There is no natural law governing your question "does the
member have to leave the club?" The answer depends on what
the members of the partnership and the treasurer are
prepared to accept. My position personally would depend on
the amount of the person's capital account, the size of each
withdrawal, the number of withdrawals per year, and the
relation between the amount of each withdrawal and the
amount of cash contribution the other members would be
making at the same date as the withdrawal. I would also take
into account the number of years the withdrawing member had
been in the partnership and what was the quality and level
of participation of the member making future investment
decisions.

Jack Ranby, Treasurer
Grants Partners Investment Club



John Rice wrote:
> I can understand not having a penalty for a full withdrawl or an occasional partial withdrawal, but what about a member who reaches retirement and wants to make regular withdrawls?  Do you limit the amount of withdrawals each year?  Does the member have to leave the club? 
>  
> John 
>
>
>
>
>
> From: "Liver437@aol.com" <Liver437@aol.com>
> To: club_cafe@bivio.com
> Sent: Wed, October 27, 2010 6:36:01 PM
> Subject: Re: club_cafe: Does anyone have penalties for withdrawing?
>
>
> We have a 1% of the withdrawal amount or $100 whichever is more.
>  
>
> In a message dated 10/27/2010 6:24:35 P.M. Pacific Daylight Time, duncanjohnny@bivio.com writes:
> Greetings,
>
> I wanted to see if anyone has wording in their partnership
> agreement that penalizes members for withdrawing.  I've
> heard that some clubs do, but most don't and just wanted
> some advice.
>
> Thank you in advance!
>
> Johnny

what about a member who reaches retirement and wants
> to make regular withdrawls? Do you limit the amount of withdrawals each
> year? Does the member have to leave the club?

Hi John,

That is an interesting question. I think how often your club wants to
allow members to make withdrawals is entirely up to your club and the
size of your assets. Many smaller, newer clubs are going to probably
find it disruptive to have withdrawals happening too often. It's
just like the problem mutual funds have when all of a sudden they get
lots of people who want to move their money out of the fund.

But, I can also see a situation in an older, more established, higher
asset club, where accommodating a member with regular withdrawals
would work fine. I still wouldn't recommend any penalties in that
case. But whether or not to allow the withdrawals would come down to
how your club would like to operate and how comfortable your treasurer
is with what they need to do.

--
Laurie Frederiksen
Invest with your friends!
www.bivio.com

Become our Facebook friend!  www.facebook.com/bivio
Follow us on twitter!  www.twitter.com/bivio