Feb 26, 2009

Lending Club: Thumbs Up

I'm liking Lending Club thus far. If you've been reading my blog for a while, you already know that I was pretty happy over at Prosper lending out money at good rates to borrowers, but then Propser went into a quiet period and I was left with no where to lend my money... or so I thought. Then I found Lending Club. I have $250 out right now at an average rate of 11% - which is way better than what the stock market is doing.

One thing I haven't focused on much is how great these P2P lending sites are for people who need to borrow cash. Apparently it's near impossible to get a loan these days, even if you have good credit. And even if you do get a loan, the rates suck. If I needed cash, I'd definitely look into borrowing through Lending Club. Actually, as a borrower I don't see a reason not to borrow through lending club if you have a decent credit rating. The risk in Lending Club comes from the lender, not the borrower. Just pay back the money on time and it's a good deal all around.

The latest deal I read about for those with good credit? Personal Loans at rates as low as 7.88%. Borrow up to $25,000.

Have any of you used Lending Club as a borrower? What have your experiences been?


Feb 24, 2009

5 Free Food Offers in the Bad Economy

My sister apparently got detention with 3/4ths of her senior class for coming to school late today to get free pancakes at iHop. While that deal's offer, you can still take advantage of the free food deals popping up at restaurants and fast food joints across the country.

Some are country wide offers and others are local, here are 10 free food offers across the US to take advantage of during this nasty recession.

1. Free Sub -- USA

Get a free sub from Quiznos; all you have do to is sign up for their mailing list and print a coupon.

See: Quiznos(R) to Give Away One Million Subs on MillionSubs.com

2. Lunch for Layoffs -- Alabama

Recently got laid off? Hungry? All you have to do to qualify is bring with you proof that you were recently laid off and you'll be provided with a free lunch at Dothan restaurant in Alabama. Nick Nitkowski, owner of D'Monico's said, "We are going to make sure they get a good hot meal, something to drink, bread and pats on the back and to let them know things will be better in the near future." Domonico's serves lunch from 11 am until 4 pm, Monday through Friday.

3. Economic Stimulus Package - California, Iowa, and Other Locales

Salt Creek Grille - Dana Point's premiere dining destination - has created the Salt Creek Grille Economic Stimulus Package - a bailout plan that offers a random free meal to unsuspecting customers, a reduced-price award-winning Sunday brunch and special discounts during the week. In Iowa, Islamorada Fish Co.'s restaurant owner has a similar "surprise free meal" plan to lure in customers.

4. Free Buffet - New York

Union Restaurant and Bar Latino in Haverstraw, New York, will open their doors to serve complimentary buffet meals from Monday to Wednesday. Owners of Union Restaurant and Bar Latino, David Martinez and Paulo Feteira, said they decided to hold the event to welcome those who can't afford to dine in a nice restaurant because of the current financial crisis.

5. Free Spaghetti - USA

Fazoli's, known for fast, fresh Italian food, kicks off its 20th anniversary celebration today with a feast of special offers, including a continuation of its popular free spaghetti promotion and nearly a dozen delectable new menu items, all of which are now baked fresh to order.


The Recession Will Make "U.S." Stronger

Poor President Obama. He's inherited a political and economic nightmare. Today he did his best to reassure America that our current struggles will make us stronger in the long run, all while making sure not to get our hopes up.

Reuters reports that "the politician whose memoir was called "The Audacity of Hope" and who won the White House in last November's election amid chants of "yes, we can" was also back in stride, telling recession-weary Americans they can expect better days ahead."

I can't say I have that much faith in the U.S. economy. While we have recovered from various recessions and even a "great depression" in the past, what has pulled us out of those downturns cannot be replicated. It's looking like what we really need to get us out of this mess is World War III - and that's not something I'm going to hope for.

Everyone predicts that some day the market will recover. It always seems to. But this time - are things different? Are we in a perfect storm that we can't see? Are we putting a trillion dollar band-aid on a wound that needs to air out in order to heal?

What do you think?


Feb 21, 2009

The Housing Bailout: Responding to a Reader Comment

I always appreciate thoughtful reader feedback, and always enjoy reading what you guys think about what I have to say. Reader Rachel Elizabeth, who noted that she works in real estate, left a comment about my last post on the housing bailout.

She writes... "not all of the people that are being "bailed out" are people that bought houses that they couldn't afford."

Some of her friends, who are also realtors, were making good money back when the market was up, but with the housing market crash they just don't have enough money to pay their own mortgages. Also, she points out that there are a lot of people who were able to pay a 20% downpayment and then later got laid off or reduced hours and are in trouble and in need of bailout help. She also points out that the government is offering a $8000 tax credit for first-time home buyers.

I can't say those people don't deserve a bailout. To be 100% honest I'm bitter because in the Bay Area, $8000 is pocket change when it comes to affording a house. You're supposed to buy a house that's 3 times your yearly income. Granted, I'm 25, and my income hopefully will increase over the years. But I make pretty good money now (and I'm grateful for that) and even with the housing crash, there is no way I could afford a house here. The cheapest 2br condos in the area go for $600,000. Following the income rule, I'd need to be making $200k a year just to afford that. At my $60k salary, I really should only buy a condo/house worth $180k. You can't get anything for that around here, except maybe a closet.

My good friend in NJ recently bought a house with her fiance because she felt she needed to own a house right away to be all grown up and successful. Then, she got laid off, and even though her fiance has a good job they're struggling with payments. And their house is much less expensive (for its size) than a comparable purchase in the Bay Area. They paid $400k for something that would easily be $1.5M around here, give or take a few thousand.

I've kind of accepted that I will have to rent for the rest of my life. I just will never be able to afford to own. I grew up with the idea in my head that if I couldn't afford a house, I was a failure. These days, it's not just the American dream, it's the American necessity. But I'm trying to get over thinking that -- you can be a success and live the American dream and rent for the rest of your life. Can't you?


Feb 20, 2009

The Housing Bailout: It's unfair, it's necessary, it's ridiculous

They say a housing bailout is necessary. For all the people who purchased homes they couldn't afford at to-good-to-be-true rates, here's your bailout. I'm generally a liberal but this is going too far.

The problem stems from how the American dream is so closely linked to owning a house. If you can't afford a house - don't buy one. Renting is not the end of the world. It's a lot cheaper. Wait until you can afford a reasonable 30-year fixed mortgage to buy a house. That's what I plan to do.

Of course, given that the government is going to bail everyone out who can't afford their poor choices, it seems I may have been better off buying a condo years ago. I could be facing foreclosure now, with my home underwater. I could be begging the government to bail me out.

I understand that when you have children the situation changes a bit. You want stability, a house that you'll own, and not have to worry about moving if your landlord decides to kick you out. Ok, I get it. I feel for you if that's the situation you're in. But I still think that when it comes down to it, Americans need to be responsible for their own actions.

God, I sound like a Republican.


6.01% APY on your Checking Account! Wait, it is too good to be true.

So... this seemed too good to be true. I just found out, it is. The offer is only available for people who live in the bank's county in Illinois. So much for 6% APY. There's nothing like that around here!

I was listening to my favorite talk radio program - The Ray Lucia Show - yesterday, and a guy called in to ask about a 5% APY checking account he saw advertised on the Internet. He wanted to know if it's legit.

Since I haven't seen any set APY rates of 5% since three years ago, when I saw those rates on a CD, I was intrigued. The "Brain Trust" team at the radio station did a little research and found out that, indeed, this offer was through an FDIC insured bank and it was legit. Of course there was a catch - you have to 1, have direct deposit and 2, use your debit card at least 10 times per month/billing cycle.

That left me with the question - what happens if you don't. So I did some research online and found that many smaller banks are offering up these high interest checking accounts to lure in new customers. Smart for them.

I just opened a 6.01% APY (!!!) checking account with First Robinson Savings Bank. Read through the fine print, and so far it seems pretty straight forward. The rewards are only on cash under $25,000 -- but that's ok, I'm not ready to save more than $25,000 in a checking account anyway. You do need direct deposit (I'll have to get my work account to switch over from my Bank of America - thank goodness I'm now a full time employee!), and you do need to make 10 transactions a month (I could buy gum ten times and that'd be fine.)

Some other banks are offering similar rates, more in the 5% range...

Union State Bank is offering 5.01% APY with similar rules and AmericaNet is offering 5.25% APY.

I'll admit, I'm a little nervous opening up a bank account at a small bank in some random Midwestern state (not that I have anything against the midwest!) but these rates might not be too good to be true, just too good to pass up.

Given that my Chase Freedom card rewards are about $20 a month, on month's I spend a lot, I figure I could probably make a similar amount in this checking account and not risk forgetting to pay my bills on time and getting hit with late fees.

From the fine print, it looks like if you fail to make your 10 transactions per month you just get only .25% apy for that month - so basically, you don't get any interest. But you can start over the next month.

Considering I barely ever use cash, my debit cards always get a lot of action. This sounds like a good way to earn at a good rate while also starting to exit Bank of America. Right now I have a checking account, savings account, and CD at BoA. If this 6.01% rate turns out to be legit, I'll move my CD over there once it expires, and possibly move the cash I've been saving at ING there too -- since it's only earning like, 2%.

Have any of you opened up / used one of these high interest checking accounts before? Any horror stories I or my readers should be aware of?


Feb 9, 2009

Lending Club: My 2009 Money Challenge

Each year, I like to try something new in personal finance. I don't want to waste money, but I don't mind testing the waters a bit with a small percentage of my income. Last year, my big test was on Sharebuilder... and my stocks obviously have not performed well (except Mickey D's (MCD) that's at least not losing money).

This year, I've decided it's Lending Club's turn for a little game time. I finally figured out how to use the site (phew) as last I was on I thought I had bid on two loans and apparently never made a final order. Oops. So I've now made a final bid/order on two loans for $25 each and I transferred in $200 from my paypal account.

While I don't think Lending Club will make me rich (and I have little faith I'll do better than break even given my luck on Prosper), I do like that you can lend just $25 per person. So you have a little more room for less costly defaults. Of course, then you also have more loans to default. I'm not mathematician, so I'm not sure which is better.

Regardless, I'll start out with this $250 and see where it gets me. I'm also going to up my investing on Sharebuilder this year. I can't resist a good sale. Thinking about purchasing some Proctor & Gamble stock, but not sure. Any stock I buy now will lose money over the coming year or two, it's just a matter of how it looks in 3, 4, 5 years down the line.

At least with Lending Club I'll either get my money back in 3 years or lose it in 3 years. With the stock market... I could make money and it could be gone in 10 years... as we've seen in the last 10 years. And I don't really have much faith in banks or the ability of anyone - even Obama - to stimulate the economy. Of course, without such stimulation, even P2P lending is at risk - big risk. If jobs get cut people can't pay their bills, even if they really want to. That's just how it goes. So I don't want to put too much money into P2P... just enough to see if Lending Club is better/worse than Prosper.


Feb 8, 2009

Times are hard -- have some napkins

I visited my aunt, uncle and cousins for a birthday party yesterday. They live in a very nice area in a relatively nice house for said very nice area, and, while they're probably among the poorest in said area, they still are somewhere in the upper middle class, lower upper class. (I'm not really sure where that cut off is). Regardless, they've been living a comfy life until the recession hit.

Now, times are hard. Well, they aren't that hard, but hard in the sense that their mortgage is a fortune and to keep up with the quality of life they're used to living, and fit in with their neighbors, it costs a lot. My uncle runs his own business and his clients have been drastically cutting back. Once you get used to living a certain lifestyle, it's hard to reduce your spending. I'm almost hoping to never let myself make that much money - because I think it would just get out of hand.

Then again, I think about having children, and the kind of life I want my children to have. I was very fortunate to grow up in a house where we could afford luxuries like summer camp, art lessons, etc. I don't mind being frugal when it comes to clothes and things, but the extracurriculars add up. I want to have a decent income to spend on my children, if I have children, and looking at my aunt and uncle who are struggling on their current salary cuts (even though jointly they still make well into the 6 figures), I wonder what sort of salary I'd have to make to be able to give my hypothetical kids a life at least comparable to the one I had as a child.


Feb 6, 2009

Friends in High Classes

My ex is an attorney with a 6-figure salary and a cushy job in the city. He's also one of the most frugal people I know. Go figure.

He IM'd me this evening to say "it was a sad day." I figured some girl blew him off again. Instead, this time, it was potential layoffs at the office. Well, he was sad about a new pay structure at the office... no more bonuses.

A part of me gets really ticked off every time he complains about money because he's making, like, $150k a year. On the other hand, I'm making $60k a year and I still remember a time when I was making $20k and thought $60k was "rich." I complain about not making enough money too... so I really have no right to be upset with him. While I do feel like I can live comfortably at $60k, it no longer seems "rich" to me at all.

I'm still trying to understand what "rich" means. My greatest desire in life is the ability to donate my money to different causes and people who deserve it. And... realistically, I could do that now... yet I also haven't donated one penny in years. I'm an awful person. Or at least a guilty one. I used to try to volunteer my time, but that was back when my time wasn't worth that much money. Now... my time is worth a fair amount of dough, and my free time is worth even more.

My biggest money question is life is when do you reach the point where you can donate money and feel good about it without worrying that you're pushing off an opportunity to own real estate, go to grad school (etc)? All the extra money... I put into savings accounts or retirement accounts. I'd like to one day make "enough money" where I can donate a sizable amount to non-profit(s) I care about. There are lots.

I'm always intrigued by the person who can't walk by a homeless man or woman on the street without giving them cash, or, even better, a meal. I'm awed. I grew up in the 'burbs of NY. My parents taught me to look the other way.

These days, I don't know which way to look. I just feel so guilty for having such great luck (as in, having a job right now, not having student loans, etc) and so terrified of running out of money one day and going into debt. Money totally controls my life. I like having it (who doesn't?) but I can't stand not knowing what to do with it... and feeling like I don't deserve it. That's probably why I have a spending problem... I always want to get rid of it as soon as possible.


Feb 5, 2009

Layoffs Hit High Tech; Professional Dominatrixs on the Rise?

Even though the tech sector is still doing better than some other industries in the U.S., it's not immune to the current economic mess. As more companies report layoffs, demand for high-tech professionals is beginning to slide downward, according to statistics released this week.

Global outplacement consultancy Challenger, Gray & Christmas Wednesday released job cut totals for January, which prove the year-end trend to slash positions as a cost-cutting measure will continue into 2009. According to the firm, the number of planned job losses announced in January reached 241,749, which represents a 45% increase over December 2008 totals and 222% higher than the 74,986 cuts announced at the beginning of 2008, writes Network World.

Apparently with the layoffs comes an interesting career change for some women in high tech. The Daily Beast writer Tracy Quan reports on what becomes of Silicon Valley's finest post job loss. That is, women in tech, sans jobs, freelance in the - legal - sex industry to get by. As they say, when the going gets tough, the tough bring out whips and chains and scream "who's your mommy?"

Ok, they don't say that... but they might as well. "With staff jobs evaporating and former nine-to-fivers cobbling together incomes through scattered side projects, freelancing as a dominatrix -- or "pro-domme," as industry types prefer to call it -- has become a plausible gig option."

The pay is pretty good, and it beats being unemployed. The article refers to Jessica, a pro-domme in her late twenties, who apprenticed at a dungeon before striking out on her own. In Manhattan dungeons, she said, the typical cut on a $200 session is 60-40 in the dungeon's favor. So that's $80 an hour. Four times what I'm making working a legit marketing job in high tech.

Still, I can't quite bring myself to freelance in a dungeon. It's not that I couldn't yell at men and tell them worship me... it's just, I'd be terrified of someone I know, professionally or personally, finding out - or worse - meeting me with their testicles tied in a knot in my dungeon. Yea, that would be weird.

Would you ever consider legal sex work if you needed the cash, or have you ever done any of this kind of work? I've always been interested in working as a phone sex operator... seems like a pretty easy job. But I doubt the money is all that good, especially these days where everyone has the Internet.


Roth IRA: Just Maxed Out 2008, down $5000

Today, I put the last $300 into my Roth IRA for 2008. It feels rewarding to know that I'm saving for my future, yet the $5000 in losses to my Vanguard Portfolio due to current economic conditions isn't exactly a fun "reward" to look at in my accounts.

Still, I'm investing with the hope... and faith... that the economy will recover again. I think it will, eventually, but it's going to take a while. Had I followed my faith a year ago that the stock market was going to keep tanking, I would have possibly shorted some stocks and cold have been much better off now... but I don't have time, or the heart, to deal with such "high risk" behavior. Instead, I put my money in the stock market, knowing it's going to tank now, hoping it will rise in the future.

The question I have now is when do I invest in my Roth for 2009? Usually I put a large chunk of money in up front (money left over from taxes). By "usually" I mean over the last two years, since that's how long the account has been open. I like to just get it out-of-sight, out-of-mind before I start thinking of myself as wealthy enough for luxuries. The stock market seems pretty bad right now, so I'm not too worried about adding another few thousand once I get my tax return back. Still, this all begs the question whether I should spread out my investments ($440 a month) or put a bunch in up front and finish up over the later half of the year (like I've been doing.) Dollar cost averaging is always the recommended way to go... but, eh, when the market is this down, maybe it doesn't matter as much?

Also, as far as retirement savings go, I decided to do the HSA for my healthcare. In addition to my company putting $100 in the account per month, I'll be putting $100 in. So that'll be $2400/year for healthcare *or* retirement. I'm just worried my frugal save-for-retirement self will avoid doctors in order to save for my retirement, and I'll end up killing myself slowly in the meantime. (Not that I ever go to doctors, even when I have full insurance, I'm too lazy and busy). In any case, the savings rate for the HSA is so sucky - 2.1 or something - and w/ the taxes in California taken out of that it isn't a huge savings. But I'm going to look at it as a traditional IRA that's being overtaxed by my bankrupt state. One that I can dip into if I need to go to the doctor for antibiotics every once in a while.

The HSA does have the option to invest with Ameritrade, so I'm probably going to look into setting that up soon. I won't put all the money in stocks, but I'd like to diversify my retirement portfolio outside of Vanguard and I do want to get some Gold/Silver ETFs in it... since they don't get taxed at the ridiculous collection tax rate if they're in an IRA. Well, I don't know how that works in an HSA... esp since it doesn't get taxed federally but it does get taxed in CA. Hmm.


Feb 4, 2009

Mint.com and My Year-Over-Year Progress

I'm the first to admit that I fail when it comes to acing the test on smart shopper and saver. Over the past two years I've grown wiser and more careful with my purchases, but I'll splurge more often than not.

That's why it's especially rewarding to use the Mint.com trends tool to compare my spending habits month and, even more importantly, year to year.

Using the tends tool, I can easily see how much I spent in any 12 month period.

From June 2007 to June 2008, I spent $37,455. That was when I was making about $35k for the whole year, mind you.

In the past 12 months, from Jan of 2008 to the end of Jan of 2009, I've spent $30,523. My income has gone up and my spending has dropped over $7k. I am very proud of this and hope I can continue on my not-so-frugal living within my means path.

Looking at 2008, I spent $29,916 total. The biggest expense over this year was "home," with $10,553 going to rent and moving expenses.

2008 Spending Chart

Home: $10,553
($879 a month)

Shopping: $4,633
($386 a month)

Food: $2,734
($228 a mont)

Auto/Gas: $2,211
($184 a month)

Entertainment: $1,969
($164 a month)

Bills: $1,737
($144.75 a month)

Gifts: $331
($27 a month)

Business Services(?): $399
($33 a month)

Education: $560
($46 a month)

Travel: $1269
($106 a month)

Health & Fitness: $1,660
($138 a month)

Fees: $238
($20 a month)

Uncategorized: $1,048


$1k Car Repairs and a Broken Radio

My car started having "issues" a few months ago. In the mornings, sometimes it wouldn't want to turn on. I'd try a few times, hold my breath, and eventually it would work.

But then the other day it just - kaput - gave out. It was time to get it towed to a repair shop and see what was wrong, and just how much it would cost me.

So my insurance company sent out a tow truck, and the guy jump started my car so I could drive it to the auto repair shop I read about on Yelp that was beyond the "free towing" distance. I drove it there, safely, and found out that the inspection would be $100 just to find out what's wrong.

I agreed to that (it seems normal) and got a call a few hours later letting me know that... I needed new back breaks ($$), I should get a 150k checkup ($$) and I probably needed a new starter ($$$$) and my battery chords were all messed up so they had to get replaced too ($$). The total price came to $1018 to fix/check out my car.

I can't help wondering if I got ripped off. I know it costs a lot to repair cars, and my car wasn't starting, but that's a lot of money. Still, I think it was worth it for my car. The guy said the engine and battery look good and should last me.

The only thing I'm pissed about is that when I got my car back my radio was broken. So, it was kind of on the fritz before, but it had been working no problem. Now it won't turn on. I haven't gone back to ask about that because I'm sure he'll say that he didn't even touch the radio - but really, it's not turning on, at all. I don't really want to pay to get that fixed too!


Lending Club: First Impressions Part III

So it's been a couple of days since I signed up for lending club, and put in my bid for two notes. The problem I'm having is that I can't seem to find where those bids live in this stage prior to funding the loan. I can search for new notes, and I see that I still have $50 in my account that hasn't been used - but I know I have two bids waiting to go through. I want to check the status on them, but can't find them. Do any of you know where I can do this on LendingClub.com?


Feb 3, 2009

Feeling a Little Overwhelmed

My life is a rollercoaster of ups and downs. It's been on the up lately, which, is really good. But every so often I slip into a down, and it's tough to keep myself on that much-needed upward trend.

When I'm most successful, I always make mistakes. Now, I guess in some respect mistakes are natural. No one is perfect. But I'm talking about stupid mistakes. I can solve the hardest problem and mess up the easy stuff. Maybe it's my ADD. Maybe I'll just never be good with the details.

And that is what depresses me so much. I can work my ass off, I can really, really care, and still, in the end, it probably looks like I've been lazy or didn't care at all. Which is extremely frustrating.

When there is all this news about job losses around the world, and esp. in the US, I feel so fortunate to have my job, yet at the same time totally terrified about losing it, or worse, having my bosses be bitter for employing me when I'm causing more trouble than I'm worth.

I don't mean for this to be a bitch fest, but truth be told I'm feeling depressed right now and I can't kick the feeling. I'm happier than I've ever been thus far in my life and I'm still stuck in a wee bit of self hatred. How can I get over it? How can I stop making mistakes? That really is the only thing that will allow me to stay happy. Ugh.