Lux Investing
What is the best financial structure to invest money for a group of people when only 1 person makes decisions?
If there is a group of approx 25-75 people who would like to invest smallish amounts i.e. $10K to $20K each to create a pool of money, and 1 person to invest and make decisions for the group (i.e. a manager) what is the best way to do this pooling? Usually an investment club, each person votes etc so I don't know if that is the proper format. This would be similar to I suppose how a hedge fund works but not for high net worth investors, just normal people so I'd like to know the best way to organize this, with the least headache in paperwork, admin etc. I envision people being able to withdraw/invest money maybe once a quarter, and obviously everyone would invest different amounts into this 'pool' based on their interest/ability. If anyone knows of any websites that would be helpful as well, that would be appreciated. Thanks
Public Comments
- Paperwork wise, it would be easiest to arrange it as an investment club. If you want to start a hedge fund you'll go blind on the paperwork or have to wait months for an attorney to do it all.
- Having one person do all the investing is putting a great fiduciary responsibility on that one person. Why don't you contact an investment firm - Morgan Stanley - Edward Jones - and let them do the investing for the group or club. I am the trustee for our profit sharing plan and remove myself from the burden in this way. There is also the mater of yearly tax statements, so you may want to check with an accountant on how the group should be organized - maybe and LLC or some business form.
- National Association of Investment Clubs is a good place to start http://www.better-investing.org/Public/default I am looking to do a similar thing in the foreign currency exchange market (Forex). I would be happy to send you some more info. Send me an email pupp52@yahoo.com I found some interesting software that I may be using http://www.interbankfx.com/pamm_software_overview.php Best wishes and have fun. Paul
- Just open a brokerage account under your name and deposit all the cash in that account. Make sure you write a proper will naming everyone of your friends so they can get their money back if you die.
