Investing with kin: Family Tree Investment Club is building togetherness and financial futures.

Author:Conwell, Vikki
Position:Investment Clubhouse

At the annual Clinton family reunion in South Carolina, there's plenty of food, fellowship, and fun. There's also a lot of finance, money management, and investment education going on. "We come together to share knowledge," says Jerraune Jenkins, 44, president of Family Tree Investment Club. "There's nothing really complex about what we discuss; we just try to get the information out there for everyone."

Organized in 1994 by 25 family members who ranged in age from 17 to 82, Family Tree's mission was to help those in the family who had a limited understanding of the stock market. They decided to pool their financial resources and learn more about investing. Each member makes a minimum initial investment of $50 and pays $25 in monthly dues. Following the principles of the National Association of Investors Corp., Family Tree's investment strategy was to invest in established, blue-chip companies as well as up-and-coming companies projected to perform well. "Going in, I expected the investment strategies of the older members to be different," says Jenkins, a budget director for the University of Medicine and Dentistry of New Jersey, New Jersey Medical School. "It was surprising that a lot of [them] understood and agreed with the club's long-term investment strategies."

Family-run investment clubs are good opportunities for relatives to come together and learn about investing and financial matters, says James Johnson, a board member of the National Investors Association, an advisory board to the NAIC. Johnson says the close, eternal bond of the members generally increases a club's longevity. But he also says the fact that members may be close or comfortable with one another shouldn't keep the club from operating as a business. "It's a business just like any other, and it should be formal like any other organization," says Johnson, a member of Ujamaa Holdings, a 7-year-old family investment club based in Oklahoma City. "There ought to be a formalized structure to the organization, and education should be paramount."

The members of Family Tree have gotten a solid financial education while handling the business of the club. In the early years, the club's portfolio...

To continue reading