Interest is calculated on principal including payment protect. Actually I think I'll opt out of this, not liking the undertones...
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Interest is calculated on principal including payment protect. Actually I think I'll opt out of this, not liking the undertones...
I'll give you a moment. Read it again and I'm sure you will twig. Interest on the pp is not the relevant cashflow, its the recognition of the principle.
Otherwise... If you're 10 or so months in, with 30% outstanding in payment protect. Your XIRR is probably 1.5 to 3% inflated from the PP. (The XIRR on my PP is at 45% but I'm only 4 months in; and have only been learning today how that maps out, as I run some forecasts). Nothing beats actual data to verify, so not sure where in that range you would lie.
But in the end, doesn't matter too much its just XIRR. I said at the beginning the methods that are being used to calculate are not reliable, which during the course of this discussion have been able to identify and quantify the various components. The mature portfolio isn't going to be so far out, like Alistar_Mids, mine will be massively different... You've pointed us towards XIRR in earilier threads which you championed. In the end factoring PP probably means Harmoney's returns may not be that much higher then other P2P providers in this country, and with a significantly higher risk attributed. Esp in platform 1.5, which all the new loans are on now.
So lets move on.
Clearly the mistake that you've made...
More than one of us disagree... Not sure that you can be awarded the final say...
A complete turn around from what you indicated earlier...
Somewhat of a generalisation...not my experience.
Oh please, lets...:eek2:
Can you explain what exactly the point of that post was Myles.
It seems to me that you are just picking out random bits in isolation, in a cynically an unconstructive way.
Just because you can slap a dead cat on the table, doesn't make you the man.
Hi Guys - all this XIRR etc. is very boring for those of us (the majority) who don't share your interest in your pet projects. Let's all agree to value our returns on our own personal preference and just get on with the job of making money. If you guys want to continue your argument please do so by personal messaging and let the forum return to its proper function.
I am keen to know what the simple return of the "High Rollers" on this forum that state they have between $80,000 and $110,000 lent through Harmoney Loans.
What is your return on your balance after 6 months, 1 year, 2 years or more. Rather than all this XIRR business.? Surely if you had a steady balance of $100,000 for say 12 months and received $13000 Gross interest including defaults, that would fundamentally be an excellent return.
15.52% after fees, taxes and defaults is my current 'if I could cash it all in tomorrow' value. But I can't cash it all in tomorrow, so how meaningful is that value?
Added: That value includes the 3.5'ish months building the the total investment which is what is used in the calculation, so my real return (which needs something like XIRR to calculate) is actually higher (at this point in time).
Leesal have a very valid point on the XIRR for which I can give an example on an actual fund I have invested in Harmoney on behalf of a friend. It is just 3 months old and about $80k.
The first RAR from Harmoney is:
11.34% as shown in the attached screenshot.
When I calculate the XIRR, it is 20.5%. (note for Leesal, my method is just simply accounting for deposits - no withdrawals - and taking the ending o/s bal as cash return, no individual loans calculation).
However, when I remove the PP effect on the o/s balance of approx $1435.31. ((the difference between "Borrower Principal Amount" of $81435.31 and "Loan Investments (funded)" of $80,000.00)), the resulting XIRR is just 8.26%. The difference is of no surprise to me as I expected that. The month before (2 months in) it was something like 22% vs 4%.
As time goes by, the gap will narrow a lot. My 14+% RAR for my own investment (see post above) of about 3 years have an XIRR of 14.4% and XIRR (with PP removed) of 13.4%. For all these XIRR figures, I simply added back the tax paid to date as a lump sum figure to the o/s balance to enable comparison to Harmoney's RAR.