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Topics - Rob L

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In an unusual moment of clarity I realized what is the subject of this thread. It's something of a follow up the the "To What Lengths Do Some Folks Go In Planning Their Income Taxes" thread from last year. In that thread I posted the spreadsheet computation for a single year's decision. The retirement planning software I'd used for many years was no help so I had to do it manually. I was asking the wrong questions of it. The fundamental problem once in retirement is to find the most tax efficient investment/conversion/spending plan given the asset mix acquired leading to retirement. Obvious, but I can be slow on the uptake sometimes.

So, there is software out there that addresses this problem.
For starters, one is widely mentioned and recommended. Its a free browser based program that seems to be an excellent place to start:

After finding this it sounded vaguely familiar. "lascott" had recommended it last year in that previous thread (paragraph c). I tried out b) but never tried this one. Duh. Guess I didn't exactly know the right question to ask anyway.,18192.msg57790.html#msg57790

Also I found but know nothing about:

And it's more expensive version for financial advisors:

There are dozens of similar programs out there.
Now that I think I'm asking the right question, anyone "been there, done that" with a personal favorite?

Should be very interesting.

BTW: LC stock closed yesterday, Thursday 4/23/2020, at its lifetime closing low of $6.56 per share ($1.31 pre-split).
Don't kick someone while they are down (I'm not). A whole lot has been way beyond their control.
Almost everybody's down as we all know only too well.

General P2P Lending Discussion / Is It Time To Use The 'R' Word?
« on: March 15, 2020, 02:06:01 PM »
Recession. Okay, I said it.
Are we already in one, one shortly to come, a narrow miss or a miss by a mile?
Since the start of a recession is officially declared way after it starts we won't know for a while.

If we are or soon will be in recession we will finally get an answer to that often asked question:
"How will market place lending perform over a full cycle"?

Investors - LC / What Returns Do You Expect Going Forward?
« on: December 20, 2019, 11:48:01 AM »
I took a look at the statistics section of the LC website today. Specifically the chart titled "Investor Account Returns by Average Age of Portfolio" and made the following selections:

Average Age of Portfolio: 24 - 30 months (the maximum)
Portfolio Concentration: Any
Minimum Notes per Account: 100

Weighted Average10th90th
Interest Rate%tileMedian%tile
0% - 9%3.3%4.3%5.3%
9% - 12%2.7%4.1%5.5%
12% - 15%1.7%3.5%5.5%
15% - 18%0.9%3.2%5.9%

Something interesting to watch in the future on a quarterly or annual basis.

General P2P Lending Discussion / UK P2P Lending YouTube Video
« on: September 02, 2019, 09:51:42 AM »
A recent YouTube video about P2P lending in the UK. Thought others may find it interesting.
The YouTube channel is PensionCraft and website is FWIW I think the content is very good.

After posting its quarterly earnings after the close yesterday, LC closed at $13.00 today after touching $12.67 at its lows.
It was a loss at the close loss of -4.06%. The S&P 500 rallied 1.4% after its worst day this year yesterday.
I'm more familiar with the LC price before its reverse 5:1 split; today that is $2.60 at close, $2.53 at its lows.
LC's all time inter-day low was $2.46 pre-split on 12/26/2018, coinciding with a severe market downdraft.

Semi-retired, too much time on my hands, so I do this. I really need to get a life!
Thought some might find this interesting or at least amusing. Any comments will be appreciated.

A little background will be helpful. The bulk of my non-real estate retirement assets are Traditional IRA investments. My LC and Prosper accounts were Traditional IRA. We all know Traditional IRA distributions are taxed as regular income. I always bought into the idea that my tax bracket in retirement would be lower than in my prime earning years so, as I was always at or near the top bracket, I favored the Traditional IRA. I also have a small but non-trivial Roth IRA that is near the 5 year age threshold. The year 2019 holds a unique opportunity for me as it is my last year before I have to take annual RMD's from my Traditional IRA accounts. RMD's will tie my hands with regard to minimum distributions after 2019. My earned income this year is low; thus the opportunity and two questions to be answered.

1) Was my decades old bet that my taxes would be lower in retirement for this money than at the time I earned it correct?
2) The opportunity presented to me is to convert some of my Traditional IRA money into my Roth (and pay taxes on that amount). Optimally, how much?

The remainder of the post refers to the chart below.

The top blue line is my income weighted total effective tax rate (25.83%) that I actually paid on income. Total taxes paid (FED + Virginia) divided by total income over the years 2000 - 2018.

Question 1 is very clear; any amount I sensibly chose to convert is dramatically better than having paid taxes on the income when received.

Question 2 has a lot of moving parts. I have the flexibility to convert as little or as much as I want from Traditional to Roth IRA. It appears that the best choice is the inflection point where the Federal marginal bracket steps up from 12% to 22%. There is no way to avoid the taxation of 85% of Social Security benefits or the Virginia bracket increase from 2% to 5.75% (that is if I want to convert any money at all). The sweet spot seems to be where the Fed bracket steps up from 12% to 22% ("Target Income") and most certainly before the Virginia age deduction is phased out as income increases. "Target Income" gives me an effective total tax rate of 9.35%. I'm hoping to manage it to 11% or less in the future (dealing with RMD's). That's less than half the tax I would have paid at the time the income was earned.

Does anyone but a totally deranged soul perform calculations like this (i.e. Fed tax brackets and VA age deduction phase out, and enjoy it)??  :o

Investors - LC / Cancelled and Cancelling
« on: July 29, 2019, 06:31:05 PM »
Decided to take a look at my LC account, holdings details.
Under Charged Off there's another status "Cancelled and Cancelling".
Maybe it's been there for years but I don't recall seeing it before.
Is it a new thing or just something I never just noticed before?

General Lending Club Discussion / LC Stock Does 5 for 1 Reverse Split
« on: July 09, 2019, 10:41:54 AM »
As of yesterday 7/8/2019 LC implemented a 5 for 1 reverse stock split.
Owners now have one fifth the number of shares they owned the previous day.
The current price is $15.25 per share which would equal $3.05 per share (pre-reverse).

Might be a good thing as I seem to remember that many large mutual funds have rules against holding stock priced less that $10.00. I've been a bit more positive on the company since they announced they were moving 350 jobs to Utah. A much needed step in the right direction.

I have a relative that over the past year had to quit her job to provide full time care for her ailing husband, badly injured her back while doing so, and ultimately her husband passed way. The financial impact was a loss of about 50% of spendable income and naturally she began falling behind on everything from her mortgage to unsecured loans to revolving debt. I'm trying to help her out of the problem and have access to all her records. There's four debt accounts and she is behind four or more payments on most of them. The interesting part is that only one of the creditors has reported its account 60-89 days late and her Vantage 3.0 score remains "Fair" at 655 from Credit Karma. The reporting creditor is the one owed the least and their strategy is simple; pay me now or I will kill your credit score. In my simple mind that was the strategy of all creditors.

It had never occurred to me that it wasn't necessarily in the best interest of a creditor to promptly report non or late payments. Much better to wait and hope the debtor is able to get another loan since they might be able to seize some of that new money for themselves. I would not be the least surprised if my relative could get a loan from LC or Prosper today. She won't of course. More debt is the last thing she needs. This lender behavior is an entirely new insight for me. How naive!

Investors - LC / Cumulative ROI by Vintage Beginning 14Q1 - One Year Update
« on: February 08, 2019, 11:29:37 AM »
This is an update of the following post I made one year ago:,4785.0.html

As before the tables are another way to look at the Cumulative ROI numbers provided in graph form by Insikt's excellent web site.
I think the data speaks for itself (or at least we will all have our own personal interpretations of it). Gee we had it good in 14Q1!

True to most expectations 16Q2 was the low water mark (vintage) over the period covered for all loan grades.
It appears 17Q1 is something of a minor high water mark (post 16Q2 Apocalypse) and 17Q4 isn't looking so great. Your mileage will vary.
It seems that by MOB 12 one can get a fairly good sense of how the vintage will play out over time (assuming no financial "shocks" such as recession).

For the higher risk D&E loans I placed a bold border around 14Q4 and 15Q4. To me they look like a set of tire tracks from the bus that ran over investors in these grades at those times. You can say all you want about credit cycles and consumer behavior but I find the "step change" magnitude of the ROI from the previous vintages compelling evidence that LC greatly lowered underwriting standards at the expense of its investors in these loans. Of course this isn't news coming from me, it's why I'm leaving LC.

Investors - LC / Notes Disappeared
« on: February 06, 2019, 12:48:58 PM »
In Feb 2017 I bought my last note, bringing my total 9016. I haven't sold any since that time.
My statement in Jan 2018 showed a total of 9015 notes, so one went missing entering the new year.
I just received my Jan 2018 statement and it shows a total of 9010 notes; 5 more went missing entering this new year.
This was discussed on the forum before but I don't know where.
Wonder what's going on?

General Lending Club Discussion / LC Stock Closes at $2.55, an All Time Low
« on: December 21, 2018, 05:11:04 PM »
LC has not been immune to the debacle that has become the US stock market since early October.
Financial stocks have been particularly hard hit (and tech's).
From LC's early October high of about $4.00 until the close at the low of the day today at $2.55 LC has lost 36% of its value.
The XLF financials ETF has dropped from about $28 to $22.79 over the same period (19%).
Regional banks have fared much worse. KRE has dropped from $60 to $45 (25%).
So, here's to a bounce; even if it's a dead cat! I'll take it.
On the other hand the crash of '87 was on a Monday after a triple witch. We had a triple witch today.
Guess we'll see, but I'm not looking for a crash Monday. The algo's these days are way smarter than that. Not as smart in '87.

Investors - LC / LC Releases Q318 Earnings
« on: November 06, 2018, 06:06:13 PM »
More by accident than plan I noticed LC announced their quarterly results after the market close today. Their stock did rally into the close this afternoon so I guess good things were expected. Now the stock may take off like a rocket tomorrow but I was underwhelmed. I didn't listen to the webcast and haven't heard any opinions of the "professionals" that evaluate these things. So' I'll run through a few things in a stream of contentiousness mode as I read the earnings release.

1)  The first thing I look for in an earnings release is the GAAP and non-GAAP earnings per share (EPS) compared with previous quarter, previous year, company guidance and analyst expectations. I had to look all the way to page 3 to find it. Here it is (I'm unclear if this is GAAP or non-GAAP):

Earnings Per Share (EPS) Basic and diluted EPS attributable to LendingClub was $(0.05) for the third quarter of
2018, compared to basic and diluted EPS attributable to LendingClub of $(0.02) in the same quarter last year and
$(0.14) in the second quarter of 2018

2) LC has always (maybe not always) stressed originations growth. I remember all those exponential origination charts (pre-May 2016):

Originations Loan originations in the third quarter of 2018 were $2.9 billion, improving 18% compared to the
same quarter last year and improving 2% sequentially. (From $2,818mm to $2,886mm).

Sarcasm alert; "Wow".

3) What about us little guys; are we still hanging in there?

Well almost but not quite; still 7% of quarterly originations ($198mm vs 194mm).

The report seemed to stress numbers that "but were it only for those legacy issues"...
The legacy issues are real and aren't going away.
Someday LC will receive and pay that bill. Until then one can't pretend they don't exist.
In the interest of full disclosure I'm looking for some of my money back from stock losses in May 2016.

So, I will look at the stock price tomorrow and am not looking for fireworks.
Hopefully for those that own LC I'm wrong. Won't be the first or last time.

Clueless in Seattle

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