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Why You Shouldn't Trade for Friends or Family or Comingle Funds - WARNING - Bad Things Will Happen

697 views · Published 18 January 2018 · 9:29 · Indexed 12 November 2026

Channel: Rules For Rebels · 2018 · Howto & Style

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Something I've been noticing lately is a lot of Reddit posts regarding people involved in crypto who have family, friends, and co-workers approaching them asking if they can give them money to purchase Bitcoins or altcoins for them.

This is a very bad idea for a couple reasons. First off if you co-mingle their money with yours, you are now responsible for their tax burden.

Even if they agree to let you keep some extra money aside to pay the taxes, potentially their trading activity will bump you into a higher tax bracket so that your paying say 28% for example as opposed to 23% in a lower tax bracket. That affects not only your crypto trading but also your income from your job, any side hustles, a business you run, etc, you'll be paying higher taxes on all of that.

Another reason you don't want to invest for people, is now your responsible for their money. While unlikely, if an exchange gets hacked, they are going to blame you. If your account gets hacked, they are going to blame you.

I recently saw a Reddit post about this where a guys boss gave him a few thousand to invest, I forget exactly what happenned but the money got lost and now his boss is pissed at him and wants to be paid back. 

While you may feel like your helping out thsi can only end badly. There's nothing wrong with helping a friend or family member sign-up for an exchange, nothing wrong with helping teach them the technology but you definately don't want to be managing other people's money nor do you want to be comingling funds.

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