there are whisperings of a future lp offering. Would anyone buy in? With assets out almost exceeding assets in, i will probably sit this one out
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@qr If offered you should take it. As long as the doors of Edward Jones are open you receive an automatic 7.5% return. The historical annual rate of return was above 16% the last time I did the calculations. You are required to put down 20% of what you are offered. So, if you are offered a $10,000 stake then you have to put down $2,000. You can, and should, take out a loan which is worked through Edward Jones (you do not have to go to your local bank to do so) for the other $8,000. The annual earnings are paid from the firm directly to the loan. Once the loan is paid off then the earnings come to you. If you leave you take your equity with you. In this example you take your original $2,000 plus any earnings. Essentially, you walk out with your principal and at least 7.5% per year. So, if we get an average of 16% you are making $1,600 per year. I know things can be tough, but if offered a LP you need to take it. Even you can take out a home equity loan (especially if your mortgage is less than 7.5%) to pay the down payment you will make money. Then if you are offered another one three years from now or so the previous LP's earnings essentially pay for the new LP. It is a long term wealth builder. You are building wealth from day one, but you really will not feel it for a few years at least. But, you have to look at wealth building with a long term view.
@qr The short of it is that you're buying in a part of the company as a "limited partnership", where you basically won't do anything more than you already do now. It's one of the best investments you can make given the promise of returns having a set minimum. Generally, your GP will offer you a partnership and a limit usually in the range of 20,000$. You can get a loan for it, and your dividends will go towards the loan before paying you out. If you leave the firm, you have to sell your LP, but you receive the money you had in back. There's really no reason not to accept when they offer given the loan option.
That said, I've been here for 8 years and never received an offer, nor has my GP ever reached out to me to talk about it. Supposedly it's based on tenure of at least 3 years, but evidently not for me.
Can someone explain how LP actually works here? I keep hearing about it like it’s this amazing opportunity, but no one ever breaks down what it really means for regular employees. I’d genuinely like to participate if it’s something realistic, but right now I’ve got 117 dollars in my bank account and can barely keep up with bills, let alone invest in the firm. Is this something that’s actually accessible to people at our level, or just another perk for those already making six figures?
If ELT listens to Penny’s two cents, she’ll fire all HO and take back LP.
@b0 Agreed. They always make it sound like it is going to set you up for life. It is just a tool to be used in your overall retirement strategy. Plus, do not count on it forever. If they want to find a way out of it they will. If you have an opportunity for a current pay raise then leave and fund your own retirement. Do not rely on anyone else, especially Penny and her cronies.
LP is worth taking but overhyped during recruiting. It takes forever to qualify (3 years and they must offer it), then you pay a down payment. Then it pays itself off (nice). Then it pays you (15 years post hire date…) at least if you leave you get any earned capital paid out.
Please do, more future opportunities for others if you’re “hesitant”.
@a6 It does make your individual taxes a little more complicated. But, once you figure it out the first year it is the same in each successive year. You are guaranteed 7.5% as long as the doors to EJ are open. I believe the last time I figured the lifetime partnership return it was 16. something percent annually. If they offer it you have to do yourself a favor and take it. Now, they may buy your limited partnership back if they ISP you something the third managing partner promised would never happen. But, even if they do ISP you just take the 16 percent annually until they do. Penny is running this firm into the ground, but I would jump on and ride it down with her. I would still buy in even if profits plummet.
I have one foot out the door, so I'd hesitate.
Does being an LP make your taxes a pain in the rear? Just curious. Is it 7.5% annually?
Don't do that. Assuming no changes to the payout, you're still guaranteed 7.5%. Make them cough it up, even if profits plummet. They can cry their alligator tears if they don't get seven figure distributions one year, while you still get your guaranteed sheckles.