To start, I am a college senior. I have been very interested in the stock market since middle school. I began investing in high school (a few bucks and shares), and seriously investing (a few thousand, a lot of money for someone my age) in spring of my freshman year of college. I am now a senior. In the three years which I have been investing (by this I mean - checking throughout the day, researching hundreds of securities, etc), my personal fund is up just over 200% in the 3 year period, and the yearly rate of return is upward trending. Compared to literally everyone else I know who has been doing investing during this time period, my number is enormous, and I am by far the most interested in the topic. Furthermore, the 200% is quite small in comparison to what it could be. I got out of several stocks (which eventually posted increases in the 1000s percentile compared to when I purchased them), thinking a 70-80% return was excellent. Though I obviously have a tremendous amount still to learn, and know far less than I do not know, I have learned from the mistakes I have made, hence the upward trend in yearly return rate. I am very good with some parts of math, others not so much. I have a limited but basic knowledge of the financial industry, how it works, the skills needed to succeed, etc. I am just very interested in the idea of the stock market, have been for a while, and for my age I believe, have become fairly good at using to make money.
Anyway, it is no coincidence that friends often times come to me for investment advice, wondering what stocks I am liking at the moment, things like that. I love discussing them, and do it willingly for free because they are friends just trying to make some money ontop of what they have already earned. Beyond that, I think my dream job would be running a hedge fund, and recently have had above average amount of people approaching me for advice. The obvious next thought is "Why don't I stop telling them what to do with their money, and rather just have them give it to me to manage for them". So, we have had some of these discussions, and several people are on board giving me some money to invest for them.
The thing is, I am a big believer in knowing what you don't know. I am betting there are laws I am unaware of which would prevent me from taking their cash and investing it on my personal account, hence why I havent done it. So, I am wondering what I can do. Clearly this is very small, but I think the sooner the better to start, hence why I am looking into it. Obviously this is not a 'hedge fund', more just managing a small sum of a money from a few people I know. However, the idea is to have it do it will, get referrals, and have it grow in size, and perhaps one day the road, turn it into a hedge fund, which I created and run. I understand that process is a 1000 step one, and I am just looking for advice on step 1. I am not somebody who hears the word 'hedge fund manager' and thinks of gulf streamers and yachts. Rather, I have always been interested in the stock market, and making money off it. I think I want to do that full time, but not as a day trader (too short), so hedge fund and mutual fund manager seems like the way to go, but the strategies I have employed of buying long and shorts together to protect against losses, seems to clearly fit the bill of a hedge fund strategy. Hence, here I am.
In short - Say I have a dozen people, made of soon-to-be college graduates, older family members, etc...who would be giving me, say, a ball park figure in the $12,000-$15,000 range, + $5,000 if my own money, for $17-20,000 total, to invest for them. Clearly not a very large number. Is there a LEGAL way to start an individual fund, which I would control, using their money, for them?