08-28-2022, 10:02 PM
How should I charge a friend to invest their money?
<!-- SC_OFF --><div class="md"><p>I've discovered a market that I can profitably trade on. There are so few profitable opportunities to make trades that usually I won't even spend all of my own capital before I've bought them all, but sometimes this is not the case, and I don't have enough capital to buy all the oppertunities alone.</p> <p>A friend wants me to trade their money for them on this market. He and I are unsure what constitutes a fair price for me to do this. We see two ways of doing it: 1. I only touch his money when I've spent all of mine, and take a tiny percentage of his profit. 2. I trade our money as one fund on every trade, paying him out his share of fund, minus a large percentage of his profit.</p> <p>Now this is a pretty low amount of money - 4 figures, if that even - so it's just a kind of side-hustle between friends bit of fun type thing. I'm not looking to extract maximum value from him, nor he I. We're pretty happy to split any surplus value this creates down the middle. We discussed taking the approach take a fund manager would take, but neither of us are really sure what that is, or the percentages involved. Also, do I take money from every trade, or just when he cashes out? Do I charge him nothing if his investment doesn't go up?</p> <p>So what's fair here?</p> <p>edit: just be clear, my question is exactly what I asked above. I'm not secretly looking for everyone's advice on how to manage a friendship.</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/of_a_varsity_athlete"> /u/of_a_varsity_athlete </a> <br/> <span><a href="https://www.reddit.com/r/investing/comments/wzqtlu/how_should_i_charge_a_friend_to_invest_their_money/">[link]</a></span> <span><a href="https://www.reddit.com/r/investing/comments/wzqtlu/how_should_i_charge_a_friend_to_invest_their_money/">[comments]</a></span>
<!-- SC_OFF --><div class="md"><p>I've discovered a market that I can profitably trade on. There are so few profitable opportunities to make trades that usually I won't even spend all of my own capital before I've bought them all, but sometimes this is not the case, and I don't have enough capital to buy all the oppertunities alone.</p> <p>A friend wants me to trade their money for them on this market. He and I are unsure what constitutes a fair price for me to do this. We see two ways of doing it: 1. I only touch his money when I've spent all of mine, and take a tiny percentage of his profit. 2. I trade our money as one fund on every trade, paying him out his share of fund, minus a large percentage of his profit.</p> <p>Now this is a pretty low amount of money - 4 figures, if that even - so it's just a kind of side-hustle between friends bit of fun type thing. I'm not looking to extract maximum value from him, nor he I. We're pretty happy to split any surplus value this creates down the middle. We discussed taking the approach take a fund manager would take, but neither of us are really sure what that is, or the percentages involved. Also, do I take money from every trade, or just when he cashes out? Do I charge him nothing if his investment doesn't go up?</p> <p>So what's fair here?</p> <p>edit: just be clear, my question is exactly what I asked above. I'm not secretly looking for everyone's advice on how to manage a friendship.</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/of_a_varsity_athlete"> /u/of_a_varsity_athlete </a> <br/> <span><a href="https://www.reddit.com/r/investing/comments/wzqtlu/how_should_i_charge_a_friend_to_invest_their_money/">[link]</a></span> <span><a href="https://www.reddit.com/r/investing/comments/wzqtlu/how_should_i_charge_a_friend_to_invest_their_money/">[comments]</a></span>