Putting money in mutual fund acct with relatives | TigerDroppings.com

Posted byMessage
LaFBfan
Washington Fan
Baton Rouge
Member since Jan 2013
651 posts

Putting money in mutual fund acct with relatives



Would you consider combining funds to a mutual fund acct with a relative in order to achieve a higher yield? For example I've got 30k and they have 20k to invest. Close relative will be no disputes, but does this accomplish anything better than having two seperate accts?






Back to top
Share:
AutoYes_Clown
Alabama Fan
Baton Rouge, LA
Member since Oct 2012
1905 posts

re: Putting money in mutual fund acct with relatives


quote:

 Close relative will be no disputes








Back to top
  Replies (0)
Beerinthepocket
LSU Fan
Dallas
Member since May 2011
580 posts

re: 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.





Back to top
Layabout
UNO Fan
Baton Rouge
Member since Jul 2011
6811 posts

re: Putting money in mutual fund acct with relatives


quote:

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


This. Not to mention the nightmare of dividing up the 1099 at tax time.






Back to top
  Replies (0)
TyOconner
Troy Fan
NOLA
Member since Nov 2009
10104 posts

re: Putting money in mutual fund acct with relatives


Really. Bad. Idea.





Back to top
  Replies (0)
reb13
Ole Miss Fan
Oxford, MS
Member since May 2010
9931 posts

re: Putting money in mutual fund acct with relatives


HORRIBLE IDEA! STEER CLEAR!





Back to top
  Replies (0)
Bayou Tiger
LSU Fan
The Woodlands, TX
Member since Nov 2003
3251 posts

re: Putting money in mutual fund acct with relatives


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?



This post was edited on 2/23 at 11:07 pm


Back to top
RedMustang
Auburn Fan
Member since Oct 2011
4116 posts

re: Putting money in mutual fund acct with relatives


Horrible idea. There isn't a single fund that I can think of where you'd get a better "yield" with $50K than $30K. BTY, I used to be in the investment business. DEFINITELY keep your accounts separate.





Back to top
  Replies (0)
SLafourche07
New Orleans Pelicans Fan
Member since Feb 2008
1337 posts

re: Putting money in mutual fund acct with relatives


quote:

higher yield


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






Back to top
LaFBfan
Washington Fan
Baton Rouge
Member since Jan 2013
651 posts

re: Putting money in mutual fund acct with relatives


Ok thats why I consulted first...no go





Back to top
Janky
LSU Fan
Team Primo
Member since Jun 2011
8026 posts
 Online 

re: Putting money in mutual fund acct with relatives


He may be thinking of reaching a breakpoint on the load. Which brings up the question, why a loaded fund?





Back to top
Vols&Shaft83
Tennessee Fan
Member since Dec 2012
14746 posts
 Online 

re: Putting money in mutual fund acct with relatives


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





Back to top
  Replies (0)
Lsut81
USA Fan
Member since Jun 2005
64850 posts

re: Putting money in mutual fund acct with relatives


quote:

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


So you think...


The mantra never go into business with family or friends def applies here.

Unless you get a lawyer involved and make a "Trust" and allocate 60% to you and 40% to them, I wouldn't do it.






Back to top
  Replies (0)
Bayou Tiger
LSU Fan
The Woodlands, TX
Member since Nov 2003
3251 posts

re: Putting money in mutual fund acct with relatives


quote:

Ok thats why I consulted first...no go
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.







Back to top
  Replies (0)
Powerman
LSU Fan
Corpus Christi, TX
Member since Jan 2004
120641 posts

re: Putting money in mutual fund acct with relatives


quote:

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?


I think some mutual fund stores require a 50K minimum to invest

He thinks he can get a good yield there but doesn't have enough liquid cash to invest yet






Back to top
  Replies (0)
JPLSU1981
LSU Fan
Baton Rouge
Member since Oct 2005
17317 posts

re: Putting money in mutual fund acct with relatives


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.





This post was edited on 2/24 at 9:18 am


Back to top
Powerman
LSU Fan
Corpus Christi, TX
Member since Jan 2004
120641 posts

re: Putting money in mutual fund acct with relatives


See my post above

I think it explains it






Back to top
RedMustang
Auburn Fan
Member since Oct 2011
4116 posts

re: Putting money in mutual fund acct with relatives


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.





Back to top
JPLSU1981
LSU Fan
Baton Rouge
Member since Oct 2005
17317 posts

re: Putting money in mutual fund acct with relatives


Even in the case of a breakpoint, I personally don't think the one-time 1-2% savings (if that) is worth the hassle that will come with a joint account.

Like you said, if breakpoint is the issue, then go with a no-load fund to begin with.

I'm guessing that breakpoint is not the issue, though...His OP reads that he thinks they can get a higher return by combining funds, a common misconception.




This post was edited on 2/24 at 10:49 am


Back to top
Ace Midnight
LSU Fan
Ball, LA - Home, Sweet Home
Member since Dec 2006
30344 posts

re: Putting money in mutual fund acct with relatives


quote:

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


Nonononononononononononononononononono.






Back to top
  Replies (0)


Back to top