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Why do it at all?
(Originally posted in slightly different form on the GenForum General Forum page as a reply to a question from Mel Burstein, "What relatives do I include in my Family Tree?")
I agree with [other people who responded] in that who you enter is your choice, but I'm obsessive-compulsive enough to suggest you establish a standard for yourself early on. Many people limit themselves to their direct ancestors, or their children's direct ancestors, or their grandchildren's direct ancestors. Some pick a distant ancestor and try to track down all of his/her descendants. Some people stop when they get to "the immigrant" - the first person in that line to arrive on these shores, longing to breathe free - and pick up another line. (If you are in the UK, that gets tough, because "these shores" would be England and your immigrant ancestor could go back to someone tagging along with William the Conqueror.)
You should decide how far you want to go, based on how much time, money and interest you have in the sport. Then you should set a standard for yourself. If, for instance, you decide you will start with your children's direct ancestors back to the first immigrant to the US in every line, you have to decide if you want:
You pretty much have to try for all the children if you try for any of them, or it will look like Alice and Albert only had only one child.
One thing I would suggest - however you limit yourself, try for a spouse for everyone you collect. If you are ever going to publish your work on the Internet, the spouse is the surest way to identify people. Publishing your work on the Internet, in turn, is the fastest way to share your research with others.
If you are not careful, it is also the fastest way to accumulate garbage you can think of; a few genealogists go for quantity instead of quality. They are happy to trade GEDCOM files showing that Charles, Carol's husband, was the second son of a European family that had royal blood and immense wealth. He came to America after being accused of poaching in King's game. (He boiled the Royal Monoply set.) He served as a Colonel in the First Oklahoma Paratroop Regiment during the Civil War and married a Cherokee Princess. All of this has to be true - you're reading it on the computer, aren't you?
Most of us are slow and careful. We'd be happy to share, if our lines intersect. The easiest way to see if they intersect is to find some identifier; birth place or date, marriage date or place, spouse, death date and place. The spouse is the best of the seven, in my experience. Your fourth great uncle by marriage, Bob Peterson, might be my fifth great-grandfather, Robert Petersen. Your Bob was born 3/4/1854, mine 4/3/1845. But, if yours and mine both married Malinda McCorkle, we'd know we should start comparing notes.