I updated my Quicken Prosper.com brokerage account per yesterday’s post: http://www.rateladder.com/2007/04/10/adam-nash-merged-with-rateladder-to-form-the-ideal-quicken-solution-without-prosper-integration/
The one things that is even easier is that if you use your monthly statement you don’t need to enter a fee transaction… However, I also used my account history to update my account for March… I plan on using my statement to reconcile these numbers. The March estimate also needed a fee transaction since the prosper history includes the fees. Or I could have just waited another day or two to get my March statement.
The bottom line is that for each month there are 3 transactions… A purchase for new loans, a sale of principal portions of payments, and in interest distribution for interest portion of payments. If you have a principal reduction (I haven’t had one yet, but I think they come from debt sales or bankruptcy) then you would also need a transaction for this… I haven’t decided how to enter this, but I think it is a sold transaction for a $1 with a commission for the principal reduction. Thoughts?
The benefits
- Low Number of Transactions to Enter
- Cash vs Loans Account Balance Tracked
- ROI for Account and Prosper Loans Tracked
- Prosper Loans Called Out as Different Asset Class
The downside
- All loans Rolled into a Single Security (Individuality is Lost.) (You will be Assimilated.)
My YTD results are 12.78% for account, 14.72% for loans.
My all time results are 7.33% for account, 9.55% for loans.
I would like to thanks Adam Nash of Psychohistory for his post regarding his Prosper and Quicken Solution which I combined with my original approach to come up with the current approach.
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8 comments ↓
Thank you for this great blog. All the ads are a little disconcerting but I guess the content makes up for them. I will checking your blog for updates.
I also write about Prosper on my blog. You can find my Prosper related posts here: Link .
Sanjeev
The ads pay for hosting… If you see something you like or interesting don’t hesitate to visit.
I am glad you like the content.
[...] Update (4/11/2007): OK, last update. But Rateladder.com has followed up with a finally post on the topic. Between the two of us, I think we’ve provided the best way to handle this until we convince Prosper to provide downloadable transactions. Posted in Personal Finance, E-Commerce, Economics. [...]
Hi Kevin,
I updated my post with a pointer to your final updates. Glad I could help here – this issue of how to track Prosper in Quicken has been bugging me for more than a year!
In terms of principal loss due to bankruptcy or settlement, my recommendation would be two transactions:
1) A “Sale” of shares to represent the decrease in principal.
2) A “Misc” expense, attributed to a “loss of principal” or “bankruptcy” expense to remove the cash from the account.
Adam
Question: would the principal repayment be considered a “return of capital?” as opposed to a sale? What are the implications of using one category over the other? I’ve taken a look at the irs (a search on the phrase returned numerous results) and wikipedia (http://en.wikipedia.org/wiki/Return_of_capital)websites on the topic, but I’m still a little hazy.
I could only find the IRS applying the phrase to stocks and mutual funds.
I’ve tried both in Quicken. Recording principal payments as sales resulted in my cost basis increasing when that payment was reinvested, but with return of capital used the cost basis did not increase. (Well, technically it did with the purchase, but it declined by an equal amount when the payment was recorded.)
I like the idea of my cost basis only being what I move into Prosper I will try it out…
I posted my responce here: http://www.rateladder.com/2007/04/17/accounting-for-prosper-in-quicken-strategy-update/
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