Lending Club out performs most investments and at a risk less than traditional investments (not including CDs, Savings Accounts and Money Market). Diversification, however, is the key to maintaining low risk. Never invest large amounts in one loan, split it in $25 increments and you should be fine.
Yes lending is risky, but banks have been lending forever. If you qualify your risk properly you won’t have any problems. I'm currently looking at no defaults and net annualized return of 9.7%. Granted your results may vary, but why not play around with it for a while?
www.lendingclub.com
Monday, December 21, 2009
Sunday, November 1, 2009
Credit Card Rate Increases... Fuck!
So I've received credit card rate purchase APR increase notices from:
American Express, Chase, Bank of Nevada, Pentagon Federal Credit Union, WAMU (now owned by Chase), Cabela's Card. All of these rates have increased by at least 5% and simultaneously switched to variable APRs.
All I have to say is, FUCK YOU banks and underwriters of the world. And why not? Fuck the government too! Somehow you have been able to get monies from the government (the government which is paid for by regular people like myself) while simultaneously fucking over your customers with ridiculous and in many cases unjustified (even on a risk basis) changes to your credit relationships. So you weren't happy with the money that you have made historically from encouraging people to swim in debt? You blew all the money you "earned" and didn't put anything aside for when everyone decided to stop paying you the 20% interest because they have no money left? That was poor planning on your part! But wait, who gets caught paying for you being irresponsible? The other customers that are STILL paying you and every person that pays taxes in our country.
American Express, Chase, Bank of Nevada, Pentagon Federal Credit Union, WAMU (now owned by Chase), Cabela's Card. All of these rates have increased by at least 5% and simultaneously switched to variable APRs.
All I have to say is, FUCK YOU banks and underwriters of the world. And why not? Fuck the government too! Somehow you have been able to get monies from the government (the government which is paid for by regular people like myself) while simultaneously fucking over your customers with ridiculous and in many cases unjustified (even on a risk basis) changes to your credit relationships. So you weren't happy with the money that you have made historically from encouraging people to swim in debt? You blew all the money you "earned" and didn't put anything aside for when everyone decided to stop paying you the 20% interest because they have no money left? That was poor planning on your part! But wait, who gets caught paying for you being irresponsible? The other customers that are STILL paying you and every person that pays taxes in our country.
Friday, October 9, 2009
Student Loan Repayment Surprise
I just received a letter that my student loans are going into repayment even though last time I checked they weren't going to officially enter into repayment until the end of 2010! Not a big deal because I've been paying them anyway, but now I "have" to pay them. And I don't like being told what to do!
I figured out that the school I was attending provided the loan companies with an "estimated" graduation date. But as soon as I didn't re-enroll they sent out some kind of notice to the loan companies, that recalculated when I actually stopped going to school. So not only is it way sooner than expected, but since they have to back date it, it starts in 30 days!
Again, if you are paying on your loans already, this shouldn't be a big deal, but if you aren't you could end up with a nasty surprise.
Of course if I enrolled in another class they would probably get pushed back again, but I can't think of anything I want to learn! Plus I don't really have the time anyway.
I figured out that the school I was attending provided the loan companies with an "estimated" graduation date. But as soon as I didn't re-enroll they sent out some kind of notice to the loan companies, that recalculated when I actually stopped going to school. So not only is it way sooner than expected, but since they have to back date it, it starts in 30 days!
Again, if you are paying on your loans already, this shouldn't be a big deal, but if you aren't you could end up with a nasty surprise.
Of course if I enrolled in another class they would probably get pushed back again, but I can't think of anything I want to learn! Plus I don't really have the time anyway.
Sunday, July 5, 2009
Bank Scoring System
Apparently for businesses (and I assume personal accounts) banks have a scoring system that assists them in determining if you are worth lending to that accompanies your credit score, regular income, etc. This is the bank that you have an existing relationship with. Basically they look at your average daily balance to determine your repayment ability.
So if you have under $999 you are a high 3 (or is it low 3?)
If you are between 1000 and 5000 you have a separate rating
And 5000-10000, another rating (low 5 I think)
Basically for any type of business loan you want to be above 10000 for at least a 3 month period. So even if it means borrowing the money from someone with interest, it would help significantly.
So if you have under $999 you are a high 3 (or is it low 3?)
If you are between 1000 and 5000 you have a separate rating
And 5000-10000, another rating (low 5 I think)
Basically for any type of business loan you want to be above 10000 for at least a 3 month period. So even if it means borrowing the money from someone with interest, it would help significantly.
Saturday, January 3, 2009
Invest in your mind at the expense of... everything
One of the greatest benefits of being young is that you have a lot of time to recover from any mistakes you make. It provides a great opportunity for you to attempt to learn all that you can, even at the expense of your lifestyle, money, credit, etc.
There is definitely something of value in learning from other people that have gone through similiar experiences, but too often people never make the jump to trying something that may seem "risky" because they want to make sure everything is "right". The truth is there will always be a reason not to do something, so what the heck are you waiting for?
Now I'm not saying jump into just anything, you should calculate your risks to some extent, but too often we never get out of the calculating stage! And there are definitely a lot of bad directions (see posts on multi-level marketing). But sometimes you have to go to a MLM rally in order to realize it is madness despite what everyone says.
:Example:
I want to: Open a coffee shop
Obstacles:
I've never worked in a coffee shop
I don't know how one operates
I don't have the money to start one
What if I lose my money
How will I pay my living expenses?
Solutions:
Get a job in a coffee shop, try to absorb as much info. about the business as possible
Read as many resources as you can about coffee shops!
Research success stories like Starbucks, Bigby
Budget how much you would need to barely survive and then set EVERYTHING else aside for the business
Results:
Okay so this doesn't cover every possibility but you get the idea. Of course you could discover that you hate running a coffee shop and instead want to run an ice cream parlor. Well you better believe the business knowledge is going to be relevant for that too.
There is definitely something of value in learning from other people that have gone through similiar experiences, but too often people never make the jump to trying something that may seem "risky" because they want to make sure everything is "right". The truth is there will always be a reason not to do something, so what the heck are you waiting for?
Now I'm not saying jump into just anything, you should calculate your risks to some extent, but too often we never get out of the calculating stage! And there are definitely a lot of bad directions (see posts on multi-level marketing). But sometimes you have to go to a MLM rally in order to realize it is madness despite what everyone says.
:Example:
I want to: Open a coffee shop
Obstacles:
I've never worked in a coffee shop
I don't know how one operates
I don't have the money to start one
What if I lose my money
How will I pay my living expenses?
Solutions:
Get a job in a coffee shop, try to absorb as much info. about the business as possible
Read as many resources as you can about coffee shops!
Research success stories like Starbucks, Bigby
Budget how much you would need to barely survive and then set EVERYTHING else aside for the business
Results:
- Best/Least Likely: You open a coffee shop and it does well, you continue to make it operate more efficiently and look into opening others
- Average Result/Very Likely:You open a coffee shop and it fails, you reflect on your journey and what you did wrong/right. You don't have the money to try again, but you vow to do so. 9/10 Business start ups fail in the first 1-3 years, so you just need to try 10 times to make it happen (odds are if you are moderately intelligent that you will hit success earlier, but other factors may prevent this from happening). You learned a hell of a lot at the cost of your investment, but that knowledge will pay off eventually.
- Worst Result/Don't Do: You open a coffee shop and it fails, you say it was never a good idea and give up. You lose your money, learn nothing. What are you investing in here? NOTHING!
Okay so this doesn't cover every possibility but you get the idea. Of course you could discover that you hate running a coffee shop and instead want to run an ice cream parlor. Well you better believe the business knowledge is going to be relevant for that too.
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