RenoJay wrote:My questions for the BogleHeads:
1. Before considering moving my IRA to LendingClub, what questions should I ask LC and/or Vanguard?
2. Anyone know if this would be considered a "self-directed" IRA after the move? If so, what pitfalls would I need to avoid to keep the IRA benefits?
3. How hard is to to move the IRA back to Vanguard in a few years if/when bond yields meet my criteria for investment? (At that point, I'll go to the 3 fund portfolio at Vanguard and be done with the funky alternatives.)
4. What other eventualities should I think about?
5. For the sake of argument, assume that you agreed with me on bonds/fixed income and that you had the investment mix I do. Would you move your IRA to LendingClub or keep it at Vanguard (where it currently holds equity funds and therefore isn't providing all the much tax benefit)?
Alan S. wrote:As you indicated, this is a start up, and their indicated default rate of around 2.5% is pretty green and looks low, although an increasing default rate could be offset by higher interest rates or fees. I would be equally concerned with seasoning of the numbers for this business model than economic changes affecting the default rate. The self directed IRA custodian will have to handle the usual IRS required reporting, but there shouldn't be a risk of prohibited transactions involving the loans.
I wonder if there is any potential litigation exposure from the established lending industry relative to regulatory or other advantages that PtoP may have. Big fish don't like to have their waters invaded..
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