Question: Member Percentage Limit
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Connie - Check the Bivio site and look under "Preferences" or "Help." Ray On Saturday, May 28, 2016 7:25 PM, Connie Humble <chumble@sdplains.com> wrote: Do you know how to remove your name from the group/ From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Elaine Humme via bivio.com Sent: Saturday, May 28, 2016 4:50 PM To: club_cafe@bivio.com Subject: Re: [club_cafe] Re: Question: Member Percentage Limit I should not be sending this message to me. Not sure why I am receiving them. Elaine
On the high side - that is a legit issue, both for long term partners and new partners Longer term members can invest only at the minimum (typically $25/30) to avoid growing. Shorter term members can up their percentages by contributing larger monthly or one time lump sum, or longer term members can take a partial withdrawal. One of my club has 6 members totaling over 80%, with the other 8 members having 20% in total. It is a dicey thing. Those long term members feel entitled to continue contributing whatever they have been, and are disinclined to take partial withdrawals or decrease contributions, where some of the the other 8 members have felt less vested in the club and its processes at times. I believe it also a disincentive for joining. The club does not require folks to "buy in" at a particular percentage, but the ownership range has created discussion. Be Well. Irina Sent from my iPad
Connie - See the "Help" page - it refers a member to write direct if it is a complicated answer like the NJ tax question or any other unanswered question. Ray On Sunday, May 29, 2016 11:03 AM, Connie Humble <chumble@sdplains.com> wrote: Why would It be a Bivio question? From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of fipsrus@att.net Sent: Sunday, May 29, 2016 7:31 AM To: club_cafe@bivio.com Subject: Re: [club_cafe] Re: Question: Member Percentage Limit Connie - That might be a question for Bivio! Ray On Saturday, May 28, 2016 7:23 PM, Connie Humble <chumble@sdplains.com> wrote: But tale a look at the flip side--I am a charter member--the only one left--and what am I supposed to do? I have made the same contributions as have the rest but I have 16 years of contributions with the next closest with 7. I realize that I have a large majority--but how were we to prevent it? From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Dick Lewis Sent: Saturday, May 28, 2016 12:45 PM To: club_cafe@bivio.com Subject: Re: [club_cafe] Re: Question: Member Percentage Limit Thank you both for your input. What you say makes sense. Now I understand the reason for this limitation. Dick From: fipsrus@att.net Sent: Saturday, May 28, 2016 2:25 PM Subject: Re: [club_cafe] Re: Question: Member Percentage Limit Irena - I agree. Ray On Saturday, May 28, 2016 1:22 PM, Irina Clements <irina39@verizon.net> wrote: A large point is the impact to the portfolio if the person departs. We just had a person leave with 14%. Causes disruption. Is also a significant opportunity to winnow losers from the portfolio. To me its a similar issue whether stock percentage of the portfolio, or individual percentage, risk and disruption. Be Well. Irina Sent from my iPad > On May 28, 2016, at 2:06 PM, Dick Lewis <rlewis21@nc.rr.com> wrote: > > We're in the process of reviewing our Partnership Agreement > and are questioning the reason for limiting a partner to 20% > or 25% ownership. If our agreement states that each member > gets 1 vote on issues the club is considering, regardless of > their ownership percentage, what difference does it make if > a member has a greater percentage ownership. We're > considering removing that requirement but thought we'd > question the reason for this limitation before we amend our > Partnership Agreement. What point are we missing? Connie, My club experienced the same issue. In our case people withdrew for personal reasons and a few passed away. I was one of the original members and ended up holding 56%. Since we were a one-person one-vote club that was not an issue because I was able to control my ego and go with the majority. When we finally succumbed to a disruptive element and decided to disband, I received a large portion of the cost of my late mid-life crisis sports car and can enjoy the benefits of long-term investing for more years. Mike Jones Wall$treet Wannabees From: "fipsrus@att.net" <fipsrus@att.net> To: "club_cafe@bivio.com" <club_cafe@bivio.com> Sent: Sunday, May 29, 2016 8:30 AM Subject: Re: [club_cafe] Re: Question: Member Percentage Limit Connie - That might be a question for Bivio! Ray On Saturday, May 28, 2016 7:23 PM, Connie Humble <chumble@sdplains.com> wrote: But tale a look at the flip side--I am a charter member--the only one left--and what am I supposed to do? I have made the same contributions as have the rest but I have 16 years of contributions with the next closest with 7. I realize that I have a large majority--but how were we to prevent it? From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Dick Lewis Sent: Saturday, May 28, 2016 12:45 PM To: club_cafe@bivio.com Subject: Re: [club_cafe] Re: Question: Member Percentage Limit Thank you both for your input. What you say makes sense. Now I understand the reason for this limitation. Dick From: fipsrus@att.net Sent: Saturday, May 28, 2016 2:25 PM Subject: Re: [club_cafe] Re: Question: Member Percentage Limit Irena - I agree. Ray On Saturday, May 28, 2016 1:22 PM, Irina Clements <irina39@verizon.net> wrote: A large point is the impact to the portfolio if the person departs. We just had a person leave with 14%. Causes disruption. Is also a significant opportunity to winnow losers from the portfolio. To me its a similar issue whether stock percentage of the portfolio, or individual percentage, risk and disruption. Be Well. Irina Sent from my iPad > On May 28, 2016, at 2:06 PM, Dick Lewis <rlewis21@nc.rr.com> wrote: > > We're in the process of reviewing our Partnership Agreement > and are questioning the reason for limiting a partner to 20% > or 25% ownership. If our agreement states that each member > gets 1 vote on issues the club is considering, regardless of > their ownership percentage, what difference does it make if > a member has a greater percentage ownership. We're > considering removing that requirement but thought we'd > question the reason for this limitation before we amend our > Partnership Agreement. What point are we missing? Thanks--I feel like I don't control the club. I was just trying to point out the other side of an issue. From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Mike Jones via bivio.com Connie, My club experienced the same issue. In our case people withdrew for personal reasons and a few passed away. I was one of the original members and ended up holding 56%. Since we were a one-person one-vote club that was not an issue because I was able to control my ego and go with the majority. When we finally succumbed to a disruptive element and decided to disband, I received a large portion of the cost of my late mid-life crisis sports car and can enjoy the benefits of long-term investing for more years.
Mike Jones Wall$treet Wannabees From: "fipsrus@att.net" <fipsrus@att.net> Connie - That might be a question for Bivio! Ray On Saturday, May 28, 2016 7:23 PM, Connie Humble <chumble@sdplains.com> wrote: But tale a look at the flip side--I am a charter member--the only one left--and what am I supposed to do? I have made the same contributions as have the rest but I have 16 years of contributions with the next closest with 7. I realize that I have a large majority--but how were we to prevent it?
From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Dick Lewis
Thank you both for your input. What you say makes sense. Now I understand the reason for this limitation.
Dick
From: fipsrus@att.net Sent: Saturday, May 28, 2016 2:25 PM Subject: Re: [club_cafe] Re: Question: Member Percentage Limit
Irena - I agree. Ray
On Saturday, May 28, 2016 1:22 PM, Irina Clements <irina39@verizon.net> wrote:
A large point is the impact to the portfolio if the person departs. We just had a person leave with 14%. Causes disruption. Is also a significant opportunity to winnow losers from the portfolio. To me its a similar issue whether stock percentage of the portfolio, or individual percentage, risk and disruption.
We have a cap on ownership of 20%, of which we have one member who is always hovering there. When she gets over 20%, she stops making monetary contributions until such time as her share drops below 20%, and then she is allowed to only contribute the minimum amount of $25. Her money still grows and she is still a voting member. That policy has served us well over the years. Sharon L. On Thu, Jun 2, 2016 at 9:01 AM, Connie Humble <chumble@sdplains.com> wrote:
The policy has worked but how has it served you well? You had one member who was forced to stop contributing even the minimum amount until the rest caught up. If someone withdraws she will have to wait a long time until her share drops below 20%. In my opinion, this seems arbitrary and serves no useful purpose other than being a rule that is observed. Mike From: Sharon Laddusaw <sharon.laddusaw@gmail.com> To: club_cafe@bivio.com Sent: Thursday, June 2, 2016 11:35 AM Subject: Re: [club_cafe] Re: Question: Member Percentage Limit We have a cap on ownership of 20%, of which we have one member who is always hovering there. When she gets over 20%, she stops making monetary contributions until such time as her share drops below 20%, and then she is allowed to only contribute the minimum amount of $25. Her money still grows and she is still a voting member. That policy has served us well over the years. Sharon L. On Thu, Jun 2, 2016 at 9:01 AM, Connie Humble <chumble@sdplains.com> wrote:
I am a bit puzzled by the percentage ownership dialog. The only problem I
see with some members owning large amounts in the club is in investment decision
making regarding selling. Members with a large amount of money in the club may
be reluctant to sell a stock with a huge capital gain and incur a hefty capital
gains tax on their personal tax return without any corresponding cash return to
their wallet. To some extent this can be mitigated by end of year tax planning (
selling losers to offset capital gains ), but sometimes this doesn't necessarily
work out.
We have found it helpful to buy people out on exit from the club by
transfer of high capital gains stocks to the departing member.
The above of course is contingent on the one member, one vote, model.
Dave Rowekamp
Roundtable Investment Club
Winona, MN
From: Mike Jones via bivio.com
Sent: Thursday, June 2, 2016 1:09 PM
Subject: Re: [club_cafe] Re: Question: Member Percentage
Limit The policy has worked but how has it
served you well? You had one member who was forced to stop contributing
even the minimum amount until the rest caught up. If someone withdraws she
will have to wait a long time until her share drops below 20%. In my opinion,
this seems arbitrary and serves no useful purpose other than being a rule that
is observed.
Mike
From: Sharon Laddusaw <sharon.laddusaw@gmail.com> To: club_cafe@bivio.com Sent: Thursday, June 2, 2016 11:35 AM Subject: Re: [club_cafe] Re: Question: Member Percentage Limit We have a cap on ownership
of 20%, of which we have one member who is always hovering there. When she
gets over 20%, she stops making monetary contributions until such time as her
share drops below 20%, and then she is allowed to only contribute the minimum
amount of $25. Her money still grows and she is still a voting
member. That policy has served us well over the years.
Sharon L. On
Thu, Jun 2, 2016 at 9:01 AM, Connie Humble <chumble@sdplains.com>
wrote:
I agree completely with Dave's assessment. This policy is probably a relic from a sample Partnership Agreement that may have had some relevance in the past but fails to consider a partnership that adds or deletes members at unplanned intervals. The key seems to be the one-person one-vote model. Mike Jones Wall$treet Wannabees From: Dave & Betsy Rowekamp <rowefam@hbci.com> To: club_cafe@bivio.com Sent: Thursday, June 2, 2016 2:34 PM Subject: Re: [club_cafe] Re: Question: Member Percentage Limit I am a bit puzzled by the percentage ownership dialog. The only problem I
see with some members owning large amounts in the club is in investment decision
making regarding selling. Members with a large amount of money in the club may
be reluctant to sell a stock with a huge capital gain and incur a hefty capital
gains tax on their personal tax return without any corresponding cash return to
their wallet. To some extent this can be mitigated by end of year tax planning (
selling losers to offset capital gains ), but sometimes this doesn't necessarily
work out.
We have found it helpful to buy people out on exit from the club by
transfer of high capital gains stocks to the departing member.
The above of course is contingent on the one member, one vote, model.
Dave Rowekamp
Roundtable Investment Club
Winona, MN
From: Mike Jones via bivio.com
Sent: Thursday, June 2, 2016 1:09 PM
Subject: Re: [club_cafe] Re: Question: Member Percentage
Limit The policy has worked but how has it
served you well? You had one member who was forced to stop contributing
even the minimum amount until the rest caught up. If someone withdraws she
will have to wait a long time until her share drops below 20%. In my opinion,
this seems arbitrary and serves no useful purpose other than being a rule that
is observed.
Mike
From: Sharon Laddusaw <sharon.laddusaw@gmail.com> To: club_cafe@bivio.com Sent: Thursday, June 2, 2016 11:35 AM Subject: Re: [club_cafe] Re: Question: Member Percentage Limit We have a cap on ownership
of 20%, of which we have one member who is always hovering there. When she
gets over 20%, she stops making monetary contributions until such time as her
share drops below 20%, and then she is allowed to only contribute the minimum
amount of $25. Her money still grows and she is still a voting
member. That policy has served us well over the years.
Sharon L. On
Thu, Jun 2, 2016 at 9:01 AM, Connie Humble <chumble@sdplains.com>
wrote:
Since this near dead horse is somehow still breathing, please allow me to add my 2 cents. Both of the clubs that I am a member of have 20% limits (I think). Where I see an admittedly MINOR benefit in maintaining these percentage limits is that new members, who are not familiar with how investment clubs work, might feel like they are being taken advantage or might simply be intimidated by certain members own too much of the portfolio, regardless of the one member/one vote practice. I suppose this is an educational opportunity for the newer members though. On Fri, Jun 3, 2016 at 10:24 AM, Mike Jones via bivio.com <user*21595500001@bivio.com> wrote:
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