How would I do this?

Quote from GGSAE:

I'm not trying to sound like a dick but wasn't it just a few weeks back you seemed to be losing sleep over your trading because you felt it wasn't as good as it could be?
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Yes, that's what I was wondering about too...he was posting about problems he was having with trading technique and also confidence.

cm, I do NOT mean to discourage you or run you down, but buddy, take it from me... even if you make money for your friends/relatives, there is a chance that it will go bad. People are ungrateful. You might make money for the first few quarters and then lose in one and have a call from someone unrelated asking you what's going on. You will get subtly veiled suggestions that you should make up the $$ from your personal funds. People say they are 100% prepared to lose all their money. Maybe 1/2 of them actually are.

This combined with your recent posts asking for help with your trading indicate to me that it would be best for you to avoid OPM for a while, at least until you have a couple of years of steady returns under your belt.

Hope you take that in the right way.
 
you can set up an advisor account, and have each person set up a client account under your advisor account.

then, you can send trades to one or all client accounts, and it keeps them seperate

it is ILLEGAL under federal law (and most state law) to accept ANY compensation for advising or trading other people's money

UNLESS

you have the proper licenses (they vary by instrument). but if u don't know what they are, you don't have them obviously

it is ONLY legal then, if you do not accept any compensation

you can still be sued for fiduciary mismanagement btw.

even if u accept no compensation

there is no form you can make a person sign to sign their right away to sue you for mismanagement
 
you can set up an advisor account, and have each person set up a client account under your advisor account.

This is probably the best because:

1. If someone needs his money back earlier, it is easier to get it.
2. Different people can have different risk exposure. Maybe your uncle can take more pain, than your siste-in-law.
3. If there are people coming in later, easier accounting.

it is ILLEGAL under federal law (and most state law) to accept ANY compensation for advising or trading other people's money

Not true. It varies by state, you can have usually up to 5-7 people before you need a licence. Call your state comptroller's office, they tell you. What is illegal to advertise yourself as a financial adviser.
 
Someone once posted that IB has a "Friends and Family" type account for trading other people's money without taking the tax hit. I personally don't know anything about it but you could try IB.
 
Quote from traderNik:

Yes, that's what I was wondering about too...he was posting about problems he was having with trading technique and also confidence.
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I know. This wouldn't be any time soon...at least another year or more. I got time to think about it.
 
Quote from cashmoney69:

I know. This wouldn't be any time soon...at least another year or more. I got time to think about it.
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Good luck, whatever your decision turns out to be.
 
Quote from 4re:

CM,
I know this doesn't answer your question but coming from a business background as well as trading I would like to say this. Mixing business (even trading) with family or friend relationships is even more risky than trading itself. Make sure to ask yourself if this is a relationship you can afford to lose before entering into it.

Good luck,
4re
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This is so true, I have nothing to add
 
Now its time for me to be real mean and I am going to say this just once so its heard loud and clear.

NEVER. NEVER. NEVER. Never mix cash and family or cash and friends.

NEVER. NEVER. NEVER. Never enter into a contract with a family or friend unless its a pre-nuptial agreement.

NEVER. NEVER. NEVER. Never enter into a business relationship with a family member or friends.

Remeber the old bartenders rule. If your tending the bar, dont bring your friends.

Quote from cashmoney69:

My cousin is going to give me about 5-8 thousand dollars to put into my trading account for an investment idea we both have.

For those of you on here who "manage" money for friends/ family, maybe you can answer these questions.

1. Should I just throw his money into my account and have some kind of written contract between the two of us. ? this would be the easiest thing to do, but I don't really like the idea of mixing his funds with mine.

2. If I create another account, should it be a partnership or LLC?

3. Is this legal ?

my biggest question

4. How do money managers divide profits among their investors?
say for example:

family member 1 gives 50,000
family member 2 gives 5,000
family member 3 gives 100,000

and I have around 32,000, a total of 187,000.00 (not including margin)

now say for example I wanted to buy 1,000 shares of yhoo at 25.00. Each person would get an equal 250 shares at a cost of 6,250.00 per person. What happens if someone's portfolio cant afford the number of shares the manager wants to buy?...

How are profits divided when the times comes?

cm69
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Ok, If i dont manage money for friends/ family, how else do I bring in outside funds without knowing a bunch of rich people who have $$ to burn?. I hear that it's illegal for a hedge fund (if thats what this is) to publicly advertise.
 
Quote from cashmoney69:

Ok, If i dont manage money for friends/ family, how else do I bring in outside funds without knowing a bunch of rich people who have $$ to burn?. I hear that it's illegal for a hedge fund (if thats what this is) to publicly advertise.
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Now that is an easy question to answer and hard to do. You ONLY need to show good returns on a fairy substantial for several years in a row. Show you know how to trade consistantly. Then you can start thinking about starting a hedge fund and if you have done things right your brokerage company can sponser you. They can bring in the investment dollars. You will also have to get all the proper licenses before doing this.

Sorry, but there are no shortcuts here or anywhere in life.
 
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