How much savings did you all leave in your accounts after your first equity buy in?

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Take the loan / rate arbitrage.

like

Rate is higher than MM/CDs - no arbitrage.

Buy in is not as much of an issue relative to the first tax payment

likesmart

This!

smart

You should get arbitrage from the loan arrangement, ie you earn prime + .75% on the capital and the loan is charged at prime -.75%. At least this how most of the capital loans at the B4 are set up.

As others have said, as a K1 your biggest worry should be your first two years of taxes.

smart

Oh this is an interesting point - are the taxes higher than your K1 income? If you have an annual/semi-annual dividend payment, wouldn’t they land around the same time? probably would need to speak to my HR about this.

like

Yes’ish. It’s due to a gap between being a W2 employee with withholdings and K1 without. And generally, depending on when you are admitted as compared to the fiscal and tax year could end up with a very low tax burden your first year followed by a significant one.

We tell all our newly admitted partners to bank their distributions and live off their draws the first two years. By the way this is good advice in general

Arb the hell out of it and keep your assets where they are. The borrowing is so cheap it should be a conflict but then again, who owns the firm?

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