Thanks for your input .

However, that doesn't quite answer my question.

Each member value is around $31,00 and we have no trouble in keeping up our
membership.

Out members pay $450 semi annually, I look at this way as per the following:

                         MEMBER VALUES
 
                       1ST MONTH 2ND MONTH 3RD MONTH 4TH MONTH 5TH MONTH 6TH
MONTH
 
         PORTFOLIO 30,000 30,000 30,000 30,000 30,000 30,000
         MONTHLY DUES 75 150 225 300 375 450
         PREPAID DUES 375 300 225 150 75 0
 
======================================================
         TOTAL VALUE 30,450 30,450 30,450 30,450 30,450 30,450

Lets say that the member value of the portfolio remains the same, $30,000
for six months.
The first month $75 of the $450 is applied to the current month's dues. Each
succeeding month
$75 is added to the dues account and $75 is subtracted to the dues account.
Therefore at any time during the six month period, the member value is
$30,450. A new member buying in during that period should pay $30,450.

Other members tell me that new members should also pay the prepaid portion
of the dues. If you add this the new members account, he purchases extra
units and his member value is more than the current members. If what they
say is correct, It appears to me that the dues would have to entered as
Miscellaneous Income so the number of units is not affected.

What is you opinion of the above.

Thanks
Arthur Klages


-----Original Message-----
From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of
IraS1@aol.com
Sent: Wednesday, May 09, 2007 10:41 AM
To: club_cafe@bivio.com
Subject: Re: club_cafe: Prepaid Dues

In a message dated 5/9/2007 10:09:20 A.M. Eastern Daylight Time,
acklages@bivio.com writes:

        In our club members pay dues semi-annually. All members contribute
the same amount so their portfolio values should all be the same
        
        When a new member joins, he pays an amount equal to each members
value as of the valuation date, which is the last day of the month.
        
        If a member comes aboard, say, after two months past the date of
dues payment, does he have to pay the 4 months remaining of the prepayment,
or is that already included in the member value ?
        
        If so, how is that handled ?
        

That is all dependent on the language of your club's partnership agreement.
You can do anything you want (provided it's in your PA). As an aside, I
would advise you to reconsider your buy-in provision. After the club has
been in existence for a period of time it may become too expensive for a new
member to buy-in at the current value of the other members. There is no
reason to do so since the accounting software keeps track of each member's
share of earnings and expense regardless of the ownership share.
 
Ira Smilovitz



________________________________

See what's free at AOL.com <http://www.aol.com?ncid=AOLAOF00020000000503> .

> Therefore at any time during the six month period, the member value is
> $30,450.

snip

> If you add this to the new members account, he purchases extra units and
> his
> member value is more than the current members.

Hi Arthur,

And so goes unit-based accounting. As long as you continue to submit equal
amounts of money, and DON'T buy any stock, the value of your members'
accounts will remain constant. But as the market ebbs and flows, so will
the value if each members' account--on a daily basis! So your first
statement is incorrect, even though we understand your point.

Even if two members deposit the exact same amount of money, but it's
deposited two days apart, that's enough to create a disparity between them
forever.

I understand what you are trying to do. But it's not the best way, and in
fact, it's not the simplest way. The whole point of using bivio's software
is to handle the calculations properly (for your members AND the IRS) so you
don't have to go through all these gyrations with the finances. The program
operates the same as all the mutual fund programs, calculating NAV and
member values, etc.

Your method won't take into consideration time value and market conditions,
which means your members' values won't be properly calculated over time.
That's unfair to them. Utilizing unit-based, time-based accounting doesn't
mean you have to toss out your method of submitting pre-payments. But being
"equal" is absolutely pointless in the long run.

 There's a reason why 99.9% of thousands of clubs use this system. We've
tried it your way and it didn't work out in the end.

Make life easier on yourself, Arthur, and your club members. Let the
software do its job, and make it affordable for new members to come into the
club. You'll be glad you did, later on when you start losing founding
members.

Lynn Ostrem, VP
garbagecop@earthlink.net
Crow River Investment Club
www.bivio.com/crowriver