Search found 737 matches

by RenoJay
Fri Feb 22, 2019 8:10 pm
Forum: Investing - Theory, News & General
Topic: NYT: Jack Bogle Helped Keep Inflation Low
Replies: 10
Views: 1959

Re: NYT: Jack Bogle Helped Keep Inflation Low

It's nice that Jack lived long enough to witness Vanguard become the leading fund house. I always thought it was sad that Steve Jobs passed before he got to see Apple overtake Microsoft in market cap.
by RenoJay
Fri Jan 25, 2019 5:13 pm
Forum: Personal Finance (Not Investing)
Topic: Appropriate age to communicate your will/wishes to your kids
Replies: 57
Views: 5199

Re: Appropriate age to communicate your will/wishes to your kids

I have similar sized estate. For my kids (currently 8 and 10), if I happen to go before they're of age, there will be someone to make sure they're ok. But aside from that, they won't get a "real" chunk of money til their mid 30's. It's important to me that they pursue their passions AND build a base of financial independence. If they turn into profligate spenders, then there will be serious restrictions on the inheritance. But if they turn out with pretty decent money values, they'll get a big chunk (if I'm gone) when they're old enough to have learned valuable lessons but young enough to still enjoy it and need it. As far as when I'll tell them, it probably won't be for a VERY long time. I was under the belief that my own parents...
by RenoJay
Fri Jul 07, 2017 5:10 pm
Forum: Personal Finance (Not Investing)
Topic: Residential Home for $125K. Rent for $1,400 / mo.
Replies: 43
Views: 4595

Re: Residential Home for $125K. Rent for $1,400 / mo.

I still think the best way to get a decent return in real estate is to lend other people money. Hard money lending rates are ~8% - 10% and it's entirely possible to get a first lien on a property where the borrower puts down a 25%+ cash down payment (i.e. there should be equity in the property as a cushion.) The returns are predictable and regular, there's downside protection from the cash down payment, and virtually no ongoing effort. When we consider that cap rates are in the 6% range, I'd rather get 8% and make my money off someone else's optimism, down payment and effort. I've been doing this kind of lending for about 4 years now and no borrower has ever missed or been late on a payment. How do you do this? Is there a website that faci...
by RenoJay
Fri Jul 07, 2017 9:30 am
Forum: Personal Finance (Not Investing)
Topic: Residential Home for $125K. Rent for $1,400 / mo.
Replies: 43
Views: 4595

Re: Residential Home for $125K. Rent for $1,400 / mo.

I still think the best way to get a decent return in real estate is to lend other people money. Hard money lending rates are ~8% - 10% and it's entirely possible to get a first lien on a property where the borrower puts down a 25%+ cash down payment (i.e. there should be equity in the property as a cushion.) The returns are predictable and regular, there's downside protection from the cash down payment, and virtually no ongoing effort. When we consider that cap rates are in the 6% range, I'd rather get 8% and make my money off someone else's optimism, down payment and effort. I've been doing this kind of lending for about 4 years now and no borrower has ever missed or been late on a payment.
by RenoJay
Thu Feb 23, 2017 6:37 pm
Forum: Personal Investments
Topic: Retirement savings: Lots of $, job prospects weak
Replies: 36
Views: 5874

Re: Retirement savings: Lots of $, job prospects weak

It's dumb to say, because I know I'm in a great financial position right now, but I have never been more stressed about money as I have been this last week. I was less stressed when I had no money in college and had to double check my bank balance before a night out at the bars. The reasons for my stress: a) As noted in the OP, I have done a terrible job of investing/retirement planning. I feel like I'm way behind, and am wanting to catch up. Many of my friends have 401ks through work, and are constantly contributing, while I have done nothing and know virtually nothing. I feel completely and totally lost. b) I am unlikely to earn much for the next few years. This has been difficult for me psychologically, since I've been used to earning h...
by RenoJay
Wed Jan 13, 2016 6:40 pm
Forum: Personal Finance (Not Investing)
Topic: Retired Bogleheads -- How much did you spend last year?
Replies: 60
Views: 8893

Re: Retired Bogleheads -- How much did you spend last year?

$200k. That includes about $80k of alimony/child support that will end some day. Please let it end some day!!
by RenoJay
Wed Jan 13, 2016 6:39 pm
Forum: Investing - Theory, News & General
Topic: Sigh. IlliniDave = Market Timer (VGENX) [Vanguard Energy Fund]
Replies: 58
Views: 11064

Re: Sigh. IlliniDave = Market Timer (VGENX)

I've been buying Vanguard's Energy ETF, so you're in good company, but the amount in there represents less than 1.5% of investable assets. The rest of the equity portion is mostly in total market (US and Intl) indexes.
by RenoJay
Wed Jan 13, 2016 6:36 pm
Forum: Investing - Theory, News & General
Topic: What do you use to calculate total % up or down each year?
Replies: 37
Views: 3221

Re: What do you use to calculate total % up or down each year?

I simply look at the difference in my net worth each year as a percentage. This does very, very little to tell me the performance of my funds (since my formula does not account for ordinary income earned or money spent) but when I end up with a green arrow I buy myself a double scoop of ice cream instead of a single scoop.
by RenoJay
Wed Jan 13, 2016 6:34 pm
Forum: Personal Finance (Not Investing)
Topic: Deed in 2 peoples name that aren't married
Replies: 59
Views: 7034

Re: Deed in 2 peoples name that aren't married

Agreed. Get the facts (including who invested what, who paid the mortgage, etc.) and get to an attorney. Perhaps a letter from an attorney that the ex will need to go to court to defend his claim (i.e. spend money on lawyers when he's down on his luck) along with an offer of a small payout if he simply walks away will get him out of your mom's life.
by RenoJay
Wed Jan 13, 2016 6:31 pm
Forum: Personal Finance (Not Investing)
Topic: Owner Financing a Condo
Replies: 13
Views: 2326

Re: Owner Financing a Condo

Just finished reading the other comments and realized my suggestion was years too late. Congrats on getting out of the home you no longer wanted.
by RenoJay
Wed Jan 13, 2016 6:30 pm
Forum: Personal Finance (Not Investing)
Topic: Owner Financing a Condo
Replies: 13
Views: 2326

Re: Owner Financing a Condo

I have done many "hard money" loans and been very satisfied with the result. These were not "owner-financed" but the lessons are the same. Here's what I look for: 1. A hefty cash down payment, typically 30%+ of the purchase price. 2. A reliable source of income (i.e. a job) for the borrower, and not a ridiculous debt load aside from the loan they're getting from me. 3. An interest rate that compensates me fairly for the risk. 4. That the borrower will have all their payments done through a loan processor who will automatically take money from their account, put it into my account, and keep track of property taxes, insurance, etc. so it's totally passive income for me and totally brainless. In my case, I live in Nevada, a...
by RenoJay
Wed Jan 13, 2016 6:20 pm
Forum: Investing - Theory, News & General
Topic: Let's say you wanted to buy some investments....
Replies: 18
Views: 2309

Re: Let's say you wanted to buy some investments....

I am considering buying more of Vanguard's Energy ETF (VDE) and am considering adding to my position in Vanguard's Total International Stock (VTIAX). I agree with a previous poster that the US markets do not strike me as a bargain despite the recent pullback. When we're in Dow 14,000 - 15,000 territory, I'll consider buying more US stocks.

In other news, I'm trying to make my fixed income side of the ledger a little more vanilla and am pulling back on some riskier type investments.
by RenoJay
Mon Jul 20, 2015 4:55 pm
Forum: Personal Finance (Not Investing)
Topic: Can two different companies contribute to my SEP IRA?
Replies: 1
Views: 391

Can two different companies contribute to my SEP IRA?

I run a number of small, privately held companies. I shut down the S-Corp that had been contributing to my SEP IRA. Am I allowed to have my LLC contribute to that same pre-existing SEP IRA assuming that all other rules about maximum contributions, etc. are met? Thank you!
by RenoJay
Wed Mar 25, 2015 4:15 pm
Forum: Investing - Theory, News & General
Topic: Intl Funds with Currency Hedge - Good or dumb?
Replies: 8
Views: 1163

Re: Intl Funds with Currency Hedge - Good or dumb?

Thanks. I skimmed the article and it seems to be saying not waste one's effort on currency hedging for equities; just let the pieces fall where they may. So no work for me to do! Yay!
by RenoJay
Wed Mar 25, 2015 3:43 pm
Forum: Investing - Theory, News & General
Topic: Intl Funds with Currency Hedge - Good or dumb?
Replies: 8
Views: 1163

Re: Intl Funds with Currency Hedge - Good or dumb?

Taylor, thanks so much. I clicked both links, however, they both went to the article about bonds. Was there a different link for equities? (Which is what I'm interested in.)
by RenoJay
Wed Mar 25, 2015 3:26 pm
Forum: Investing - Theory, News & General
Topic: Intl Funds with Currency Hedge - Good or dumb?
Replies: 8
Views: 1163

Intl Funds with Currency Hedge - Good or dumb?

Hi,
I apologize if this topic has been covered, but I haven't been to BH in a while. What are the BogleHeads' ideas about owning international fund/ETFs that hedge currency risk vs. just owning the funds that have both the equity risk AND the currency risk. (I'm a US-based investor.) Thanks.
by RenoJay
Fri Nov 21, 2014 9:17 am
Forum: Investing - Theory, News & General
Topic: Does investing in a 401k actually save any money?
Replies: 75
Views: 13086

Re: Does investing in a 401k actually save any money?

yzhang12 wrote:Tax free growth.
But that's my question. Is there any "tax free" growth? It seems you get tax deferred growth in exchange for massively overpaying the taxes down the road which eliminates the benefit. Am I wrong?
by RenoJay
Fri Nov 21, 2014 9:10 am
Forum: Investing - Theory, News & General
Topic: Does investing in a 401k actually save any money?
Replies: 75
Views: 13086

Does investing in a 401k actually save any money?

Let's assume overall tax rates stay the same for 30 years since none of us has a crystal ball. Let's further assume that someone who is in the 33% marginal tax bracket during his working career will be in the 28% tax bracket when he retires. Let's further assume he's an index fund investor and over the course of 30 years he contributes $100k to an index fund within his 401k and, upon retirement, it's worth $400k due to appreciation and dividends. If my understanding is correct, he'll make withdrawls from the 401k during retirement and pay ordinary income tax (28% bracket) on all the withdrawls. But had he invested this money in a taxable account the whole time, he'd have paid mostly 15% capital gains and dividends taxes along the way, possi...
by RenoJay
Tue Nov 18, 2014 8:42 pm
Forum: Personal Finance (Not Investing)
Topic: 18 and Need Help Starting [Classroom research assignment]
Replies: 67
Views: 7937

Re: 18 and Need Help Starting [Classroom research assignment

How I'd go about this assignment (which I think is very creative. I like this Prof!): Check out www.payscale.com for salary info. Then pick a high paying profession (like engineering). Start working right out of school, but live at home with mom and dad and get the student loan paid off asap. Then around age 26 or so, move to a cheap apartment with low rent and a roommate. Meet a nice person who also has good earnings, and marry young, before 30. Continue to live on your old cheap apartment budget even as your career advances and you get raises. All raises go into your investments. Great if you and the spouse can live on one of your incomes and invest the rest. Hope for a little bit of good luck with investment returns and that you have a g...
by RenoJay
Tue Nov 18, 2014 8:31 pm
Forum: Personal Finance (Not Investing)
Topic: Solo 401k Contribution Limit Question
Replies: 3
Views: 1139

Re: Solo 401k Contribution Limit Question

What total income would you use to determine the maximum contribution allowable to the solo 401k ($100k, $200k, $300k or some other amount) and how much would that contribution be assuming the owner is younger than 50? The solo 401k is for business income, so unless the interest and dividends are business related they would not be included. As the employEE you are allowed $17.5K deferral for 2014. As the employER you are allowed roughly 20% of the net profits of $100K so about $20K totaling about $37.5K. That's not exact but ballpark. Thank you very much. Regarding the interest, it COULD be funneled through the business. Would that expose it to any additional taxes such as social security/medicare? Also, if the interest runs through one LL...
by RenoJay
Tue Nov 18, 2014 6:44 pm
Forum: Personal Finance (Not Investing)
Topic: Solo 401k Contribution Limit Question
Replies: 3
Views: 1139

Solo 401k Contribution Limit Question

I'm trying to figure out which income counts toward the solo 401k contribution limits and would appreciate any guidance from Bogleheads with knowledge. Suppose someone owned an LLC that qualified for a solo 401k. Suppose the owner of this LLC had all of the following income in 2014: $100k of profit from self-employment activities that flowed through the LLC; $100k of taxable interest that DID NOT flow through the LLC but went to the individual owner; $100k of taxable dividends that DID NOT flow through the LLC but went to the individual owner. What total income would you use to determine the maximum contribution allowable to the solo 401k ($100k, $200k, $300k or some other amount) and how much would that contribution be assuming the owner i...
by RenoJay
Sat Oct 18, 2014 2:43 pm
Forum: Investing - Theory, News & General
Topic: Putting 529's into a trust
Replies: 2
Views: 839

Re: Putting 529's into a trust

Thanks very much. What about UTMA accounts...any trust implications there?
by RenoJay
Sat Oct 18, 2014 12:24 am
Forum: Investing - Theory, News & General
Topic: Putting 529's into a trust
Replies: 2
Views: 839

Putting 529's into a trust

My friend is going through a divorce and his ex wife wants him to put their kids' college accounts (529's and UTMA's) into a trust, presumably to ensure safe-keeping. Are there any downsides from a tax or other standpoint to putting these kind of accounts into a trust?
by RenoJay
Mon Sep 29, 2014 8:01 pm
Forum: Personal Finance (Not Investing)
Topic: Too many houses?
Replies: 37
Views: 7632

Re: Too many houses?

I own a bunch of houses, and it can definitely feel like "too much." The big discovery I made a few years ago was hard-money lending where I'd loan people money for them to buy a house. They deal with the headaches while providing me a 9%-10% totally passive return. In my opinion it's been a great alternative to having too much in equities and no one has missed or been late on a single payment since they realize they can lose their home by doing so.
by RenoJay
Tue Jul 08, 2014 9:29 pm
Forum: Personal Finance (Not Investing)
Topic: List of Worst financial advice (what not to do):
Replies: 144
Views: 22508

Re: List of Worst financial advice (what not to do):

I was at a dinner party at my next door neighbor's (he's worth about $20 million) and he said, "Diversification is stupid. I only invest in tech." (He made his money selling a business, not from investing.) :D
by RenoJay
Sun Jun 08, 2014 12:55 pm
Forum: Investing - Theory, News & General
Topic: Investment porn - today's edition courtesy of CNN
Replies: 15
Views: 4337

Re: Financial porn - today's edition courtesy of CNN

I read that article yesterday. I also mentioned that he pulled all his money out of equities at the end of 2007. That alone was a pretty savvy move.
by RenoJay
Sun Jun 08, 2014 11:02 am
Forum: Investing - Theory, News & General
Topic: High P/E = high future returns?
Replies: 20
Views: 2291

Re: High P/E = high future returns?

The bigger indicator for me is that lately I've seen lots of posts, articles, new stories, etc. with compelling-sounding reasons about why stocks are not expensive, why they should keep going up, etc. That's my queue to rebalance out of equities a bit. Similar favorable stories were very common in 1999 and 2007.
by RenoJay
Sat Jun 07, 2014 10:18 pm
Forum: Personal Finance (Not Investing)
Topic: The 2 comma paradox
Replies: 155
Views: 20871

Re: The 2 comma paradox

I do worry. It's just my nature. I'm in awe of the people who truly can set-it-and-forget-it because I don't fit into that camp. When I do start to worry, I usually use some math equations to remind myself that at the new number lower number I'm still in fine financial shape logically. That typically brings the emotions into check for a few days.

For those who would suggest that a proper AA will fix this, I'll disagree. Worry is an emotion and not necessarily tied to any logic. If I moved to 100% bonds, I'd still worry, so I might as well get the upside potential of equities.
by RenoJay
Mon Jun 02, 2014 10:36 am
Forum: Personal Investments
Topic: Sell stocks now to buy house in 2 years?
Replies: 10
Views: 1697

Sell stocks now to buy house in 2 years?

I have a friend who wants to buy a house in about two years. It'll likely be a cash deal for the house, and most of the funds are currently in index funds at Vanguard in a taxable account which has fairly substantial unrealized long term capital gains. Should she:

1. Sell enough equities now to cover the whole house purchase and throw the money in a CD?

2. Sell enough equities now to cover half the house purchase?

3. Sell in dribs and drabs over the next two years?

4. Use some other strategy not mentioned?

Thanks!
by RenoJay
Wed May 07, 2014 1:21 pm
Forum: Personal Finance (Not Investing)
Topic: Any benefit to a prenup for us?
Replies: 59
Views: 6508

Re: Any benefit to a prenup for us?

A lot of people are saying it's too late, but I'd suggest getting a POST-nup after the wedding. Sounds like you and your betrothen are basically on the same page for now, so a post-nup should be non controversial and probably more enforceable in court than a pre-nup since neither one is holding the wedding as a hostage. I think they're important because circumstances change. People's personalities change, particularly post-children. Interests diverge. Conceptions of "fairness" change. People get unexpected inheritances. I think it's important to lay out what you guys are both thinking and agreeing close, or soon after the wedding. You can always adjust over time.
by RenoJay
Sun Apr 27, 2014 6:26 pm
Forum: Personal Finance (Not Investing)
Topic: How much did I spend? [mortgage question]
Replies: 43
Views: 13463

Re: How much did I spend?

It's interesting...within the course of this discussion, there has been suggestion that the full amount paid counts as expense and that none of it counts as expense. That just shows that seemingly concrete rules of thumb, such as "The 4% Rule" are truly wishy washy because there is not universal agreement about what counts as spending. Again, thanks all for the lively discussion. Also, as an FYI, the mortgage is 2.75% fixed for 14 more years and the reason I hold it is several fold: 1. On an after-tax basis, I'm doing better on my fixed income portfolio than what I'm spending in interest; 2. I'm making a bit of a bet that in the next 5+ years interest rates will rise and I'll look like a genius (and if I'm wrong on this bet, the c...
by RenoJay
Fri Apr 25, 2014 9:45 am
Forum: Personal Finance (Not Investing)
Topic: How much did I spend? [mortgage question]
Replies: 43
Views: 13463

Re: How much did I spend?

I'm the original poster. Thanks for the lively debate. I actually didn't see the other thread that's being referred to. The basis of the question is this: I'm considering early retirement in a few years. I'll have about 11 years left on my mortgage at that time. I have reasonable confidence that the home will maintain it's value in inflation-adjusted terms. So I'm trying to calculate my spend as a percentage of assets (i.e. withdrawl rate, to see if I'm in the "safe" 3% range recommended for early retirees.) I do not include the house when I consider investable assets, however, since the mortgage will go away in the future, I'm wondering if it's inappropriate to include the portion of my monthly payment that goes to principle when...
by RenoJay
Thu Apr 24, 2014 10:31 pm
Forum: Personal Finance (Not Investing)
Topic: How much did I spend? [mortgage question]
Replies: 43
Views: 13463

How much did I spend? [mortgage question]

If I had a theoretical mortgage payment of $3,000 a month, and half of it went to interest and half to principle, did I spend $3,000, or did I spend $1,500 and reallocate $1,500 from cash to home equity?
by RenoJay
Thu Apr 24, 2014 9:47 pm
Forum: Personal Consumer Issues
Topic: Advise on Ads when browsing the internet
Replies: 4
Views: 822

Re: Advise on Ads when browsing the internet

Google "Ad Block." I believe it works on Chrome.
by RenoJay
Thu Apr 10, 2014 9:50 pm
Forum: Personal Consumer Issues
Topic: Life in the Bay Area and housing costs
Replies: 51
Views: 7468

Re: Life in the Bay Area and housing costs

I grew up in South Bay. The weather is lovely, but there's really no reason to stay there unless you're a high tech employee with lots of unvested, valuable stock options or if you have a strong connection to the area. I moved to Reno about 10 years ago and haven't regretted. The cost of everything is much lower, including taxes! Does the infamous "Reno wind" become tiresome? Yes, the Reno wind sucks, but depending on your location it's not always that bad. As long as you're not living on top of a hill, it's only really bad about 5-10 times per year, usually in the middle of the night. We did have some bad wind about two weeks ago that blew my kids wooden playhouse 20 feet away and rendered it unusable. The good things about this...
by RenoJay
Thu Apr 10, 2014 7:25 pm
Forum: Personal Consumer Issues
Topic: Life in the Bay Area and housing costs
Replies: 51
Views: 7468

Re: Life in the Bay Area and housing costs

I grew up in South Bay. The weather is lovely, but there's really no reason to stay there unless you're a high tech employee with lots of unvested, valuable stock options or if you have a strong connection to the area. I moved to Reno about 10 years ago and haven't regretted. The cost of everything is much lower, including taxes!
by RenoJay
Sun Apr 06, 2014 8:31 pm
Forum: Investing - Theory, News & General
Topic: Buffett hasn't beaten the market regularly since '07
Replies: 20
Views: 3754

Re: Buffett hasn't beaten the market regularly since '07

Packer, thanks for the response. I'd be lying if I claimed I understood all of it, but I still have the question that if Buffett has control of book value of BRK, wouldn't CEOs of other S&P 500 firms have control of the book value of their stocks? Aren't they subject to the same wisdom of the crowds/madness of the crowds with their stock prices that BRK is subject to?
by RenoJay
Sun Apr 06, 2014 12:40 pm
Forum: Investing - Theory, News & General
Topic: Buffett hasn't beaten the market regularly since '07
Replies: 20
Views: 3754

Re: Buffett hasn't beaten the market regularly since '07

I hope this isn't too off-topic, but Buffett compares Berkshire's "book value" against the actual return of the S&P 500 including dividends. This always struck me as an apples to oranges comparison since, if shareholders are forced to liquidate their BRK holdings, they don't get the choice to sell at book value...they must take the market value of the share price. The Berkshire Hathaway reports shows a drop in book value of 9.6% in 2008, vs. a plummet of 37% for the S&P 500. But in reality, BRK-B shares lost about 30% of their value that year. Any shareholder who ran into trouble would have had to eat that 30% loss if he sold at the end of 2008. Also, it seems to me that perhaps the book value of the S&P 500 didn't fal...
by RenoJay
Sun Apr 06, 2014 10:43 am
Forum: Personal Finance (Not Investing)
Topic: Going from S-Corp to Sole Proprietor
Replies: 7
Views: 2258

Re: Going from S-Corp to Sole Proprietor

Thank you all for the excellent feedback and advice!
by RenoJay
Fri Apr 04, 2014 10:06 am
Forum: Personal Finance (Not Investing)
Topic: Going from S-Corp to Sole Proprietor
Replies: 7
Views: 2258

Going from S-Corp to Sole Proprietor

I will follow up with my CPA on these questions, but first I was hoping to tap some Boglehead wisdom. For ten years I’ve owned an S-Corp. In the old days, I had lots of revenue from websites running through it, but lately it’s mostly a vehicle for commission income I earn from doing sales. I learned the hard way that having a S-Corp does NOT protect one from personal lawsuits, and at this point, I can’t figure out the purpose of maintaining my S-Corp since I end up paying about $2,500/year in various fees, expenses, taxes, etc. to maintain it. So I’m considering becoming a sole-proprietor to save on expenses and hassles. Here are some questions I’m wondering about and will be grateful to anyone who has insight on any of them: As a sole prop...
by RenoJay
Sun Mar 02, 2014 8:50 pm
Forum: Personal Finance (Not Investing)
Topic: What was your dumbest financial decision?
Replies: 173
Views: 25545

Re: What was your dumbest financial decision?

I bought a house in Nevada in late 2006. I knew there was a housing bubble and had been a renter from 2002-2006. Then, after I saw the local market fall 20%, I figured it was a safe time to get in. Then I watched prices continue to plummet for years. Now we're on the upswing, but the value is still 20% below what I paid. (And remember, I bought well below the peak.)
by RenoJay
Thu Feb 27, 2014 5:42 pm
Forum: Personal Finance (Not Investing)
Topic: Should I let a credit card expire?
Replies: 8
Views: 2027

Re: Should I let a credit card expire?

tbradnc wrote:I recently canceled a Chase card I've had since 2003 with a 25k credit limit and within a few weeks received an alert from Equifax informing me that my FICO score had dropped 12 points.

Still have about $150k in unsecured credit and never carry a balance so I wouldn't think closing the account would affect our utilization ratio.
TbradNC: That's a little scary. Did you score come back up? If so, how long did that take?

On a side note, it seems like opening a credit card is like buying a timeshare or joining the Mafia. Once you're in, you never get out!
by RenoJay
Wed Feb 26, 2014 5:05 pm
Forum: Personal Finance (Not Investing)
Topic: Should I let a credit card expire?
Replies: 8
Views: 2027

Should I let a credit card expire?

I received notice that a credit card which is buried deep in my drawer somewhere is going to be cancelled due to non-use unless I renew it soon. The card has a limit which is only about 6% of our total, available revolving credit, and we only utilize about 6-8% of our available revolving credit (and pay if off monthly.)

Do you think there will be a hit to my credit score if I let this card expire?
by RenoJay
Fri Feb 21, 2014 6:33 pm
Forum: Investing - Theory, News & General
Topic: Warning about P2P Lending [Peer-to-Peer]
Replies: 42
Views: 12249

Re: Warning about P2P Lending [Peer-to-Peer]

Instead, I'd rather loan $250k against a property worth $450k, get a fixed rate of 9% - 10% and be done with it. (Which is pretty much what the collateral-backed lending I've done looks like.) I'm still amazed you can find people that are smart enough to have saved a $200k down-payment, yet dumb enough to pay 10% interest. Renting until their credit is repaired (or buying a smaller house for cash) has GOT to be a smarter move for those people. As long as the banks remain so tight with credit, and as long as there are many people out there who can't qualify for bank loans, they'll likely continue to make deals for housing and only realize late in the game that they can't get financing. To them, I'm a life-saver because their other option is...
by RenoJay
Fri Feb 21, 2014 12:41 pm
Forum: Investing - Theory, News & General
Topic: Warning about P2P Lending [Peer-to-Peer]
Replies: 42
Views: 12249

Re: Warning about P2P Lending [Peer-to-Peer]

For those who have done consistently well with P2P (i.e. 8%+ returns for more than three years), I would be very interested to learn what you did/do differently from me. If you're willing to share, these details would be valuable: 1. When did you start? 2. How big are your loans? 3. How many loans do you have? 4. What screening criteria do you use? 5. Do you read the individual borrower's "pitch" for each loan, or just use your screens? 6. What credit tranches (A,B,C, etc.) do you tend to focus on? 7. Do you use LC's Prime service, and if so, what screens do you make them adhere to? 8. Even though you annual returns have been great, have they continued in the past six months or so? (That's when I saw a steep decline.) 9. Are all ...
by RenoJay
Fri Feb 21, 2014 9:38 am
Forum: Investing - Theory, News & General
Topic: Warning about P2P Lending [Peer-to-Peer]
Replies: 42
Views: 12249

Re: Warning about P2P Lending [Peer-to-Peer]

For those who have done consistently well with P2P (i.e. 8%+ returns for more than three years), I would be very interested to learn what you did/do differently from me. If you're willing to share, these details would be valuable: 1. When did you start? 2. How big are your loans? 3. How many loans do you have? 4. What screening criteria do you use? 5. Do you read the individual borrower's "pitch" for each loan, or just use your screens? 6. What credit tranches (A,B,C, etc.) do you tend to focus on? 7. Do you use LC's Prime service, and if so, what screens do you make them adhere to? 8. Even though you annual returns have been great, have they continued in the past six months or so? (That's when I saw a steep decline.) 9. Are all y...
by RenoJay
Wed Feb 19, 2014 5:53 pm
Forum: Investing - Theory, News & General
Topic: Warning about P2P Lending [Peer-to-Peer]
Replies: 42
Views: 12249

Re: Warning about P2P Lending [Peer-to-Peer]

I think the mistake people make is treating this in accordance with the Bogle-ish principle of broad diversification (and relative agnosticism to the individual borrower). There are too few borrowers using these platforms for investors to really benefit from diversification. You either have to treat each loan as a risky decision to lend money to your slightly unreliable cousin or be satisfied with average returns in the 3-5% range (which is not fair compensation for the risk taken).. You're absolutely correct with this statement. However, I had, at the peak, about $250k in P2P. If it took you a couple hours a month to place your loans, it would have taken my 10x as long, which is not a good return on my time. Instead, I'd rather loan $250k...
by RenoJay
Wed Feb 19, 2014 12:55 pm
Forum: Personal Consumer Issues
Topic: Attic Retrofit: Spray Foam Insulation [Updated w Images]
Replies: 50
Views: 9769

Re: Attic Insulation Retrofit: Spray Foam Insulation

All I know is that I got quotes a few years, and the spray foam insulation was easily 5x more expensive.
by RenoJay
Wed Feb 19, 2014 9:02 am
Forum: Investing - Theory, News & General
Topic: Warning about P2P Lending [Peer-to-Peer]
Replies: 42
Views: 12249

Re: Warning about P2P Lending [Peer-to-Peer]

RenoJay, thanks for sharing your experience. I would be interested in hearing more information like the number of notes you had, loan grades, weighted average interest rate etc. There are a lot of factors that play a role in p2p lending and those who are getting 8-10% returns once notes are seasoned. Yes, institutional investors have changed the way retail investors have to invest and auto-invest is becoming a requirement as time goes on. (see http://peersociallending.com/news/peer-peer-lending-automation-key-investing-lending-club/) Probably the easiest to share is my Prosper experience. I had around $50k in Prosper with $25 notes, so that's around 2,000 notes. The interest was all automatically reinvested into a mix of loans selected by ...
by RenoJay
Tue Feb 18, 2014 8:47 pm
Forum: Investing - Theory, News & General
Topic: Warning about P2P Lending [Peer-to-Peer]
Replies: 42
Views: 12249

Warning about P2P Lending [Peer-to-Peer]

Hi All, About two years ago I was one of the big proponents on this board for P2P lending through LendingClub and Prosper. I just want to post a caution that I've changed my tune 180 degrees. Starting about eight or nine months ago, I noticed the monthly interest collected was rapidly dwindling to the point where, annualized, it was massively below their advertised expected rates. (Now the run rate is perhaps 3-5% from what I can tell.) What I think happened is that demand for their loans skyrocketed due to institutional investors jumping on board. I think this had two effects: 1) The institutional money was likely given access to the better loans, thereby leaving the scraps for individual investors, 2) I think these marketplaces expanded t...