Hello. I've been trading for a while. Some of my friends and relatives want me to manage their money. It's not a lot, between $250 - $500k. I don't know how to setup this up in terms of accounts. Should I have one account per individual, and put in trades in every account separately. Should I pool the money together? What are the costs associated with having all assets in one account and what name will be on the account? Should it be like a hedge fund? Eventhough the assets will be quite low. Will hedge fund be cost effective? Do I need to have accountants audit my performance if it will be one account? I would appreciate your help. Thank you.
Have you searched through past postings in this forum? I believe the topic has already been discussed.
Don't do it!! There's nothing like money to lose you friends and alienate your family. What's it going to be like at your family Christmas/Thanksgiving/whatever dinner when you're in a 20% drawdown?
It makes me wonder, what would it be like if your refused their money and you were up 30-40%. lol. Lets just say the holidays wont be that fun either. Lose-lose situation. Nobody wins.
That's easy. You keep your mouth shut or say 'the market is difficult at the moment'. LOSE-LOSE. Totally agree. Don't try and manage money for anyone else - especially friends and family.
Good point. I've never had any good experiences mixing family and money. I guess the thing to consider is whether or not the family members who want you to manage money for them TRULY, and I mean TRULY understand that they are putting up risk capital with you...not $$ needed for Jenny's college fund or anything else. Nothing less than the true understanding of Risk Capital will do. Also, what if you do make them, say 50% or more, in a year? They may come to expect you to do this year after year, and that will set a dangerously high bar for you.