I will start my money management business
Posted by Frugal on March 13th, 2008
Anyone interested in having their money managed by me personally?
My current plan is to use the platform at interactivebrokers.com. Your assets will be owned under your name, and under the custody of interactivebrokers.com. I will just have the trading permission.
The fee structure will be
1. Basic fee: 1% of your account size, charged quarterly.
2. Performance fee: If your account returns less or equal to 10% after interactivebroker’s commissions, there is no performance fee. Otherwise, for every 5% additional return beyond 10% return, the fee increases by 1%, and it will be prorated. This fee is charged annually for every annual period.
For example, if your account returns 23%, then the performance fee is (23-10)/5=2.6%.
I don’t plan to get a stock broker license yet (reasons at the end of post), but according to the state laws of California, I can manage up to 5 individual clients without a license. Because I only have 5 limited spots in total, I will rank the preference of the accounts in the order of potential account size, and then on a first-come first-serve basis.
If you’re interested, send me an email to 1stMillionAt33 # gmail.com (changed # to @), with the subject of “Money Management”. Let me know your estimated net worth (including your home equity value), and the account size that you would like to open. The net worth number helps me to decide how aggressively I will act in your account. Make sure that LESS than 15% to 20% of your net worth will be in this account for the sake of diversification. I don’t have a minimum account amount yet, but it’s likely that I will decline if the account size is less than $50K, unless you plan to add more cash after a short period.
I believe this year could be a banner year for commodity in general. Don’t miss the train. I’ve also back-tested my own proprietary buy/sell indicators for a long period, and it out-performed the ETF by about 600%.
P.S. Assume that I have 5 clients of $50K each, returning 10% annually, the total fee that I will get is just $2500. That will be just enough money to pay for stock broker license fee, and I haven’t counted incorporation, tax and accounting services. Are you going to work for a whole year and just get $2500 for it? So if it’s a terribly bad deal for me, it’s probably a good deal for you. Obviously and unfortunately, I cannot guarantee a good performance, but you can look around on this website for my past recommendations and performance.
By the way, to match my current wage, I will need to manage 10+ million. That’s one of the reasons that I haven’t been more pro-active, since going from 0 to 10 million asset will really take some time.
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March 13th, 2008 at 5:37 am
Dont your clients have to reside in CA?
March 13th, 2008 at 10:01 am
hope you get some clients and are able to put in more time. Cheers.
March 13th, 2008 at 4:01 pm
Let me see … Recommended shorting the indexes on 3/11/08 … Biggggg up day 3/12/08 … um … ummm … ummmmmmm
I don’t think I want you to trade for me just yet.
Elad
March 13th, 2008 at 5:40 pm
Elad
Your comment comes across as snarky. To err is human. My understanding is that successful traders are wrong more often than they right. However successful trading is making the good trades more profitable than the bad ones.
March 13th, 2008 at 5:43 pm
Frugal
Any chance you can switch off ‘content link’ or is it very lucrative? Many readers consider these ads to be very annoying.
March 13th, 2008 at 10:27 pm
Frugal,
I wish you good luck with this endeavor. Investing money for others may be stressful but lucrative.
Elad, your comment is messed up. Not every trading position is correct.
M
March 14th, 2008 at 3:24 am
Skytrader & Miles,
What you say is textbook perfectly correct. However, every money manager lives and dies by his actual record.
So, just how did that short trade work out?
Are we now back in gold that it did reach $1000?
Just want to do a little due diligence before investing.
Elad
March 14th, 2008 at 10:58 am
I think you will get better response by doing a newsletter instead.
March 14th, 2008 at 10:26 pm
Matt,
Every state is probably different. But I believe most states allow unlicensed person to have some small amount of clients.
Again, I am only doing this as an extension to what I’m already doing, and hopefully helping out people who can’t invest on their own.
I don’t think I could ever get rich from this venture, since most people who are online are young people without much assets. If you know anyone who wants to earn $2500 for 1 full year of work, at the rate of about $1.25 per hour, please let me know. I’ve got tons of things that I want to do, and I will be willing to pay $1 per hour.
Elad,
Certainly, I have been wrong many times in trading. And you won’t be able to find even a person who is going to be right everytime. I can also tell you right now that I am not the best trader/investor that you can find. I just hope to get to some of the middle-class people who are getting their wealth squeezed by the fall of the $US.
Skytrader,
Those content links are not very profitable. Consider it as the cost of you sharing for my site hosting costs.
Lawrence Chiu,
I don’t want to start a newsletter. This site IS my newsletter and I want to keep it FREE for everyone. Again, for people’s benefits.
I’ve seen a few investment bloggers moving into the realm of newsletters. But I don’t think it’s right. None of them even keep a performance record like I do at all. I’m honest to the bone, and if I didn’t do good, it will show, and I won’t lie to you. Many bloggers will assert things without a specific date, and then coming back to the old posts, and filtering through the right calls will always make them look very good. I just don’t do that. I put a date, or the most specifics that I can provide. Then if I’m wrong, I’m wrong. I’m not going to filter through my posts for the right calls, and left out the wrong ones. You be the best judge.
I always wonder why extremely few bloggers put up their trading/performance records. Don’t you wonder too? Maybe they’ve got something to hide.
March 14th, 2008 at 10:30 pm
By the way, I probably shouldn’t post my shorts on 3/11/08. I did specifically state NOT to follow my actions. Why?
I’ve gone in and out and round-trip several times. There is just no way that you can possibly follow what I do, nor can I post every of my move in realtime. Things just change too fast.
March 31st, 2008 at 10:34 pm
Frugal,
Ignore the naysayers. I’ve gotten some great investment ideas from your blog.
Best,
James
May 6th, 2008 at 2:22 pm
Hey Frugal,
I already manage my moms money but I am having a hard time learning how to start a money management business. No one seems to be able to effectively guide me on the right path. Can you e-mail me and let me know what process you went through.
Travis
May 6th, 2008 at 2:23 pm
Hey Frugal,
I already manage my moms money but I am having a hard time learning how to start a money management business. No one seems to be able to effectively guide me on the right path. Can you e-mail me and let me know what process you went through.
Travis
May 6th, 2008 at 2:23 pm
Hey Frugal,
I already manage my moms money but I am having a hard time learning how to start a money management business. No one seems to be able to effectively guide me on the right path. Can you e-mail me and let me know what process you went through.
Travis