Harmoney

[Bjauck]

In addition to the current Harmoney-supplied RAR, based only on the value of your notes invested. Wouldn't it be useful & more realistic also to get a figure based on: 1. Your total investment in the Harmoney system, including amount not actually invested in notes 2. A net return after deducting your marginal tax rate (levied on gross interest) in addition to deductions for the charge-offs and service fees. The net return could then be grossed up using your marginal tax rate and making allowances for which if any of the service fees and charge-offs are deductible for their tax circumstances.

[Harvey Specter]

In addition to the current Harmoney-supplied RAR, based only on the value of your notes invested. Wouldn't it be useful & more realistic also to get a figure based on: 1. Your total investment in the Harmoney system, including amount not actually invested in notes 2. A net return after deducting your marginal tax rate (levied on gross interest) in addition to deductions for the charge-offs and service fees. The net return could then be grossed up using your marginal tax rate and making allowances for which if any of the service fees and charge-offs are deductible for their tax circumstances.

1. could be helpful?
2. i think Gross returns are best as thats how pretty much every other investment is quoted (with exception of PIEs). Everyones tax rate etc is different so would be far to hard for Harmoney to calculate. The fact that charge offs are probably non deductible for most people does distort the mental calculation compared to most investments but how is Harmoney to know your tax situation.

[Bjauck]

.. 2. i think Gross returns are best as thats how pretty much every other investment is quoted (with exception of PIEs). Everyones tax rate etc is different so would be far to hard for Harmoney to calculate. The fact that charge offs are probably non deductible for most people does distort the mental calculation compared to most investments but how is Harmoney to know your tax situation.

It is not necessarily a particuarly accurate comparative gross return however depending on level of charge-offs, their deductibility and the average amount earning no interest in your account. I am not sure how difficult it would be for Harmoney to provide a customised Net RAR for investors. I would have thought that it would be quite simple to provide a calculation, with investors selecting their RWT rate and whether or not they want charge-offs to be tax deductible. The resultant net figure could then be easily grossed up using your selected RWT rate to provide a figure for comparison with other investments. Harmoney have all the figures for their investors. Along with notifying their RWT, Investors could tell Harmoney whether or not they want charge-offs to be deductible for the calculations.

[Cool Bear]

May be a problem caused by too much Zumba.??

Haha.. You must come to a class one day, you may like it.

[Cool Bear]

How is everyones realised rate of return going?.
mine is 12.88% so far. Nrly all A or B investments with a couple of C thrown in. No defaults so far.
only been a year or so, but encouraging start

14.72, A to F, lopsided bell curve favouring A and B over E and F. 1600+loans, 16 writeoffs, 10 months.

[Cool Bear]

14.72, A to F, lopsided bell curve favouring A and B over E and F. 1600+loans, 16 writeoffs, 10 months.

just sign in to Harmoney make that 18 chargeoffs, which will probably drop my RAR to mid 14%

[Kelvin]

just sign in to Harmoney make that 18 chargeoffs, which will probably drop my RAR to mid 14%

Seems like they do charge offs in one big lot every month. I just got my second today - E4, hadn't paid since last October

With such a small amount invested, each charge off wipes out pretty much a whole months worth of profits for me

[Monica@Harmoney]

Monica/Dan, I was wondering whether Harmoney has considered providing an affiliate or referral program where investors (and possibly lenders) can earn a commission or fee for referring new clients?

Hi mit322. To be honest, we haven't considered this but its an interesting concept - thanks for your feedback. Monica

[Darchie]

I can see why the fee on rewrites are affecting different investors differently
..for me it's lethal at the moment ..but in time it will improve!! ... I realise my mistake now though ...
I'd tried to invest my 40k too quickly and didn't fractionalise it enough.
Also now i only look at A5 if absolutely nothing else offering but no other A's.

You see putting $500 into A loans doesn't work well when they're repaid for rewrites. .. I note one of my A5's which I'd put $300 into repaid 5weeks later ... so most of my repaids (have 44 now) will have the 1.25% being charged on those higher principal amounts!
So my advice to anyone getting into Harmoney is spread your entry over time and DO Totally fractionalise, a rewrite fee smack on one note is here nor there!

[Finite]

I can see why the fee on rewrites are affecting different investors differently
..for me it's lethal at the moment ..but in time it will improve!! ... I realise my mistake now though ...
I'd tried to invest my 40k too quickly and didn't fractionalise it enough.
Also now i only look at A5 if absolutely nothing else offering but no other A's.

You see putting $500 into A loans doesn't work well when they're repaid for rewrites. .. I note one of my A5's which I'd put $300 into repaid 5weeks later ... so most of my repaids (have 44 now) will have the 1.25% being charged on those higher principal amounts!
So my advice to anyone getting into Harmoney is spread your entry over time and DO Totally fractionalise, a rewrite fee smack on one note is here nor there!

Darchie,
Equally, you could have been fine with a low degree of fractionisation - and beaten the average.
Max use of fictionalization means you end up with the average.

ie. given the distribution of the total of Harmonys loan data (std dev and mean etc) there is some calculation that gives the number of loans you need to be invested in, that will give you a 99% confidence of achieving the average.
May be some statistician out their can supply the details?