Putting money in mutual fund acct with relatives

How would combining the money into one account increase the yield? I see no advantage to this.

Really. Bad. Idea.

Ok. I'll bite.

What in the world is the selling point that you were given for this great idea? Anything more than "we can get a higher yield" or some details behind that?

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higher yield

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I do not think this word means what you think it means.

That's the only reason I could think of, still not a good reason though.

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Ok thats why I consulted first...no go

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Props to you for asking around first. People end up making bad decisions with money because they don't bounce the idea off of a few people. I've found that this board is as good a place as any to get a quick variety of opinions.

So many people think that "combining accounts equals higher % return"...


If you invest seperately:
Acct1: 20,000 @10% ... end with $22,000
Acct2: 30,000 @10% ... end with $33,000
Total = $55,000

If you invest as one:
Acct1: 50,000 @10% ... end with $55,000
Total = $55,000


$55,000 = $55,000

All things being equal, and assuming you are not trying to use the money to allow for more diversification (which would negate the "all things being equal" anyway), it does not matter if you invest seperately or together. Therefore, unless there are other reasons, there is no reason to combine funds.

I think someone else may have nailed it as well. There are break points for loaded funds. It depends in the fund company, but $50,000 is a common break point. My advice would be to invest in a no load fund and keep the accounts separate. Vanguard has some of the lowest fees in the business. I'd start with them first.

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Close relative will be no disputes, but does this accomplish anything better than having two seperate accts?

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Nonononononononononononononononononono.