Here is a simple idea for those who have very consistant systems.
Offer 10% CDs, pool your client’s funds, (while keeping meticoulous records of how much they deposited and when) trade with it, pay the interest at the end of the year, and keep the exess profits.
I am currently demoing several promising systems, and if one of them turns out to make consistant profits for 5 straight years I will consider going into business for myself in this manner.
The amount of time spent on a system need not be too great and manageing the finances of the company might only take 1-2 hours/day.
Thus you work part time, are your own boss and might be able to earn several hundreds of thousands of dollars in annual income.
If you were in Australia, you would not only need to have a licence for trading with other people’s money (I think it’s called a Third Party Funds Management Certificate or something), but you’ll also have to register the business with the Australian Securities and Investments Commission, which will be closely scruitinised before being given a trading permit.
It’s a great idea… That’s what all banks and financial planning firms do. The tricky bit is building a reputation to be able to get all your licences and permits, and attract your first clients. Depending on your business model, you may also need quite a bit of startup capital to ensure you don’t run into cashflow problems. That said, clients wanting their money at the drop of a hat shoulnd’t be a problem, given the liquidity of this market. Profitability may be an issue if clients want their funds back at a time that doesn’t suit your system.
Just some ideas for you (I’ve constantly been considering this option myself!).
Risks aside, you’re essentially borrowing money at the rate of 10% a year and having to deal with clients.
You can most likely find ways to borrow money at a much cheaper interest rate then that and not have any clients. Also, you may be able to deduct the interest paid on your taxes. Not having clients and of all the hassles that come with them is a much better way to go. You may be able to qualify for a loan through the Small business administration, and there are always mortgage refinances/home equity loans.
I am currently a Junior in college and the easiest way for me to get money is through private student loans(deffered payments). I don’t go crazy with the amounts, but I would much rather use JP Morgan’s money temporarily than out of my own pocket. Once I’m up enough, I start to pay back the student loans and grind it out with made money. Just a thought to anyone in school, I guess.
you might need a tax plan too :), saw an article of how you can get LLC company and receive tax benefit. You can even establish a mini 401k plan and invest in it. The US give tax break to company that offer 401ks. I asume you are in the US, if not disregard my inputs.
I still got the article so let me know if you want it
Im not too big of investing money from loans. If you loose it, you really in trouble then.
I am actually putting together something very close to what you are talking about. I have a custom strategy (and it really works). This strategy has been working for at least 9 out of 10 trades. I only use it with the EUR/USD, but I consistently win. For my final test, I am seeing how long it takes me to double a 25K account. If I can keep going at the rate I am going now, I will be there in. 6 weeks for a total of 12.5 weeks. This method has been tested for about 2 years and tweaked along the way. I am going to use this method in my own fund. I am going to post signals here for this method starting now. adamgalas, if you want to get in on this fund with me as a partner, just let me know. I do have 1M under contract for when I get going. Check out the signals.
[QUOTE=zalgo;17055]I am actually putting together something very close to what you are talking about. I have a custom strategy (and it really works). This strategy has been working for at least 9 out of 10 trades. I only use it with the EUR/USD, but I consistently win. For my final test, I am seeing how long it takes me to double a 25K account. If I can keep going at the rate I am going now, I will be there in. 6 weeks for a total of 12.5 weeks. This method has been tested for about 2 years and tweaked along the way. I am going to use this method in my own fund. I am going to post signals here for this method starting now. adamgalas, if you want to get in on this fund with me as a partner, just let me know. I do have 1M under contract for when I get going. Check out the signals.[/
hello, i am also thinking about starting a fund management company, i would like to discuss with you in bit deep on this matter. looking forward;
I think all of you guys underestimate what it take sin order to run a fund. I would suggest you try your luck with managing a PAMM account first (which still does not give you any experience in all the aspects you need to know in order to run a company, but at least you will see how you handle investors).
It is not as simple as you think it is and given you ask this question in a forum shows that you are light years away from running a fund.
If that is the case I also believe that you would have to have some kind of listing in otherwise the trad-able aspect of CDs goes out of the window also for it to be a proper CD (in the UK) you’d have to be a bank and trade to ask for (generally) a minimum of £100’000’ initial investment.
for 10% pa i’d rather look for high yielding stock plus what happens after a few bad months and you’re running low on cash… the capital adequacy that you will have to have will probably be more than you can borrow from people.
If the offer was a 10% return per annum and I knew that the ‘manager’ was going to be investing in the forex market… believe me I would want a lot more than 10%…
Why does everyone on this thread need to borrow money if you already possess a full proof trading strategy? :34: If its a lack of start up capital, than why not just borrow money from the bank or your parents, and after you double it pay the them back…
I think you’re just unique, the last time I traded with a few beers in me I lost the week’s profits. Although I guess there is a difference between opening a bottle of red and going several rounds of pints at the pub…
There are so many ways of making money. You just have to find your way and keep following it until you reach your goals. When I started off as a forex trader, nothing seemed to be clear. But after gaining some experience in the market and making some losses, I got an idea about how it works and what I must do.
