Common Questions and Uncommon Answers

I'm interested. How do I make a contribution?

Making a contribution is easy. Let us know you’re interested, and we will share the appropriate information to make an electronic transfer of funds. Of course, a check always works too. A minimum initial contribution of $5,000 is required.

How long will my contribution be committed?

Each FIG commitment period runs for the calendar year; so, if you make a contribution on February 1st, it will be committed (i.e., not withdrawable) until December 31st of the same year. Each Friend’s initial contribution is also withdrawable after the first 3-month period if FIG did not achieve at least 5% cash earnings during such initial 3-month period. At the end of each calendar year, you can choose to withdraw entirely, withdraw partially or stay invested. We, of course, encourage you to stay invested!

I’ve heard about “diversification”. Is FIG diversified?

The short answer is no, FIG is not “diversified”. The longer answer is that FIG is an equity-based investment group that is invested in various high-quality, iconic American companies that FIG believes are exposed to relatively minor company-specific risks. In other words, FIG believes that Coca Cola will be selling Coca Cola ten years from now.

How will I know the status of my investment?

FIG is about transparency. During the first week of each month, FIG will distribute a statement to each Friend setting forth the amount of such Friend’s contribution, capital gain, and cash earnings during the prior month. If you ever have questions, just let us know!

What if I have an emergency and need my funds?

We’re all Friends here, and we’re always here to help.

Is FIG a financial advisor? How is FIG different?

FIG is not a financial advisor or a fiduciary, and does not provide advice. FIG is a centrally managed investment collective. By joining FIG, each Friend becomes a non-voting member of Friends Investment Group, LLC, a Delaware limited liability company, with a non-voting membership interest in proportion to his or her contribution.

How are my gains taxed?

FIG incurs short term capital gains on a weekly basis, and is a pass-through tax entity. This means that each Friend is responsible for payment of taxes on the gain of such Friend’s contribution (which is basic income, like a salary). In March of each year, FIG will distribute to each Friend a statement of such Friend’s capital gain and taxable income, which should be added to such Friend’s other taxable income when preparing taxes.

Importantly, as with any investment in public markets, FIG’s investments rise and fall. While FIG achieves weekly cash gains, it is possible that Friends have taxable income that is greater than Friends’ balance at year end. For example, if a Friend contributed $5,000 in January and achieved $2,000 of cash gains throughout the year, that Friend will be taxed on $2,000 of earnings, even if the individual stocks held in the FIG portfolio dropped at year end, making the Friend’s current investment “on paper” less than $7,000. Think of a rental house - you are taxed on rental income even if the house itself falls in value on paper. As FIG is not meant for short term investors, this should not be concerning - the investment thesis is that the stocks are quality investments that will recover in time - Coca Cola is still selling Coke. In 2021, a Friend that invested $5,000 in FIG incurred an approximately $900 tax liability (based on normal income tax rates).