A post on my Facebook page asked if people would consider joining an investment consortium. To my surprise, some people asked what investments consortiums are or how to join one.
What is an investment consortium?
An investment consortium is an established structure such as a company, cooperation or mokhatlo where a group of likeminded people come together with the goal of investing towards a particular investment goal (s). Examples of investment consortiums in Lesotho include the likes of Sekhametsi Investment Consortium (SIC). Started with only 30 members whose goals were to build wealth, SIC has grown and increased its investment portfolio across various industries such as telecommunication, property and the financial sector.
There are different types of consortiums to choose from, for example consortiums that invest in property/real estate, live stock, equipment or shares of different companies.
What should you consider before joining an investment consortium?
There are a few things to consider before starting your investment journey. For example ask yourself questions such as ‘What is it that I want to achieve? What is it that I want my money to do for me?’
A good starting point is to have investment goals that are SMART – specific measurable, attainable, realistic and time bound and then:
a) Have well-defined investment goals and clear policy statement (IPS). This is a policy that guides how and where you want to invest your personal assets/portfolio, the type of investment asset classes and the types of investment vehicles you wish to invest it.
b) Secondly, you need to understand the amount of risk you are willing to assume and how to manage it.
c) Thirdly, you need to understand how long you want to invest and where you want to invest your money.
d) Think about a suitable investment vehicle that will help you achieve your investment goals.
Now, one such investment vehicle can be an investment consortium.
How did I join an investment consortium?
The investment consortium was established and registered in 2019. To say I am excited and proud of the decision would be an understatement! To ensure governance and compliance, we registered it formerly, drafted a constitution and agreed on the initial investment amounts. We then opened a bank account in the names of the consortium, with clear rules on who the signatories are and the signing arrangements. We then worked on the by-laws and IPS that would help us decide where to invest the capital.
If we are to be honest, investing is not easy !
For me, this was evident when we each had to contribute LSL20 000 initial investment and commit to monthly contributions to build and grow the capital. This also meant that we continue injecting capital via member contributions every year since. This is NOT for the faint-hearted, because of the sacrifice it requires – the tradeoff.
Why should you consider an investment consortium?
As mentioned above, being part of an investment consortium allows you to meet likeminded people, who have the same ambitions and investment goals as you. I joined the consortium with twelve other people who share the same investment goals as I do – that is to build generational wealth. Just thinking about it makes be so happy.
Being part of the consortium also exposed me to people who have a different skills set, allowing me to learn, grow and network. Another benefit is being able to build and accumulate capital, so we can quickly start investing.
If you want to go fast, go alone. If you want to far go together – African Proverb
It is key to remember that investing and building wealth takes a long time. So, practicing and exercising patience are key.
If you are looking for short-term returns over the next six to twelve months, joining an investment consortium may not be the best solution, but do not lose hope because there are please other suitable investment vehicles available for example Collective Investment Schemes.
I encourage you to do your research and sharpen your skills on investment planning and investment principles. If an investment consortium is not for you, consider other investment vehicles such as collective investment scheme, buy shares on listed stock exchanges, treasury bonds or treasury bills for example.
I am passionate about wealth creation and I believe that one of the best ways to start your journey is via an investment consortium.
For more information on what to consider before investing, get yourself a copy of my book, ‘Let’s Change the Script: Chelete Ha Se Parcel! available online on TakeAlot.com and Amazon. It’s also on Amazon.
Love. Peace. Money!
Disclaimer: This does not constitute a financial advice, please seek advice from a registered and licensed financial advisor or investment manager to help you with you investment planning.
