Can I manage my uncle`s money?

Hello,

My maternal uncle is an NRI. He comes only once a year. While discussing many things with we came to the conclusion that he is willing to give me money to trade.

But can anyone please point me to the problems that I may face while doing so?

BTW I trade my own account.

Please reply.

Thank you.

Check with your CA for taxation issues.

If you want to maintain a good and harmonious relationship with your uncle, suggest don't. :lol::lol:

Rest upto you.

:rofl::rofl:

How will you account for your share of profits/losses?

thats extremely risky.
you might end up in ruing the relationship....
what happens if u loose money ? will he be ok ?

My dad once offered me money to play.. i said him " satta joua khulenga lagin aapne money se .. mera profit mera loss.
if u give me money and i loose it all it be like u lost even without paying go i won;t take your money "

Hi

On what basis he is willing to give you money. There are many choices.

1. He is giving you money as a gift, then its your money and you are not answerable for profit or loss to him
2. He is giving you money as a refundable loan, with/without interest and you have to return it in a specified or say unspecified period of time.
3. He is giving you money for trading purpose on profit sharing basis. But then what about loss.
4. He is giving you money to trade on his behalf (may not be on profit sharing basis) and again what about loss.

Hello everyone!

I thank each one of you to bother to answer the query. I took all the suggestions constructively.

The tentative deal is this:

1. I get an amount.
2. Use/roll it for 1 year.
3. From 13th month I pay him certain amount monthly.

This assumes that the risk is mine.
It also assumes that extra profit(if any) is mine over the monthly payment which starts from 13th month.


My doubts are :

1. - How do I receive the money from him. I think among the options suggested by TraderNiftyBank, 2nd option fits here.

2. - How do I segregate the profit and loss between my and his money as raised by Timepass?

Either I have to trade from a different account in which case I have to place orders twice.
Another option which I have thought about is NAV system.

Please guide.

I was also wondering how managed accounts services work?

Please reply.
Thank you.

Main questions here comes as under:

1. What if you end up losing money, would you pay from your pocket 'that certain percentage / amount'?

2. Whatever percentage it is to pay him, do you make that percentage for yourself in your trading ?

3. Is this percentage higher than or lesser than bank loan interest?

4. If this percentage is higher than bank loan interest why borrow (since you will have an obligation to pay him a certain percentage, hence I call it borrowing) from your uncle, why not bank ?

Think for answer of these points, you will get the answer.

Money matters is one of the main reasons because of which relations go bad. If you make a loss your uncle will not like it as no body likes a loss.He may say anything but in case of loss, the relations will go bad.

Before even thinking of managing others' money you must ensure that you are profitable in your own trading.And if one is profitable in his trading, he does not need others' capital for trading...he already has his own capital.Mostly unsuccessful traders think that if they have larger capital,they will be profitable.It is a false notion and one is cheating himself if he is thinking that.

So think about these points honestly and then decide.

Smart_trade