There are times when you might have a member of your investment club pay a club expense with their own personal funds. If you'd like to reimburse them without having to give them a check, you can reimburse them with units of ownership in the club.
Da Demo was just in this situation. Justin Martinez payed for the renewal of their DBA registration with their county. Here are the steps Chris Anderson, their treasurer, followed to record Justin's reimbursement in their investment club accounting.
Just to clarify. Did the units come from the other members in proportion to their ownership?
Thanks.
Ira Haas
From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Laurie Frederiksen Sent: Monday, October 20, 2014 3:50 PM To: The Club Cafe Subject: [club_cafe] Da Demo Reimburses a Club Member With Units
There are times when you might have a member of your investment club pay a club expense with their own personal funds. If you'd like to reimburse them without having to give them a check, you can reimburse them with units of ownership in the club.
Da Demo was just in this situation. Justin Martinez payed for the renewal of their DBA registration with their county. Here are the steps Chris Anderson, their treasurer, followed to record Justin's reimbursement in their investment club accounting.
Not really. The units themselves aren't taken from other members units unless you allocate the expense "Per Partnership Exception" (equally) on the expense entry form.
The
expense is what is contributed to by everyone. By default it is allocated by percentage of ownership. No member units are taken from anyone in that case.
It is a little confusing, but it might help to think about it this way. The dollar amount for the expense doesn't go directly from the club to pay
the expense. It goes to the person who paid it for the club (in the form of units) to
reimburse him for paying it out of his own funds.
Hope that helps.
Laurie Frederiksen Invest with your friends! www.bivio.com
On Tue, Oct 21, 2014 at 12:11 PM, Ira Haas <> wrote:
Laurie,
Just to clarify. Did the units come from the other members in proportion to their ownership?
Thanks.
Ira Haas
From:club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Laurie Frederiksen Sent: Monday, October 20, 2014 3:50 PM To: The Club Cafe Subject: [club_cafe] Da Demo Reimburses a Club Member With Units
There are times when you might have a member of your investment club pay a club expense with their own personal funds. If you'd like to reimburse them without having to give them a check, you can reimburse them with units of ownership in the club.
Da Demo was just in this situation. Justin Martinez payed for the renewal of their DBA registration with their county. Here are the steps Chris Anderson, their treasurer, followed to record Justin's reimbursement in their investment club accounting.
I thought this might add to Laurie's explanation. Examples always help me think it through.
Starting with the expense, rather than changing the number of units, it lowers the net asset value of the units by taking the Expense dollars divided by the total number of units.
As an example $150 expense divided by lets say 15,000 total units in the club (makes the math easy) reduces the NAV by $.01. So if before the expense the NAV is $20.01 after the expense the NAV is $20.00.
The person who is being reimbursed for the expense elects to not accept a check from the club for $150 but leaves the money in the club and buys $150 / $20 (new NAV) which is 7.5 units.
Hope this helps,
Paul
On Tue, Oct 21, 2014 at 12:25 PM, Laurie Frederiksen <laurie@bivio.biz> wrote:
Hi Ira,
Not really. The units themselves aren't taken from other members units unless you allocate the expense "Per Partnership Exception" (equally) on the expense entry form.
The
expense is what is contributed to by everyone. By default it is allocated by percentage of ownership. No member units are taken from anyone in that case.
It is a little confusing, but it might help to think about it this way. The dollar amount for the expense doesn't go directly from the club to pay
the expense. It goes to the person who paid it for the club (in the form of units) to
reimburse him for paying it out of his own funds.
Hope that helps.
Laurie Frederiksen Invest with your friends! www.bivio.com
On Tue, Oct 21, 2014 at 12:11 PM, Ira Haas <> wrote:
Laurie,
Just to clarify. Did the units come from the other members in proportion to their ownership?
Thanks.
Ira Haas
From:club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Laurie Frederiksen Sent: Monday, October 20, 2014 3:50 PM To: The Club Cafe Subject: [club_cafe] Da Demo Reimburses a Club Member With Units
There are times when you might have a member of your investment club pay a club expense with their own personal funds. If you'd like to reimburse them without having to give them a check, you can reimburse them with units of ownership in the club.
Da Demo was just in this situation. Justin Martinez payed for the renewal of their DBA registration with their county. Here are the steps Chris Anderson, their treasurer, followed to record Justin's reimbursement in their investment club accounting.