Your personal investor

[inbox]

I would like to hear opinion of those who have lots of cash, over $300,000 and who have money left on the bank account generating 3,4% per year or even less.

I am an entrepreneur myself. In past years I have successfuly build and ran my own internet websites which I made lots of money with. Three years ago I realized that the next logical step for me is to learn how to use money to create more money. I didn't feel ok with the fact that my money is sitting on bank account doing nothing. I started to read books, learned financial markets, I read every single financial thing, talked to lots of people and that way I build my knowledge about the money. I can say I have specialized to invest and get good returns. I am also familiar with how to invest, which mechanisms to use (establish company) and how to legally avoid taxes. I can do *full package*. I do not play with risky things nor do I dream about 300% interest - I am not a gambler. What I try to (and I do!) achieve is to double my money in three years. That means I target 20-30% per year. Last year I done 27%. For those who understand what I am saying this means you double in 3 years.

If we assume the middle - 25%
and if you invest $500,000 today:

- after one year you will have $625,000
- after two years: $781,000
- after three years: ~ $1,000,000

What I thought I should do: attract wealthy people - those who have lots of money on their accounts, getting basically no interest (or 3% per year). I would help them to create relationship with the bank (one of the top banks in the world) and sign a contract with them. My job would be taking care of their investments but at the end of the year I take my commission based on % of profit. If I do a bad job, I get nothing. If I do it well as I am doing it for myself, I take small part of the profit. What I offer is "money always with you", this means, you are the account owner and I have no control over your account. The only thing I can do is to instruct the bank which investments (mutual funds) to buy - I can only do that when you "allow" the bank that I do it for you. No tricks or anything. The bank knows me and will verify every new client + also I will have to guarantee for each new client as well since these are serious things.

For your protection I cannot sell anything - unless you instruct - neither I can't do anything else. You are fully protected and you are making money work for you.

Do not attack me that I am trying to do some kind of scam because I am not. I am only trying to do next logical step in my business. I am not seeking new clients right now on this forum - I am only asking for your opinion. If you are wealthy - tell me what you think.


Remember:

- I am not promising you 200% or 100% per year. If you want that, you can go to casino - you're not the type of client I target.
- Top World bank
- Account is yours (you have to come and open it)
- You get personal banker, online access, full package
- I will invest into mutual funds I know will bring good return
- I target 20-30% per year (in 2006 I made 27%)
- If you want I will help you to establish no tax platform
- You can withdraw your money at anytime
- I sign a contract with you, my commission will be based on % of profit

Important:

I am not interested in any dirty money. The money you own must be clean and you must have a proof that you earned it with legal business.

-------------

Your opinion please. Thanks a lot!

[freedom.project]

Great Concept. Just a few questions?

What do you consider a risky investment?

Why have you chosen mutual funds for you investments, even though they are not required, legally, to disclose all expenses?

What do you think will happen with mutual funds within the next 3-10 years?

I'm not trying to give you crap or anything. I am just trying to get a basis for why you choose to do what you do.

Later 4 now

Steven Ruddell

[wully00]

No offense or anything but if I had over 300k in cash I wouldn't be checking young message boards for investment advice.

[inbox]

Thanks to all of you. To answer your questions:

CEO Space World: The amount is not important. It is a percentage, works for any amount. I cannot disclose my amount at least not on message board. I will disclose that to potential clients. Hint: it's more than what I mentioned above.

CEO Space World: That's something I thought too but I think this is not the case. I had a meeting with the bank yesterday and they told me that most wealthy people are leaving money on account because they don't only know how to earn money but they don't know what to do afterwards (his words). My personal banker said I am the only so well educated investor among his 250 private clients and that most of others don't do anything. That is another green-light for me, I guess.

freedom.project: All investment are risky, some are more some are less. Generally: more return / more risk. Mutual funds is something I can control well. But as you know no one can guarantee you that you won't loose. You can loose in short term run but if you are willing to invest for 3-5 years, you will see great gains.

3-10 years: Mutual funds I pick will do as I mentioned above. I plan to double every 3 years. It things go wrong, it can last 4 years (I am safe player by nature). Basically in 10 years it will be much much more.

Why have you chosen mutual funds for you investments...:
It happened spontaniously, it was something I love doing it. It started with first fund, talks, Morningstar book, etc. It was just a process like any other in your life. Actually at that time I started to "play" with stocks and Mutual Funds around which invest on international markets. MF worked great for me so I educated myself more and more. Today I like this thing and I am doing it with pleasure.

One more thing I will take care of: I invest when the time is good, when markets go down and when everyone is selling. That's a great thing to do. In Aug when it happened I took a loan and invest more. Today that investment is 10% up already and its only one month. I am confident to make 20-30% per year and that's great if you ask me.

wully00: I didn't think you are checking here for advice, I was just asking what you think about the idea. By the way, I have much more and I still read forums like I used to do, you never know when to find something good.

I really appreciate your point of view and your questions! It helps me to get ready to approach potentional clients.

[akula]

Great Concept.

the things this chump is talking about are illegal

it is in no way a "great concept"

[akula]

It helps me to get ready to approach potentional clients.

what clients? what planet are you on?

do you have a securities license and are allowed to offer financial advice? do you have the professional indemnity insurance? have you been registered as an authorized representative for a securities license holder? if not, go pitch somebody and see what happens.

you are out of your league. it is a legal requirement that to be able to work with retail clients, brokers and financial planners must meet FINRA administered levels of education and practical experience. in your case, the words you are using (e.g. "I am confident to make 20-30% per year and that's great if you ask me") demonstrate that you have not passed any FINRA administered exams - and hence it is illegal for you to give people financial advice (let alone trade in securities).

do your FINRA series (e.g. series 6) and then you can have the legal right to discuss financial planning strategies with others. make a career out of it. become a CFP. If you contact retail clients without having passed FINRA exams, in the best case, you will be fined and closed down by SEC, or in worst case, you will be sued in civil court by your clients and also face criminal charges

[inbox]

dear Akula, you are far away from being on my client's list - at least with this kind of offensive talk. You misunderstood my question. I am not trying to convince anyone about anything. I just explained what I do, that's all. If all you can do is attack someone who is successful, walk on. I am not interested in that kind of talk. This is a free world, people can have a choice to pick guy A with 10 licences or guy B with no licence, whatever they want. I have no licence, I didn't work in financial institution and I don't wear fancy titles. I explained what I can do and whatever I do is legal, backed up with contract, meetings at bank and law firm. The last thing am not going to do is argue with you - unproductive. If you can talk politely, I will be more than happy to anwser your questions.

Anyway, I think CEO and freedom understood what I tried to ask and they seem to know about things. Getting feedback from such people can only be a +.

[akula]

son, are you not listening?

it is illegal for you to deal in financial services, unless you have satisfied FINRA requirements

these requirements exist for a reason

without a license the trouble you will get into by telling people that you're a financial adviser, is the same as the kind of trouble you will get into by telling people you are a doctor

that means heavy fines and jail time

people can't practice medicine without a license, and the same principle applies to finance

it's not an issue of valid contacts. the law prohibits unlicensed people (like your self) to enter into contracts for financial services with retail investors. any financial services contract that you enter into is automatically void because you do not have the legal authority to enter into these contracts.

the point: because any contracts you enter into with clients are void ab initio , you are automatically liable to your clients for any losses that they sustain. you will not be able to say "i'm not liable for client losses, my clients understood the risk of the investment as it was spelled out in the contract", because these contracts will be taken to be non existent - and you will need to restitute your client to the financial position they were in before they suffered losses due to your negligence or fraud (which is what your conduct will be declared as)

dear Akula, you are far away from being on my client's list - at least with this kind of offensive talk. You misunderstood my question. I am not trying to convince anyone about anything. I just explained what I do, that's all. If all you can do is attack someone who is successful, walk on. I am not interested in that kind of talk. This is a free world, people can have a choice to pick guy A with 10 licences or guy B with no licence, whatever they want. I have no licence, I didn't work in financial institution and I don't wear fancy titles. I explained what I can do and whatever I do is legal, backed up with contract, meetings at bank and law firm. The last thing am not going to do is argue with you - unproductive. If you can talk politely, I will be more than happy to anwser your questions.

Anyway, I think CEO and freedom understood what I tried to ask and they seem to know about things. Getting feedback from such people can only be a +.

[inbox]

Thank you but I am not asking you for advice on how to run my business. This thread is about something else.

[akula]

well, what are you asking about?

ok, lets have a look at the following;

1) I enter into a contract with you to the effect of "you will manage my money, and get a cut of profits".

2) I give you $100k and you sell me a closed end fund with a 5% exit fee and you charge 20% carry (or whatever)

3) I have a death in the family and I need to withdraw my $100k ASAP. I write you a letter saying "Give me back my money".

4) You will say, "No, I'm sorry I can't withdraw the money from the fund for the next 2 years, or an exit fee applies".

5) I say "No, give me my money back now in full!" and I take you to court alleging fraud (i.e. you obtained my money by holding out that you were authorized to receive it, which you were not) .

6) The court says, there is no contract between us (because you have no license), and orders that you therefore give me back my $100k. You now have a fraud judgment against you. Then you have to pay the 5% exit fee, the legal bills, and any capital losses out of your pocket; and you are not entitled to any 20% commission (i.e. carry) in case there is a capital gain. You are in the hole with no insurance, and this is even before the SEC refers your case to the DPP for criminal prosecution.

is the gravity of what I'm saying to you sinking in?

[inbox]

2) I give you $100k and you sell me a closed end fund with a 5% exit fee and you charge 20% carry (or whatever)

3) I have a death in the family and I need to withdraw my $100k ASAP. I write you a letter saying "Give me back my money".

If you would read my posts you would have found answers to your questions but you didn't read at all. Scroll up and you'll see. The money is all yours, you withdraw when you want,... you are fully protected but I am not. That's why you can do this kind of business only with people you trust because someone might withdraw and doesnt't pay my commission - it's my risk but I am willing to do it because I am doing a fair play long term business. I am sure that people I will handle will be satisfied and they will see no point in not-paying me. If someone helps you to generate 100% in 3 years, would you walk away? I wouldn't. Read again please.

[akula]

If you would read my posts you would have found answers to your questions but you didn't read at all. Scroll up and you'll see. The money is all yours, you withdraw when you want,... you are fully protected but I am not. That's why you can do this kind of business only with people you trust because someone might withdraw and doesnt't pay my commission - it's my risk but I am willing to do it because I am doing a fair play long term business. I am sure that people I will handle will be satisfied and they will see no point in not-paying me. If someone helps you to generate 100% in 3 years, would you walk away? I wouldn't. Read again please.

yes, the business structure you are referring to is called an open ended, unlisted trust structure (as different to an unlisted company). some other alternatives you have available are close ended listed/unlisted trusts, and limited partnership structures. all have advantages/disadvantages.

in terms of your hurdle rate (i.e. aiming to return 100% in 3 years, or 24%p.a), there maybe times when people will indeed walk away from it. At a beta of 1, the world's major indicies have been returning about 20% over the last 12 months. Now, if your investment fund has a beta of >1, and contains additional unsystematic risk - then a risk adjusted forecast for this investment will be lower than 24%. In other words, hurdle rates have to be adjusted for systematic and unsystematic risk, or they cease to be meaningful.

So yes, an investment opportunity with a forecasted return of 24% maybe a much worse opportunity than investing in an index fund, depending on the opportunity's beta coefficient. The follow up question for anyone who wants to set up investment fund and run money for other people is "How do I structure a mean variance portfolio using the three factor model?"

"Don't bet the ranch. Get more bang for your buck. Maximise output relative to input. Nothing ventured, nothing gained. Diversify instead of striving to make a killing. Don't put all your eggs in one basket; if it drops, you're in trouble. High volatility is like putting your head in the oven and your feet in the refrigerator."

Harry Markowitz (http://en.wikipedia.org/wiki/Harry_Markowitz)
Nobel laureate and father of moder portfolio management

[takeiteezzy]

inbox, how old are you?

[inbox]

35 years .