member %

Susan Utman on

We have 6 orginal members and over a period of years have
taken in 5 more. Our buyin has been based on the current
market value of our portfolio divided by the number of
existing members. All member have paid dues at time of
collection. According to the member status page, we have
different market values, unit and percentage of ownership,
depending upon our buyin. Shouldn't we all have equal
ownership, ie-%m market value, and units? I can manipulate
the numbers to adjust status to show equal amounts, but as
soon as we make a new stock purchase or sale, the numbers
then change to unequal amounts again--we are frustrated by
this as we think we are equal partners-what's going on??

Gene Rooks on

Susan, you probably haven't had all members buy up to the same number of
units/market value that the original members had at the time the new member
joined. Even if they put in the total of what the others have paid in,
they wouldn't have gotten the same number of units, because they were
purchased at a different price. The unit value changes in bivio daily,
based on the club's market value and cash on hand for the day divided by the
total number of units each member holds.

Aren't you printing out a Members Status Report each month? That is the
source of each members market value as of the date chosen for the report.
Your PA should specify the official valuation date each month for your club.
You should not be manipulating the numbers at all. You should be changing
your PA to state that a members value is based on the worth of the units she
has purchased, which changes daily. You set the date for her final
valuation, usually a time given in the PA.

Equal ownership is not necessary, the software accurately handles credit for
each person's contribution at the time they make it, buying them units at
the the current unit value as of the official valuation date which you enter
in the software. Where you run into trouble is trying to bend the
accounting to fit an inappropriate goal. After a while, it is difficult to
attract new members who may not have the funds to buy up to what others
already own, nor is it at all necessary.

Gene Rooks, Space Coast Chapter

Susan Utman on

Thanks for your help! Where we are confused is the fact that when a new
member buys in--this is how we have been doing it;
We establish that day's market value for our portfolio by yahoo valuation
We divide that value by the current existing number of members
That number then become each member's market value and is an equal
percentage of the portfolio (or so we think)
The new member buys in at that amount-thus giving the new member a share (%
and units) equal to all others

We know that when a new member buys in, the previous members % will be
diluted equally, but our market value increases by the cash in
When the new member buys in, I understand that the stock prices are
different from previous members stock prices, but I don't think that matters
because they are buying an equal share at time of buy in --any thoughts?

Susan

-----Original Message-----
From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Gene
Rooks
Sent: Wednesday, October 17, 2007 12:43 PM
To: The Club Cafe
Subject: Re: club_cafe: member %

Susan, you probably haven't had all members buy up to the same number of
units/market value that the original members had at the time the new member
joined. Even if they put in the total of what the others have paid in,
they wouldn't have gotten the same number of units, because they were
purchased at a different price. The unit value changes in bivio daily,
based on the club's market value and cash on hand for the day divided by the

total number of units each member holds.

Aren't you printing out a Members Status Report each month? That is the
source of each members market value as of the date chosen for the report.
Your PA should specify the official valuation date each month for your club.

You should not be manipulating the numbers at all. You should be changing
your PA to state that a members value is based on the worth of the units she

has purchased, which changes daily. You set the date for her final
valuation, usually a time given in the PA.

Equal ownership is not necessary, the software accurately handles credit for

each person's contribution at the time they make it, buying them units at
the the current unit value as of the official valuation date which you enter

in the software. Where you run into trouble is trying to bend the
accounting to fit an inappropriate goal. After a while, it is difficult to

attract new members who may not have the funds to buy up to what others
already own, nor is it at all necessary.

Gene Rooks, Space Coast Chapter

Susan Utman on

A ps--I am not changing the numbers-only experimented with manipulating them
to try and figure out where our error is--and the best that I can determine
is that we have been using the wrong method to determine buy in price. If
we were using a correct method to determine valuation (based on the yahoo
dollar market value of our portfolio--all members bought in pre-Bivio
membership and reports) shouldn't all have equal units?
Now that we are where we are-can we go back to adjust the initial units
bought to reflect equal shares-we felt that when we had a new member buy an
equal market value that would also give the new member equal units--where
did we go wrong?

Thanks for your help on this!
Susan
-----Original Message-----
From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Gene
Rooks
Sent: Wednesday, October 17, 2007 12:43 PM
To: The Club Cafe
Subject: Re: club_cafe: member %

Susan, you probably haven't had all members buy up to the same number of
units/market value that the original members had at the time the new member
joined. Even if they put in the total of what the others have paid in,
they wouldn't have gotten the same number of units, because they were
purchased at a different price. The unit value changes in bivio daily,
based on the club's market value and cash on hand for the day divided by the

total number of units each member holds.

Aren't you printing out a Members Status Report each month? That is the
source of each members market value as of the date chosen for the report.
Your PA should specify the official valuation date each month for your club.

You should not be manipulating the numbers at all. You should be changing
your PA to state that a members value is based on the worth of the units she

has purchased, which changes daily. You set the date for her final
valuation, usually a time given in the PA.

Equal ownership is not necessary, the software accurately handles credit for

each person's contribution at the time they make it, buying them units at
the the current unit value as of the official valuation date which you enter

in the software. Where you run into trouble is trying to bend the
accounting to fit an inappropriate goal. After a while, it is difficult to

attract new members who may not have the funds to buy up to what others
already own, nor is it at all necessary.

Gene Rooks, Space Coast Chapter

Rip West on

Susan,

I don't understand why you are going to the trouble of pricing your portfolio out with Yahoo prices. Bivio will do it for you, and those are the prices that are used to determine the number of units going to the new member at the time of buy-in. In fact, you can pick the date for the valuation. So, I would make a valuation as of the date of the buy in, compute the amount to be paid, and enter that date for the valuation to be used when you enter the payment. Unless I am missing something, that should make your new partner equal as to units. Of course the basis for that member's interest will be different from all the others.

Having said all that, I agree with Gene that trying to keep all partners even is a losing proposition, and really serves no purpose.

Rip West
Saint Paul, MN

Gene Rooks on

Susan, evidently you developed your PA without too much reference to the
unit value system of accounting employed by all the BI accounting programs
and software, so that is why you have a muddle now. The reference point is
what date are you using for unit value? Does your PA call for a regular
valuation date each month, that would then establish unit value for the
following month? Your club's value is composed of both your stock
portfolio values, and your cash on hand.

When you determine the right date, create a Members Status report as of that
datebefore you do any dividing, to see what your current members values are.
In a perfectly maintained equal status club, they would all be worth the
same amount, and own the same number of units, because all contributed the
same amounts at the same time always. (In the real world, that seldom
happens, the unit value system quite handily tracks each member's percentage
for members paying different amounts at different times.)

Then, when your new member pays in the same market value all the other
members currently have, she will get the same number of units. Of course,
she will have a lot more paid in for those units than they did, because they
were doing it longer and buying units at lower values than they are right
now.

bivio does have Opening Balance screens, whether you can use these to
adequately get your bivio records to reflect what you expect I am not sure.
But you should be using the software for your source once you have it set up
properly. Gene Rooks

Susan Utman on

We established a date for initial valuation for the first group of members
who all joined at the same and as of today have the same number of units.
When new member joined we divided the club's value (stock and cash)by the
current umber of members and that became the new member's buy in price.
This formula must be off because each of the new members beyond the original
group have a different number of units. And, yes, each new member has paid
more than the originals. That being said, I'm not sure how to reconcile the
discrepancy between the "equal" partners!
Susan

-----Original Message-----
From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Gene
Rooks
Sent: Wednesday, October 17, 2007 2:18 PM
To: The Club Cafe
Subject: Re: club_cafe: member %

Susan, evidently you developed your PA without too much reference to the
unit value system of accounting employed by all the BI accounting programs
and software, so that is why you have a muddle now. The reference point is

what date are you using for unit value? Does your PA call for a regular
valuation date each month, that would then establish unit value for the
following month? Your club's value is composed of both your stock
portfolio values, and your cash on hand.

When you determine the right date, create a Members Status report as of that

datebefore you do any dividing, to see what your current members values are.

In a perfectly maintained equal status club, they would all be worth the
same amount, and own the same number of units, because all contributed the
same amounts at the same time always. (In the real world, that seldom
happens, the unit value system quite handily tracks each member's percentage

for members paying different amounts at different times.)

Then, when your new member pays in the same market value all the other
members currently have, she will get the same number of units. Of course,
she will have a lot more paid in for those units than they did, because they

were doing it longer and buying units at lower values than they are right
now.

bivio does have Opening Balance screens, whether you can use these to
adequately get your bivio records to reflect what you expect I am not sure.
But you should be using the software for your source once you have it set up

properly. Gene Rooks

Gene Rooks on

Susan, the problem is most likely because of whatever valuation date you
used for posting the new members money, but without seeing your database, I
couldn't tell you exactly what to do. You do realize that you need to enter
a valuation date that is in accordance with your PA for all member payments,
and it is not the same as the transaction date. Gene

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