Legal to trade other people's money?

[stonedpirate]

Hello,

I have been quite successful trading on the forex and now members of my family and a few friends want to give me money to trade for them.

I was thinking about incorporating and essentially having them as shareholders in the company. Is it legal to trade this way without some kind of fund managers license?

Also, what kind of setup for taxation do traders use here?

Do you just include your profits/losses to your asseable income? Or are you a trading business?

Thanks

 

[tech/a]

Re: Legal to trade other peoples money?

Hello,

I have been quite successful trading on the forex and now members of my family and a few friends want to give me money to trade for them.

I was thinking about incorporating and essentially having them as shareholders in the company. Is it legal to trade this way without some kind of fund managers license?

Also, what kind of setup for taxation do traders use here?

Do you just include your profits/losses to your asseable income? Or are you a trading business?

Thanks

Madness.
The depth of stupidity in the average Joe never ceases to amaze me.
But then again You'd have to be mad not to give money to a "Stoned pirate."

 

[stonedpirate]

Re: Legal to trade other peoples money?

lol

what?

 

[doctorj]

Re: Legal to trade other peoples money?

Don't mind tech. What he lacks in subtlety, he generally makes up for in good intentions. There are a few hunderd other threads at ASF that ask similar questions, so feel free to search for them, but generally the message boils down to it not being worth the risk to mix business and family/friends.

 

[stonedpirate]

Re: Legal to trade other peoples money?

fair enough

 

[nunthewiser]

Re: Legal to trade other peoples money?

where do i sign up?

i have heaps of cash that needs to be grown by someone thats good at that stuff .

pleases tell me how i can join up or at least prosper also.

 

[stonedpirate]

Re: Legal to trade other peoples money?

Interesting attitude from a bunch of traders.

Sorry you havent had much success to share around.

 

[nunthewiser]

Re: Legal to trade other peoples money?

Interesting attitude from a bunch of traders.

Sorry you havent had much success to share around.

i heard a story the other day where a bloke went from 1k to 1 million in 38 trades.

he was on the internet but would not give any proof of this great feat.

whats your story?.....obviously you have one to tell.

 

[Julia]

Re: Legal to trade other peoples money?

Interesting attitude from a bunch of traders.

Sorry you havent had much success to share around.

You might like to explain how you conclude the logic of your second statement?

I'd rather say that ASF members are successful enough to know, as Tech said, that to mix personal/family relationships with whatever trading expertise you may or may not have is the ultimate in stupidity.

However, by all means ignore the advice offered, on the basis that it doesn't support what you seem to already have unwisely decided to do, and box on.
Good luck. You'll need it.

 

[stonedpirate]

Re: Legal to trade other peoples money?

i heard a story the other day where a bloke went from 1k to 1 million in 38 trades.

he was on the internet but would not give any proof of this great feat.

whats your story?.....obviously you have one to tell.

my story is that i have traded the forex consitently for a few years and people that know me want a piece of the action.

The reason i post here is because the forex forums i use are mainly american and need some aussie traders with experience in this kind of thing to give me a few pointers.

I have only ever worked for a living so corporate law and fund management confounds me

Quitting my job at christmas and trading full time next year.

Just trying to set myself up to pay the least tax possible and not get busted trading other peoples money.




Anywho, looks like i came to the wrong forum

cheers

 

[mazzatelli]

Re: Legal to trade other peoples money?

I was thinking about incorporating and essentially having them as shareholders in the company.

LPOA

 

[stonedpirate]

Re: Legal to trade other peoples money?

You might like to explain how you conclude the logic of your second statement?

Figured if they were confident traders, they would trust their families money with their skills rather than have them invest with the other dodgy fund managers out there.

I'd rather say that ASF members are successful enough to know, as Tech said, that to mix personal/family relationships with whatever trading expertise you may or may not have is the ultimate in stupidity.

Thats your opinion.

My dad lost 16% in super and his house lost $100k off its price, my account is making steady gains.

I'll just give my family crap opportunitys and keep the cream for myself like you guys.

Cheers

 

[stonedpirate]

Re: Legal to trade other peoples money?

LPOA??

oh right

I heard on other forums that LPOA doesnt protect you from certain legal outcomes.

But thanks, i'll read up on it.

 

[doctorj]

Re: Legal to trade other peoples money?

I'll just give my family crap opportunitys and keep the cream for myself like you guys.

This is out of line. It's not about how good one is at trading or whether or not they are selfish. It's about managing downside risk. Family is invaluable. There's every chance that you could be profitable and they could benefit, but what if it doesn't work out as planned? What might they do to your relationships?

Anyway, good luck. My only last piece of advice is, if you want legal advice, ask a lawyer. If you want practical advice, ask a practioner (as many are here).

 

[stonedpirate]

Re: Legal to trade other peoples money?

Where do you recommend your family put its money?

They come to me for financial advice because they know i'm a finance guy, they dont have a clue.

Its either manage their money or recommend they put it elsewhere and in this economy, elsewhere is losing money.

Or i could get rid of them by sending them to a financial planner with a diploma in bs only to be stung by some cheesy salesman.

 

[Gunlom]

Re: Legal to trade other peoples money?

I think you need to consider the down side as well as the up side...

This could well be a great opportunity for you and your family, But like any business or enterprise it always pays to plan and think about both the positive outcomes and the negative ones, that are possible.

If by chance, some series of trades that went against you, your stop losses kept getting hit, and you lost your parents 30% - 40% of their retirement nest egg, and they had to keep working a few extra years instead of retiring now ( or if they are currently retired, and have take a income reduction)

Could you and your family happily sit around the Xmas table and still be a happy family, Or would the pressure and stress affect your relationships with them.

Just have a think about the possibilities, before embarking... and talk to your investors about both upside and downside risk. So they fully understand it all.

Good luck with it

 

[stonedpirate]

Re: Legal to trade other peoples money?

Look guys, i appreciate the advice. All very good advice at that.

But i'm no idiot and have thought about and discussed at length all the possibilities with my family.

I am not betting the farm, and they consider my account a reasonably safe place for their risk capital.

I'm not gambling their super, their house or their life savings. They each want a modest punt on the forex via me as my returns for the last year outperform anything they can get in the mainstream asset classes.

 

[mazzatelli]

Re: Legal to trade other peoples money?

What legal outcomes are you concerned about [as always consult a expert for > concise information]?

 

[skc]

Re: Legal to trade other peoples money?

What's wrong with you people? This guy asked for advise on setting up a structure to trade other people money, and hardly anyone answer the question. Surely calling this "ultimate in stupidity" is taking it a bit too far.

Larry Williams traded his Mum's money and lost big time. The conversation went something like this...

Larry: Mum I have terrible news.
Mum: What is it?
Larry: I lost a lot of your money today.
Mum: Oh thank God! I thought you have cancer or something.

IF you have family like that why does it have to be a problem? Every family situation is different but as long as you explain and they understand the risks involved, they are investing on an informed basis and it should not affect the relationship. And like the OP said, they are entrusting money to other money managers who they don't even know, charge more and perform worse.

Every entrepreneur when they need money for their business, the first sources are always FFF - family, friends and other fools. The "fools" is meant to be taken lighthearted, but also highlights that many new start up businesses fails. Nonetheless, you have to make a start to build something.

I am planning about the same thing but is still early days yet. I will PM you on a structure that may or may not work.

Good luck.

 

[Governor]

Re: Legal to trade other peoples money?

stonedpirate, don’t listen to these people!
If you have people offering to give you money to trade with then take it! You never know, you might be taking your first steps towards becoming one of Australia’s largest fund managers!! Don’t listen to the people saying you are stupid. I think it’s a great idea and I wish you all the best!

I can't comment much on the legal aspects in this environment. But I thought I would just give you some encouragement unlike the majority of people who have criticised you!

Have fun with it!! You only get one life, so might as well make some $$$$$