On the verge of opening an underground fund

[Value Collector]

. If you've got time to make posts at 12pm then clearly you've got to much time on your hands.

Well if you ever do become a skilled investor, You might also get to the fortunate position of having time on your hands.

 

[darkhorse70]

Mclovin actually I just bought a ktm 250 2t, it hauls ****.. Some people need to try it on here to grow some peanuts haha. It was never a troll. I didnt ask you on your opinion on wether the business will succeed or not. Clearly some of u are very gd at that seeing the vast fortunes you have gained. Why do you think im startong with a hand full of mates and if the results are good then you take the next steps.

 

[darkhorse70]

Actually the most successful traders have the least time on their hands. Not that you would know hahaha]

 

[darkhorse70]

Is there any body on here with real info regarding the matter if its possible who can pm me? Will apprecite it heaps. Never really understood how people could be prikks in life haha.

 

[Vixs]

As i thought, quite obviously a troll.

I will leave this thread open for laughs

It's just a lot of attitude, bravado and very little experience. It goes back to the 'Who to open an SMSF with for an $8k account' thread where he wanted to trade his mum's super because he doesn't have capital of his own yet.

@darkhorse70, "If an individual cant freely hand over his money to some one and is clearly aware of all the risks and assuming the manager of the money was operating under the best intentions of his clients then this aint a just system."

Maybe ask your mate how the legal system works. Even better, take a business law and ethics subject yourself so you don't have to bother him. You can have good intentions and still be a total destructive screw-up. You talk about your investors being 'aware of all the risks' - mate you clearly don't understand the risks yourself. The point of having Product Disclosure Statements is so that your investors can compare your offering to others on a like-for-like basis, and in doing so become 'clearly aware of all the risks'.

Maybe when you get started you'll learn that above-average returns don't grow on trees, so until then it's probably a good idea to pull your head in and do some reading.

 

[Vixs]

Is there any body on here with real info regarding the matter if its possible who can pm me? Will apprecite it heaps. Never really understood how people could be prikks in life haha.

You've received real info.

If you want to trade your mates money under the table, give them your BSB and account number, get them to put it in your brokerage account and go wild. Maybe keep an excel spreadsheet with who invested in the first place so you can work out who the 2 cents in the dollar that's left when you're done should go back to.

Putting any more work into it than that is a waste of your time, because it's still illegal and you're still running the risk of fines and jail.

If you're wondering how people could be 'such pricks' with their responses, maybe you should try acting more like someone that wants answers and less like a stooge.

 

[Value Collector]

Actually the most successful traders have the least time on their hands. Not that you would know hahaha]

Actually I said Investors, not traders.

And to me the point of financial freedom is to have the time to do what you want.

My investments take relatively little time to manage and that is with a couple of million dollars of capital, and I have a hunch that they probably will out perform your "Underground fund" at least until your have learned what you don't know.

I am not trying to put you down, we all started from very little, I am just cautioning you that there is a lot you don't now, and your bravado will see that you will make big losses, it's much better you just work with your own money.

I just bought a ktm 250 2t, it hauls ****.. Some people need to try it on here to grow some peanuts haha.

Cool, I own over $100K worth of shares in the company that distributes KTM, thanks for the support

 

[DeepState]

Is there any body on here with real info regarding the matter if its possible who can pm me? Will apprecite it heaps. Never really understood how people could be prikks in life haha.

You might be able to do it from an offshore location where investors come to you and you do not sell this *** to anyone within the Australian jurisdiction whilst standing on crown land.

From around eleven years ago, the cost in Cayman for a simple fund was around USD $100k. They just pull this stuff off the shelf. Yours might need some magic, so the cost might be a bit higher. I am out of date with Cayman regulations, so you'll need to get your partner talking with some international law people who are good at this stuff. However, you can basically avoid the need for licensing as a investment (ahem) organization if you can wangle applications to come in as blocks of CI$80k (AUD104k). This might be possible via various means technically...good luck in raising AUD104k given the kind of money you are talking about and defraying the cost of establishment which is normally passed back to the unit. Alternatively, it is absorbed by you. In other areas, it turns out Netherlands is a route through which you can funnel assets. Well I'll be DAMNED.

 

[darkhorse70]

Since then i have started working 7days a week. Actuallymy dads in the process of creating his self managed fund. Hopefully he will be letting me control 10k of it. Who truly understands risk. The big shot traders who blow billions. Not many ppl do. Ive been reading on stocks for a year now. True experience is where its at. I cant blow up the account, it would be very hard. Maybe a 20-30% loss and off a grand thats 200-300. No body is going to cry for that. And just the fact that its other peoples money gives me the feeling off extra responsibilty and guilt hence id think twice before getting in a position.

 

[darkhorse70]

Retired young. Thanks man haha. That could be possible avenue if (and I say if knowing that I got a 1% chance of success) if it came to the point where it was worth it. I told my friend to speak to people in the industry. Network. Get info from pro's. If I have a lawyer in the firm its the best thing that can happen cost wise haha. Obviously im going to have to carry the firm and I only want to focus on the trading aspect. Its a project. A very serious one and thats how I plan on approaching it. People on here expect me to write a 300 page document explaining it and thats going to be my friends job.

 

[kid hustlr]

Think people are overreacting a touch.

I mean obviously there's a massive chance he loses the lot but if were are talking about a few k between mates then so what. Agree with the poster who suggested keeping the spreadsheet to track who and where the funds go and performance but anymore than that for this small time gig is irrelevant imo.

I lol'd hard @ the " I own that company thank you" comment btw.

 

[Value Collector]

I mean obviously there's a massive chance he loses the lot but if were are talking about a few k between mates then so what. Agree with the poster who suggested keeping the spreadsheet to track who and where the funds go and performance but anymore than that for this small time gig is irrelevant imo.

.

It just brings up so many questions, like who's name is the trading account in, who pays tax on the profits, or in the short term who claims the deductions on the losses, Is their anyway for the profits or losses to be passed back to the "Investors" tax return.

Are you only wanting investors because you don't have enough capital? Just work and save, It shouldn't take that long to build you capital up.

 

[Ves]

Cool, I own over $100K worth of shares in the company that distributes KTM, thanks for the support

Would it be AHE? If it is, would be interested to hear your thoughts on that company some time in the stock thread...

 

[Value Collector]

Would it be AHE? If it is, would be interested to hear your thoughts on that company some time in the stock thread...

sure is

 

[McLovin]

You might be able to do it from an offshore location where investors come to you and you do not sell this *** to anyone within the Australian jurisdiction whilst standing on crown land.

From around eleven years ago, the cost in Cayman for a simple fund was around USD $100k. They just pull this stuff off the shelf. Yours might need some magic, so the cost might be a bit higher. I am out of date with Cayman regulations, so you'll need to get your partner talking with some international law people who are good at this stuff. However, you can basically avoid the need for licensing as a investment (ahem) organization if you can wangle applications to come in as blocks of CI$80k (AUD104k). This might be possible via various means technically...good luck in raising AUD104k given the kind of money you are talking about and defraying the cost of establishment which is normally passed back to the unit. Alternatively, it is absorbed by you. In other areas, it turns out Netherlands is a route through which you can funnel assets. Well I'll be DAMNED.

You should be able to do it in Australia. I don't think you need a license for <20 investors, or if you're investors are sophisticated/wholesale (which I doubt is the case for the OP). The quickest way to set it up is through a nominee company with each contributer signing a declaration of trust. It's not an overly complex process, but you'll need a half decent lawyer who is familiar with such things, ie Dennis Denuto out in the suburbs is probably not going to have a clue about it. A nominee company is usually cheaper to run that a unit trust; a unit trust being the other logical alternative.

The OP needs a lawyer. I might also suggest he needs this...

http://www.cgu.com.au/insurance/Business/Products/Professional-Indemnity

I mean obviously there's a massive chance he loses the lot but if were are talking about a few k between mates then so what.

At 21, a few k between mates is probably a fair bit of money, especially if they're students. People get funny when it comes to money. I reckon if you're going to manage your friends' money then you need to be prepared to not just lose their money but their friendship.

 

[Vixs]

McLovin the nature of it sounds like carrying on a financial services business anyway - inducing clients to invest, using systematic, repetitive or continuous actions in the course of carrying out the business etc etc.

I'm not terribly familiar with any circumstances where he could be managing investments and not be running a Managed Investment Scheme due to size or nature of the investors - certainly the people he is talking about would be retail, not sophisticated/wholesale investors. There may be provisions for it but you'd think it would still fall under needing an AFSL.

There certainly are a lot of hurdles to jump before you can manage other people's money - if people can't commit to getting established how much buy in do they really have in looking after other people's funds?

 

[DeepState]

You should be able to do it in Australia. I don't think you need a license for <20 investors, or if you're investors are sophisticated/wholesale (which I doubt is the case for the OP).

That's actually my understanding too, but I was scared off by Ves' incarceration scenarios! Easier to run off to Cayman. I understand that <20 is viable under private placement memorandum without the preparation of disclosure document. There is a limit on the number of people you can solicit from as well. All the PPMs I've seen were numbered and our names recorded as recipients. Here's the link explaining it.

http://www.asic.gov.au/asic/asic.nsf/byheadline/Raising+funds+in+Australia?openDocument

As to avoiding an AFSL, DH70 can achieve this by becoming an Authorised Representative of some organization that has this sorted. Getting an AFSL as a fund manager is upwards of $60k. As a result, fledgling fund managers often piggy back off those who have already gone through it. Gaining an Authorised Representative status requires the AFSL holder to ensure that their representatives are suitable and competent. That could be a show stopper on this occasion.

Here is the relevant clause:



So, the local way of achieving the 'desired' outcome is to get some sucker/scammer with an AFSL already in place to whack you on the register as his Authorised Representative, prepare some cut down doco and market it to only 20 people and raise less than $2m. I do not know if this requires a registered trust to house the investments. I think you can get around it by being an 'adviser' or something like that as opposed to the RE and Manager of a registered unit trust. Dunno, but this is achievable in one way or another.


All that failing, here is the exemption from Australian law, in terms of requiring an AFSL, if you were to set up shop in Cayman and investors miraculously turn up to ask you to manage their money as per prior post:




Any way I look at this gambit, as the barest minimum, the scale required is an order of magnitude (maybe three) higher than what DH is considering.


Perhaps DH should consider another line of work. This guy invested $20 and grossed over $8k in one night, having the time of his life whilst at it. Further, he got a place in Princeton University:

http://www.metacafe.com/watch/an-NTjcutYbYhtJ2/risky_business_1983_ending/

 

[darkhorse70]

is is my 3rd time writing this post, kept freezing loll. Value collector ktm is a good brand so im all for it haha. Im planning on using other peoples momey because a) it provides more capital b) minimizes my own risk which is just a fact and c) I want to eventually own my own fund so it would be a good starting point/learning curve as well as give me some clarity in my direction in life. As kid hustlr said it was meant to be among a small group of friends with the possible potential of eventually going big. Im a realist and maybe it just sounds like im being a wish full thinker but believe me I know the odds are heavily against me for any kind of success in this endeavor. Mclovim,vixs and retired young thanks for the info. Hopefully an AFSL isnt the only option or else it will be a big buzz kill. Haha and about opening a fund in cayman island etc there isnt money to throw around haha. Like I said me and my friend have to exhaust all avenues once he comes back from his skiing trip and we will try to talk to a lawyer or some one to see what can happen. If friend ships end so be it. I only have 2-4 real friends and the rest are there for entertainment reasons. Maybe I can say that the money was a gift and they acknowledge that hahahaha then im not liable. Obviously only real close friends would do that and only for small sums of money. Thanks for the info anyway. Ill keep use updates or maybe not since it is probably illegal which I fail to understand why. How is this democracy haha

 

[So_Cynical]

Sup people, as the title suggests im in the process of possibly collecting small bits of funds from a group of friends/associates as well as my own in order to create a pool of money to hopefully generate some returns. I have no license etc and I realise that there are regulations etc to protect investors. My question is can I still trade the capital of investors if they are willingly handing over money knowing full well or the risks involved etc.

Thanks (looking forward to the negative feedback as well haha)

I looked into this a decade and a half ago (things may have changed) (and this is not advise ) but the way i remember it, an individual can approach 20 people/organizations for funds without a prospectus or licence but cannot advertise or make promises of any kind, however they are libel for any verbal or written contract and libel for returns that do not meet expectations...something like that.

Similar to setting up a syndicate perhaps or perhaps a share punters club structure? :dunno: but you cannot advertise, in order to ask people for money you have to already have some.

 

[darkhorse70]

Oh ok thanks cynical. 20 people is more than id expect to contribute. Maybe 5 for now. Hopefully that option is still available. Ill also juggle around clients, set rules for lock in periods etc just to prevent destabalisation etc. Thanks for the reply