| Investing with friends??? |
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Tony.T
First Time Poster
Cash: $ 0.25
Posts: 1
Joined: 09 Sep 2006
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| Investing with friends??? |
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Here is the deal. One friend came up with the idea of putting our extra savings into a pool.
all three are in our late 20's. have $500 extra every month on top of our own individual savings. the plan is to do long term investing with 3 very close friends (that i can trust my life with). Trust is not an issue and $500 a month is not an issue.
$500x3 for the next ~ 30 years (or longer). We want to use this money as additional retirement fund...
not a big money/finance savy person, so I don't know any of the laws.
good idea or bad idea? what can i expect? what do i need to know? how much is $500x3 for the next 30 years? is it the same as $500x1 for the next 30 years? any help will be appricated.
Thanks.
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Sat Sep 09, 2006 11:00 am |
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JCook
Full Member
Cash: $ 11.20
Posts: 56
Joined: 24 Jan 2006
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I agree that an investment club would be fun but I would keep my money seperate. Money can ruin friendships and you will likely all go different ways and have different financial needs as you go through life.
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Mon Sep 11, 2006 1:51 am |
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Blue Eyed Cat
Contributing Member
Cash: $ 2.90
Posts: 29
Joined: 12 Jul 2006
Location: Central Florida
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Investing $1500 per month versus investing $500 per month 3 times is not going to significantly change your return. I would discuss investments and possibly buy the same investments, but I would have each person have their own account(s). Comingling money can be a nightmare when it comes to tax time and the benefits are insignificant.
Also avoid DRIPS--they too are a misery to calculate the gains when selling them.
If you are an accountant, then the above tax reporting will not be a problem. Keep all buy, sell, and account statements. I make this easy by scanning them into my PC and them backing them up routinely. Then once I have a back up, I toss the paper. I do keep my financial back up CDs in a fireproof box.
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Mon Sep 11, 2006 3:02 pm |
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Blue Eyed Cat
Contributing Member
Cash: $ 2.90
Posts: 29
Joined: 12 Jul 2006
Location: Central Florida
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I have been a member (and the accountant) of an investment club and the accounting is not easy. Perhaps your experience has been different but the person charged with the accounting has quite a task and even if experienced, it is difficult.
The IRS is not going to believe your paper. If there is a real question, they are going back to the source of the paper--the company that handled the transaction. Also no one needs to keep tax documents for 10 years--3 to 5 is the maximum with the exception of transactions that "rolled over" (assets and IRAs for example). These roll over transactions I keep until complete liquidation plus 3 years.
My suggestion for keeping documentation easily is that most people don't keep it at all or they cannot find the paper documents when they need them. For those who have a system that works, keep on doing what works.
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Mon Sep 11, 2006 3:37 pm |
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