Harmoney

**Cool Bear** · 25-01-2016, 08:53 PM

Originally Posted by Puggy

Didn't realise I was was famous! It's a little pixellated, but I'd guess I'm the lower of those two dots at the bottom. My mother always said I was special, but who knew that one day I'd be an outlier!

I was wondering the other day who are the two dots at the bottom. Now I know one. Looking at the scale, I think your -83.06 would be the second one from the bottom. So you have been in for about 290 days or 9.5 to 10 months. I did thought having a result like yours will be the result of just a handful of loans.

I have over 1500 loans at the moment with about 130+ already repaid.

**Cool Bear** · 25-01-2016, 08:54 PM

Originally Posted by permutation

Are the RAR figures published including tax?

The RAR is before taking your tax into account. And don't forget your tax is on the gross interest! So your after tax RAR will be much lower.

**Cool Bear** · 25-01-2016, 09:00 PM

Originally Posted by humvee

Im scratching my head a little as to how to explain the difference in the FAR vs the RAR figures -

My Current FAR figure(from old dashboard) is 25.80% My RAR is 18.35% Now I realize that we are talking Forcast VS actual Return but given that harmoney say

"This chart illustrates that the loss rates actually being experienced are significantly lower than the loss rates Harmoney forecasted prior to commencing lending in 2014. This is in part due to the conservative manner in which we originally forecasted and also due in part to improvements in technology and access to data that we have been able to apply in our credit decisioning processes."

This should not be the reason for the lower actual return, Now Rewrites is going to explain some of the difference, but not all of it, Now maybe I have done worse then average - but looking at https://www.harmoney.co.nz/assets/Performance-Graphs/Jan16-Update/Individual-RAR.png It would appear that 18.35% is in the middle to upper range of returns for portfolios the age of mine ~ 1 year.
Infact it would appear very few people at all are getting a RAR close to my FAR of 25.80%

Dont get me wrong 18.35% is a good return, Im just a little puzzled how defaults can be so much better then forcasted (and as allowed for in the FAR) and yet it seems that everyones RAR is way below their FAR - If defaults are lower then forecast in general the RAR should be higher then the FAR

You can still see the FAR figures here

https://app.harmoney.com/investor/da...y#/performance

If anyone at all does have a RAR that is equal or greater then their FAR I would be very interested to know

Hi Humvee, my own calculations show 16.64 but the RAR calculated by Harmoney is 14.94. The difference is timing.

When we calculate our returns we are calculating earning that interest from day 1. Harmoney only takes in the interest when we receive it. So, there is a lag as the repayment cycle is either weekly or monthly, so the RAR is lagging by that. Add to that the arrears. Also the one or two days in between when you invest and when the loan goes "live"

Oh and also the increase in fees due to rewrites. See next post

**Cool Bear** · 26-01-2016, 10:03 AM

As mentioned in an earlier post, I am now tracking the effective service fees as a result of rewrites. Due to rewrites, the fees had effectively increased from 1.25% to 2.60% (in the 7 months I have invested) although the increase is now tapering off. Hopefully it will stay below 3%. See chart below - all figures as at the beginning of the month.
service fees.JPG

**Finite** · 26-01-2016, 10:27 AM

Hi,
Is there someone out there who really knows the position regarding deducting defaults and fees against income for income tax purposes.
Harmoney does not do it so they must be under instructions from the IRD not to do so.( I guess that is because the IRD believe that they are not valid deductions).
What does one have to do to been seen by the IRD as being "allowed" to deduct these fees/losses?
Harmoney have told me that they will provide end of year statements with these values, if they are requested by the investor.
Thanks in advance.

**Bjauck** · 26-01-2016, 01:45 PM

Originally Posted by Finite

Hi,
Is there someone out there who really knows the position regarding deducting defaults and fees against income for income tax purposes.
Harmoney does not do it so they must be under instructions from the IRD not to do so.( I guess that is because the IRD believe that they are not valid deductions).
What does one have to do to been seen by the IRD as being "allowed" to deduct these fees/losses?
Harmoney have told me that they will provide end of year statements with these values, if they are requested by the investor.
Thanks in advance.

This has been discussed on this thread several times before. Last time I emailed Harmoney about deductions, they said that they will still awaiting a ruling from the IRD. See my post on 25/11/15 at http://www.sharetrader.co.nz/showthr...l=1#post598730 .

It may be time for another request to Harmoney for clarity on what amounts if any are allowed (for individual taxpayers) as a deduction for tax purposes.

**777** · 26-01-2016, 03:36 PM

It really is quite simple. The write offs are a straight non deductible capital loss. Simply a bad investment. Live with it. The 1.25% charge against interest and repayments is a deductible expense. You just have to ask Harmony what that figure is for your tax year. They should provide it as a norm but they didn't last year.

**WingingIt** · 26-01-2016, 07:51 PM

Any one have an idea on the kind of fee's people are charged for getting behind? One 'payment' since April. default.JPG

**Bjauck** · 26-01-2016, 08:14 PM

Originally Posted by 777

It really is quite simple. The write offs are a straight non deductible capital loss. Simply a bad investment. Live with it. The 1.25% charge against interest and repayments is a deductible expense. You just have to ask Harmony what that figure is for your tax year. They should provide it as a norm but they didn't last year.

Until Harmoney says otherwise, I agree with you. However there could be a possibility that since the typical individual invests in perhaps hundreds of "notes" each of which is ascribed by Harmoney a default risk percentage, then the "charge-offs" are an "anticipated cost" of the individuals investment in Harmoney notes (in the same way as service charges) and not an unanticipated capital loss. I imagine that is why Harmoney is seeking (so they have said) a ruling from the IRD.