This text will be about pooling as a tool to enable certain investments or make them work better for investors. Starting with how we see the theoretical benefits of it, we also describe concrete ways in which pooling already works for many investors, and how it can potentially work for you. Finally, I also tell you my recent experience with pooling for a crypto-asset purchase.
What is pooling?
No, this has nothing to do with a swimming pool. Rather, it relates to putting together resources from different sources so that the collective effort is more robust than any one individual from the group.
Something we addressed previously and is intimately related to this are crowd-funding platforms. In such business models, the assumption is that where one project would not easily find the financial support it needs by one single source, but many different individuals would be willing to spare smaller amounts. The platform then pools such smaller investments, acting as a bridge between investors and borrowers.
What else can you do with this?
Well, I’m obviously an enthusiast of FinTech, and therefore believe in the potential for significant change in the sector. Having said that, let me go and propose some pooling that could happen (even though I haven’t seen this anywhere):
– Bank clients coming together and demanding something from their bank in terms of service or cost. I for one am a big opponent of banks charging account maintenance fees, so it would be fantastic one day to see clients offering one or another stubborn bank to either slash the fixed costs of their accounts or lose them as clients to another bank. Any one bank customer would hardly even manage to record this request, but if there were enough people involved, I doubt this would go unnoticed by management.
– Investors in disagreement against a product or provider, demanding change to portfolio or a business practice. When I worked in London between 2012-2016, I have seen many protests in front of big financial corporations against investments or business practices. The problem in such cases – and bankers often dismissed them as irrelevant – is that the proponents against supposedly unfair or inequitable investments are not clients themselves, but rather the usual suspects who have over long periods of time opposed what money managers do. If instead you had clients, who decide about where their money goes, exercising pressure on their banking or asset management firms to be consequent while investing, this could also have a strong pooled effect.
– The alternatives at hand to organised and well informed investors collectively are practically limitless, try to think of what you would like to do if you had a lot of investing power behind you.
My very own recent pooling experience
A previous text on this website has discussed crypto-assets. Since that post, I have come to follow much closer some upcoming Tokens and Coins, but to be fair I wouldn’t have been nearly as effective if I wasn’t exploring the topic with a group of enthusiasts.
These crypto-enthusiasts, who also invested directly in crypto-assets, noticed that many of the best deals weren’t available or easy to reach through an ICO (initial coin offering, when it goes to the public). This group has then formed a pool to invest larger amounts in selected projects, and because of the larger size priviledged access to the best projects is possible, as well as discounts on the tokens. I have recently participated for the first time in a promising project and am honestly excited about it, maybe I can make a more detailed post about it in the future.
To give a bit more details about the pool, communication is through Telegram and investment is in Ethereum-based projects. Beginners are welcome, and help is available from the first steps of creating a wallet and buying ETH (Ether). If you are interested in knowing more, just get in touch and I’ll be glad to check if this might be interesting for you.
I hope if you didn’t know what pooling in an investment context meant, this is now a bit clearer. It is understandable that for many inexperienced investors, this might seem a bit overwhelming, so my recommendation is: take it one step at a time. You don’t need to make a relevant crypto-investment as the first allocation of your portfolio, that probably isn’t recommended for almost any investor.
What this concept can inspire, however, is the potential of cooperating while investing, which is at the core of my reasons for becoming an entrepreneur. So if you don’t know where to start, think of who among your circle of friends and family you can talk to about finance. If this post gives you a reason to talk to someone about finance, I consider its goal achieved.
PS: we recently launched our Events page, check it out!