A group of friends and I have been investing for awhile and each of us has their own 'area' they focus on. In general for you own portion of capital in a sector you will defer to the opinion of the 'specialist' on where to invest it, and they to you for whatever you specialize in. There are also friends who follow along with us but do not have the time to research anything and so do not provide insights.
This got us thinking, wouldn't it be convenient to just pool our money in a club and let everyone handle their specialty independently but the effects would be felt collectively. John handles all the healthcare investments, Brian the banking, Steve the tech, etc. From what I have read on investment clubs its pretty clear that those who would actually manage investments can all form a club together and we wouldn't need any sort of licensing. The question comes in with the silent members who do not research or invest themselves. If we had 4 people making the decisions and 6 whose money was in the partnership but they made no input, would this mean the 4 'managers' need licensing?
Furthermore, if we were to divide the partnership in a way that the active members received more through ownership means, would this break the rules for an investment club? Ex: Brain and Steve form an investment club and both contribute $50,000. Brain manages and makes all investment decisions so he gets a 60% interest in the LLC while Steve gets 40%. From my own understanding and research it seems this should be allowed under 'sweat equity' rules but I know investing is subject to special stipulations.
And yes, I am aware of the old 'never invest your friends money' saying but we are all adults' with experience and this represents a tiny fraction of each of our net worth's. Appreciate any input!
Submitted November 25, 2021 at 11:18AM by Lord_Vindicare https://ift.tt/3p3DtUD
