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Messages - Zach

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Investing - General (not P2P) / Re: Personal Capital Blog Posts Today
« on: August 21, 2014, 11:10:10 PM »
I too, am a Personal Capital user and find their service extremely valuable for seeing overall cash flow changes and net worth, etc.

I read that same blog post this morning. My reaction is that the idea of $100k income is all a matter of perspective. The lifestyle you want to live will ultimately determine how much income you need to support it. A six-figure income could still go a long way (with the ability to institute a plan for savings and retirement).

In addition, as Rawraw mentioned, we're not only demanding better quality, we're also demanding new 'things' that never existed 30 years ago (technology). Some people may see those 'extras' as a need or standard nowadays, but it certainly contributes to how far your money goes.

Introductions / Re: Hello from Seattle
« on: July 25, 2014, 12:56:40 AM »
Welcome Jon!

It seems you've developed a pretty realistic set of goals and expectations of any investments in the industry.

Feel free to post any questions or comments you have.

That's a great article. Thanks for sharing!

Investors - LC / Re: IRA Accounts and Selling Notes
« on: April 09, 2014, 10:24:14 AM »
Hey Zach, how about moving this thread's posts to
Keeps everything in one place and there is some recent interesting info here.


Was Chris Larsen bought out when the Vermut team came on board?

Investors - LC / MOVED: Is Bluevestment working?
« on: March 12, 2014, 11:02:52 AM »

BlueVestment / Re: Is Bluevestment working?
« on: March 12, 2014, 10:39:16 AM »

Also as a side note, I think BlueVestment is becoming popular enough (and we have an active admin here) to get its own forum section...

Edit> This said, I did decide to register and check out the site with a smaller account that I have.

Good point! I will take care of that now...

Investors - LC / Re: Folio and IRAs
« on: March 12, 2014, 12:58:48 AM »
The money never leaves your IRA so why would the IRS care?  It's no different than having an IRA at a brokerage and buying or selling a stock, the proceeds/profits/losses stay in the IRA.  It's only a taxable event when the proceeds leave the IRA.

Foliofn is just a broker, not a custodian.

I populated my IRA almost entirely from Foliofn last year (i.e., transferred in cash from another IRA and bought notes on Folio) and have not seen any negative consequences.

The reason it can cause problems is because buyers/sellers determine a market price for their notes, and you could theoretically sell notes worth hundreds or thousands of dollars from a taxable account to your IRA for $0.01. While this is blatant tax evasion, I think LC would be wise to restrict IRAs to no trading, unless market prices become determined by LC in the future.

Investors - LC / Re: Folio Traders - Roll Call
« on: March 07, 2014, 02:31:10 PM »
Should this topic be in the Folio section?  I went there first today looking for it so I wouldn't be going off topic again in the wrong place, as is my wont.

The very idea of Folio subforum was always confusing to me.  When someone posts there you don't know whether they're talking about Lending Club or Prosper unless they happen to mention it in their OP.   The two Folios have almost nothing in common with each other so it's rare that you'd think of something to post there there that would apply to both.   Maybe this thread is one of those rare cases.  At least when someone posts a thread in the LC forum you know what they're talking about.

If FOLIOfn, Inc. actually made any decisions or ran a separate site then maybe I'd understand a separate subforum.  But they don't.  It's all one big farce.  Maybe a conspiracy too... they possibly had Peter create the separate Folio section just to further the illusion.

This is a good point. I'm going to add another board and rename the existing to reflect the two different platforms.

Introductions / Re: Re: Hello hello
« on: March 05, 2014, 03:53:58 PM »
There certainly is a wide array of intelligence here on the forum

PC way of saying, "Well, there are definitely really smart people...and then there are other people?" ;)

I'll nominate myself for the "other people group."

It wasn't initially intended to come across that way, but I see what you're saying :)

Welcome, NorseBoric!

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Introductions / Re: Hello hello
« on: March 05, 2014, 03:15:02 PM »
Welcome to the forum NorseBoric!

There certainly is a wide array of intelligence here on the forum, so I encourage you to browse existing posts, and jump in on a conversation (or start one)!

Investing - General (not P2P) / Re: Re: Using S-Corp for Tax Advantages
« on: February 27, 2014, 05:29:49 PM »
Later in the message I mention that I would make it function as more of a bond or OID...

Bonds don't get long term cap gains treatment either in any case, unless you sell them... as far as I know.  (If I'm wrong, someone please correct me because I'm about to pay a bunch of tax this year on them.)  So I still haven't heard any advantages whatsoever to this plan, and lots of additional headaches and even some additional tax.

Maybe have the corporation start buying back your stock after 1 year, or buying back its own debt that is owed to you?  Or do your swing trading with instruments that get you 60/40 treatment if you're not already doing so.

I'm not positive on the long-term gains on the OID, personally. The primary advantage is that I can contribute up to $51k to a Roth 401k and $33k of it would essentially be tax-free in its entirety. I know that futures get 60/40 treatment, and some index-based options, but those are pretty risky investments, so I wouldn't want to have a significant portion of my portfolio be comprised of them.

Investing - General (not P2P) / Re: Re: Using S-Corp for Tax Advantages
« on: February 27, 2014, 04:42:03 PM »
Of course with your own S-Corp or LLC you would be paying both sides of the payroll tax. That's 6.2% x 2 + 1.45% x 2 = 15.3%.
Unless the world ends (more or less) you will receive benefits for these taxes someday so it's not a complete loss.
Figuring out your social security benefit given number of quarters worked and amount of tax paid is pretty complicated and non-linear [three segment "curve"]
As you pass from one segment of the curve to the next, the amount added to your monthly check increases less per dollar of taxes paid.
That said, things will change and the current methods are probably irrelevant. Doubt returns will get better though.

It is true that I would be paying FICA tax on both sides of the equation, but the employer side is tax deductible as an expense against the profits from investing, so its really not that bad...

Any opinions on whether or not this would actually permitted?

I know that it's controversial at best, but controversial doesn't mean not permitted :)

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Investing - General (not P2P) / Re: Using S-Corp for Tax Advantages
« on: February 27, 2014, 04:31:25 AM »
To make sure Iím being paid a proper salary through the S-Corp (per IRS requirements) I would pay myself the first $17,500 (401k contribution limit), and the company would provide a matching contribution of the remaining $33,500 - to the reach defined maximum contribution limit.

So with this strategy, you are basically turning capital gains into ordinary income that you have to pay FICA taxes on.

Why not just trade in an IRA, leaving long-term stock holdings in a brokerage account?

Well, for the Roth 401k contributions, I would be paying FICA taxes - but all of the income will be placed in a tax-sheltered that's a pretty small tax to pay. Also, beyond the $17,500, the contribution the company would made is tax-deductible from earnings so it balances itself out.

I don't have many long-term investments, but I trade a fairly sizable roth IRA account already.

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