My wife has a pHd in engineering and is one of the smartest people I know. Her approach to solving problems never ceases to amaze me in both it’s depth of knowledge and practicality. It’s sort of a mesh of high-minded scientific principles and Larry the Cable Guy’s “Git-R-Done” methodology.

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Some of you may have heard of dividend capture strategies used for stocks. I’ve tried it in the past with limited success and no longer look at dividends as part of short-term investments. This year many mutual funds will be distributing relatively large amounts of capital gains. This is due in part to their having used up the tax credits for losses from the tech bubble crash. All this got me to thinking about whether this would work well in a tax-deferred account.

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In an earlier post - Prospering from Prosper - I had pointed out a site called SavageNumber which had a number of tools you could use to help with your Prosper loan selection. A month or so ago I discovered another site which has an amazing array of stats about lenders and borrowers.

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I logged into Prosper today to see if I had enough money to bid on another loan. I didn’t, but I did notice that the one loan I expect to default as actually made a payment! The borrower is still far from being current, in fact the entire payment amount went to interest and fees, there was no reduction in principle.

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My wife and I are in a rather unique (for us anyway) situation this year. She lost her job at the end of January, and was given a lump-sum severance equal to nine months of her salary. The severance was taxed at the 25% bonus tax rate which means a huge chunk was withheld by the federal government. To make matters worse, there were no 401K contributions taken out of the severance amounts, meaning the full amount would be taxed.

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After some deliberation, I’ve decided to start cashing in the I Bonds I purchased a year or so ago. It’s not that I don’t think they are good investments, they just don’t fit my needs right now.

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New I Bond rates were announced this morning. The Bureau of the Public Debt kept the fixed rate steady at 1.4%. Combined with the inflation component of 3.1% as I posted about earlier, the rate of return for the next six months will be 4.52%. Again, not great but not too bad either.

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As a couple of readers pointed out, it’s been quite a while since I updated you all on my progress with Prosper. Overall, while I am pleased with the return I’ve been getting, I’m not spending a lot of time with the site.

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This morning CPI-U (the Consumer Price Index for All Urban Consumers) for September came out at 202.9. This is a 1.55% increase from March of 2006. While this doesn’t predict what the new fixed rate component will be on November 1 we can at least measure the variable (inflation-based) portion of the new I Bond rate.

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Whew…

I had thought that once we’d moved into the new house that things would calm down and I’d be able to write. I’ve really missed tending this blog, more than I’ve had time to realize in the past few weeks. Anyway, I’m back and hopefully for good. There are still some things going to that will pull me away but I should at least be able to get back on schedule.

So, first things first, an update on where we’re at. I will likely post more detailed news on many of the topics below, when I do I’ll link to them from within this entry.

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