Now my prosper account is around -3% APY (averaged over two years using excel's XIRR function) :( I wish I could say I knew what I did wrong, but I don't. The defaulted loans are all across the board with no pattern easy to see.
My accounts are as old as 600 days and I have a friend who's doing much better, currently at 9%, but his accounts only go back 300 days. Hopefully he doesn't see the same downturn as I do when he gets closer to the two year mark.
Now that I've hit the negative mark, I'm transferring out the money as it reaches my account. It will take 3 years for all repayments! Granted the money that I am getting back is coming along at a positive ROI, its a bad thing because now is perhaps the time to be buying stock.
Tuesday, January 13, 2009
Thursday, June 7, 2007
The best times to use PTO and get Overtime
Although this might seem a little silly, your time just might be worth more to your employer depending on what month it is. That is, if you get paid salary on an hourly basis. Here is a breakdown of how it works for me:
Normal work period - 11 days - 88 hours.
Extended work period - 12 days - 92 hours.
Short work period - 10 days - 80 hours.
Hourly pay = Salary / 24 (paychecks per year) / hours in pay period
Therefore my hourly pay goes up for pay periods with fewer hours and vise-versa. It works out in your favor when you take paid time off (PTO) when you aren't worth as much per hour. It also works out, perhaps more noticeably so if I were to work an extra hour for a 10 day paycheck.
Normal work period - 11 days - 88 hours.
Extended work period - 12 days - 92 hours.
Short work period - 10 days - 80 hours.
Hourly pay = Salary / 24 (paychecks per year) / hours in pay period
Therefore my hourly pay goes up for pay periods with fewer hours and vise-versa. It works out in your favor when you take paid time off (PTO) when you aren't worth as much per hour. It also works out, perhaps more noticeably so if I were to work an extra hour for a 10 day paycheck.
Wednesday, May 9, 2007
Current Prosper Rate of Return
Using excels XIRR function, as described over at Proproser says I've netted 15.63% ROI. Thats not too shabby, however my passion for finding good loans has disappeared as of late. Perhaps its because I spend too much time looking at charts such as these: Prosper Membership By Month (EricsCC.com). The membership is constantly growing, and there are more and more poachers. More eyes on the good loans. There are more loans, so perhaps its just my amazing ability to tire of a hobby.
Order of investments
I was eating lunch the other day and this topic came up. Actually this topic seems to come up about once or twice a year or so, probably around the time of paycheck contribution elections. When the topic first came up, I just listened and couldn't make heads or tails about why its smarter to go one route or another. Now I feel like I know exactly what to do, read on:
401k with employer matching should be first, this is 100% ROI plus an average of 10% annually or so. Not only is this tax deferred (meaning compounding works greatly in your favor) but it also lowers your taxable income. :)
Putting in more than your employer will match to should be further down the list.
Second is definitely an employee stock purchase plan. My company offers a 15% discount at the offering period, with two offering periods a year. Some companies make it even more worth your while with various options or the like. So if I can go without 10% of my salary for 6 months, I get 1.5% of my salary free two times a year. Since you can take the principle out at every enrollment, I can count this as a 30% APY on 10% of my salary. A $60,000 salary would net me $1,800 a year. Thats a nice Christmas bonus! If I let the first $900 ride on an average of 10% stock increase, its an extra $45. Of course the 15% is taxed as normal income, and I'd have to pay capitol gains tax on the $45 if I took it out before having it a year.
Third, if you plan on having a larger income when you retire than you do now, you should max out your Roth IRA before contributing more towards your 401k.
As an important disclaimer I'm not a math wiz nor do I claim to know all the tax implications. Please feel free to add to the comments if I make any mistakes!
401k with employer matching should be first, this is 100% ROI plus an average of 10% annually or so. Not only is this tax deferred (meaning compounding works greatly in your favor) but it also lowers your taxable income. :)
Putting in more than your employer will match to should be further down the list.
Second is definitely an employee stock purchase plan. My company offers a 15% discount at the offering period, with two offering periods a year. Some companies make it even more worth your while with various options or the like. So if I can go without 10% of my salary for 6 months, I get 1.5% of my salary free two times a year. Since you can take the principle out at every enrollment, I can count this as a 30% APY on 10% of my salary. A $60,000 salary would net me $1,800 a year. Thats a nice Christmas bonus! If I let the first $900 ride on an average of 10% stock increase, its an extra $45. Of course the 15% is taxed as normal income, and I'd have to pay capitol gains tax on the $45 if I took it out before having it a year.
Third, if you plan on having a larger income when you retire than you do now, you should max out your Roth IRA before contributing more towards your 401k.
As an important disclaimer I'm not a math wiz nor do I claim to know all the tax implications. Please feel free to add to the comments if I make any mistakes!
Monday, May 7, 2007
Stop the Spending, Start the Budgeting!
Somethings got to budge(t)!
I haven't saved a single dollar in 4 months!
I haven't saved a single dollar in 4 months!
Tuesday, May 1, 2007
Pearbudget, MyMint, Quicken, NetworthIQ
Sheesh, when will MyMint come out?! I'm tired of all this hype and waiting!!!
Friday, April 20, 2007
Invest vs. Buy a motorcycle
Lets say that you have $3-10 thousand. You check out craigslist for motorcycles and see a clean Kawi 900cc. Then you head over to LazyManAndMoney and get jealous that he's already making more than $300 every month from passive income. $8000 in prosper (at 15% ROI) could get you around $100 in monthly passive income. Hard choice!
Here's what I would do:
Start investing into prosper, $8000 is going to take a while to win bids, especially if you're going for 15% risk adjusted. Use prosper or other cheap lending option to get the bike at say 8%. Woo-hoo! Now you're making 7% off of $8000 which is a cool $45 a month passive income. This is great. How come no one thought of this before? Well...there is one small gotcha: You have to pay taxes on the full 15%; inflation kills off another 2.5%; the risk is some what unknown on prosper; prosper charges 1% at the front of the loan; it'll easily cost you $45 a month in insurance for your new bike; it takes time and effort to find borrowers that you trust. Eek! Suddenly this is sounding like a bad idea.
Here's what I would do:
Start investing into prosper, $8000 is going to take a while to win bids, especially if you're going for 15% risk adjusted. Use prosper or other cheap lending option to get the bike at say 8%. Woo-hoo! Now you're making 7% off of $8000 which is a cool $45 a month passive income. This is great. How come no one thought of this before? Well...there is one small gotcha: You have to pay taxes on the full 15%; inflation kills off another 2.5%; the risk is some what unknown on prosper; prosper charges 1% at the front of the loan; it'll easily cost you $45 a month in insurance for your new bike; it takes time and effort to find borrowers that you trust. Eek! Suddenly this is sounding like a bad idea.
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