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Is there anything wrong in doing yearly withdrawal in my clients accounts?

Pipsology (Pipsology)
Aug 19 2010 at 13:17
11 posts
hello people, i just want to know, we both signed a contract of only withdrawing yearly, is there any bad in it?

Patience Is The Best Stractegy In Forex
Elkart
Elkart
Aug 19 2010 at 14:59
941 posts
If you're the MM?

Super bad.

You should be getting every cent you can get your hand on to get it into your trading account so it can start compounding. By doing that you just waved good-bye to a years compounding.

A 100 buck fee a year later at 0.005% a day is about $250 x maybe 100 clients. Times 10 or 20 successful years. This is before taking the clients compound into account.

You're throwing away millions basically if you're successful.

I wouldn't burn those kind of bucks, that's for sure.

Of course the client scores mega, they're getting your compounding!!


'The most powerful force in the universe, compound interest - Albert Einstein' or so I'm lead to believe...

Pipsology (Pipsology)
Aug 19 2010 at 18:06
11 posts
plz could u explain more, bcos this account in my fxbook is the first huge account i hv just signed contract with

Patience Is The Best Stractegy In Forex
Elkart
Elkart
Aug 19 2010 at 18:09
941 posts
Are you client or manager? I presume manager. So give me rough figures to work with. I suppose you wouldn't want to do that. So I'll just do a simple sheet, you can plug your own stuff in.

Elkart
Elkart
Aug 19 2010 at 18:33
941 posts
Right simple compounding.

There we assumed you got $1k after month one as a fee and you're doing 0.5% a day. So after a year, about 200 trading days the original 1k fee's now $2711.52.

That is in the clients account. Not yours. Your fee for month 1 was and still is 1k. But the client is now sitting on your compounding, the other $1700 which is more than your original fee.

He has your fee plus growth. Of course you get a fee for growing your fee, $1 711.52 x portion of fee.
So you lose and lose.

Now that was for month one. Times that by client times by time....1000 clients 10 years later. You take the cents you can get on the day and add it to your trading account so it can compound for you. The way you're doing it you get a fee of the compounding of your fee...which you don't have, because the clients got it...





SIM
pip2cash
Aug 19 2010 at 18:38
423 posts

Pipsology posted:
    hello people, i just want to know, we both signed a contract of only withdrawing yearly, is there any bad in it?


Hi,

As manager, i dont think you have any disadvantages. You manage as long as you can for your clients.

As client, then depend on the terms stated in the contract. Normally i will not signed it if it only allow me to withdraw after a year. It is simply too long for me. I need higher liquidity for my money. And what happen if the manager does not meet your expectation of performance? But you still need to wait until year end, this is too bad.

regards,
SIM

Elkart
Elkart
Aug 19 2010 at 18:43
941 posts
Sim

Are you kidding me? It's the worst deal a manager could do!! Perfect for the client.

Elkart
Elkart
Aug 19 2010 at 18:49
941 posts
High water mark, no profit no fee, Monthly or Bi weekly. Broker collects. That's a fair deal.

If the client declares a dispute and closes his account, contract or not, what chance does the MM have of collecting? Paypal won't even handle an money sent last week dispute, never mind a year old fee.

And if you use banks, and the fee is only a grand for the last 12 months for that client?

No ladies, it makes every sense to settle often, via a third party, from a financial point of view and from a fair point if view.

SIM
pip2cash
Aug 19 2010 at 18:51
423 posts
Elkart,

Don't worry, it is just my opinion.
It depends on what he have signed.

Regards,
SIM

Pipsology (Pipsology)
Aug 19 2010 at 18:53
11 posts
it an account of 400k as u can see on my fxbook, but we signed 60 40 profit sharing

Patience Is The Best Stractegy In Forex
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