting skills weren't strong, so we struggled a bit through that one.

I'm planning a 4-part series on federal income taxes in January. Pulling that off without putting the crowd to sleep ought to be a challenge. :)
I get a lot of tax questions during meetings, so there's a desire to have information, but most people don't want general knowledge. They just want an answer to their specific question. I accept the challenge to make taxes interesting! :geek:
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Re: Personal Finance Club - Pros/Cons/Opinions

Postby bpgui » Tue Dec 23, 2014 4:58 pm

David.Paul wrote:I accept the challenge to make taxes interesting! :geek:

I think you may have bitten off more than your can chew. I'm not sure anyone can make taxes interesting (and I like doing tax work). Good luck.

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David.Paul
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Re: Personal Finance Club - Pros/Cons/Opinions

Postby David.Paul » Fri Jan 02, 2015 10:19 am

bpgui wrote:I think you may have bitten off more than your can chew.

It's what I do.

Then I chew the muthaf@@$er. :)
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