Lending Club announced today a new self-directed IRA product.
This is great news for folks like myself who are both self-employed and fans of P2P lending.
If you want to start an account for the 2008 tax year, you need to be enrolled and have funded your account by April 15th. The account goes by “real postal mail” not electronically, so hop to your research right away.
You can read more at the article I posted to Prosper Lending Review, where I’m a guest writer.
Hello folks!
If you’re visiting here for the first time, or a regular reader, I would encourage you (especially if you’re an email or RSS reader) to visit the site, and take a look at our growing blogroll. I’ve added a new site today (Financial Nut). I’ve chosen all sites listed in the blogroll either because of their excellent quality, or their similarity in interests (personal finance for young families).
Thanks again for visiting.
I’m going to invest a little more money in Lending Club. If you’ve got a loan in funding, please tell me about it–I’ll consider it as I select one.
As I was taking a look at my Lending Club account, I realized I’d made a big mistake in my understanding of the process. In my Mint.com account where I usually view my account I can see the $1.27 of interest that I’ve earned in the past month on my $100 investment and I’ve been feeling pretty good about that. What I didn’t realize is that I have an additional $3.87 in the account as cash that doesn’t show in my summary. This $3.87 is an additional principal amount that has been repaid by my four borrowers. This means I’m almost four dollars ahead of where I thought! I realize this isn’t much, but considering how small my investment was, and how short the term has been, I’m impressed. All my loans remain current. My husband today congratulated me on taking the plunge to try something new, even though he’s not usually big on trying new things, especially with money.
Thanks also for those of you who’ve visited my advertisers–I’ve had some ad revenue come in lately and as I’ve mentioned before, all my ad revenue gets “debt snowballed” towards the balance of our adoption debt from adopting our last precious daughter.
Today Rob and I checked out SmartHippo.com again and decided how to approach our refinancing project. We had our first mortgage, as well as a home equity loan of $15,000. Our first mortgage was at something like 5.5% and the HELOC at 8%. We were able to refinance both into 4.5% with our regular bank, paying one point into a 15 year loan and keep our payment very close to our existing fixed 30 year loan. We’re also going to enroll in the mortgage accelerator to pay it off faster. This is exciting! We’ll be making real headway with every payment towards being debt-free. We spoke to a number of banks today about the subject and all were shocked that we were OK with a higher payment, and that we wanted a 15 year fixed, instead of rolling our 30 year loan (now in year 5) into another 30–and extending our term by another 5 idiotic years. (Dave Ramsey calls this the “stupid tax,” meaning the premium one pays for making dumb financial choices).
Our house won’t be underwater, and we’ll still have plenty of equity. Also, we’ll be building equity like crazy, with more than half of our monthly payment landing in equity–not interest.
One surprise in this process was that so many of the companies we talked to wouldn’t recommend their mortgage accelerator program–because it was administered by another company and you had to pay a fee to enroll, essentialy the other company works like a payday lender and loans the mortgage the difference between the two payments. We searched out the right accelerator program with the same zeal that we searched out interest rates.
Another interesting surprise was that because of our recent debt-busting efforts (two credit cards and two vehicles and an adoption loan paid off) we were able to qualify for our refinance based ONLY on my husabnd’s income. This we’re told was because of our excellent credit scores and our low debt-to-income ratio. The mortgage consultant said adding the verification process of my self-employment income wouldn’t get us a lower rate as we already qualified for the lowest available rate. Saves us a lot of headache, and provides a lot of peace of mind.
I’m not a big fan of talk radio (I find it too stressful). But I do like to listen on certian subjects, especially when the host is positive. I’ve found Dave Ramsey for free on iTunes and I’ve subscribed. It’s just one hour of his three-hour show, but it’s very educational and informative. My favorite part of the Dave Ramsey show is when people call up to scream “I’m Debt Free” when they pay off their debts (including their mortgage). It makes my day to hear people do their debt free scream. He also has some really funny expressions like “as long as you’re on this cabbbage truck, you might as well ride it” and “it’s time to paint or get off the ladder.”
Also, I’m subscribing to the Daily Audio Bible on iTunes, which is a “read the Bible in a year” kind of program. I’ve found them both great to listen to as I wash the dishes and do fold the wash in the evening.
Yesterday mortgage rates dropped dramatically!! I posted earlier about www.SmartHippo.com, and went back and checked my rates. I could get a rate now more than a whole point lower than my current payment switching into a 20 year fixed rate. This would cut my monthly payment almost in half, and help me pay off the house a full five years sooner. Wow! I’m going to SmartHippo today to start a re-fi!
I’m an investor at Lending Club. I started out putting in just $100 because a friend suggested I try it. Now I think I’ll be contributing more frequently. You see, despite my broker’s best efforts (I am not loosing money in the market right now), my lending club is earning 10.98% while my IRA is falling substantially short. (Though not negative–a special thank you shout-out to Dean S. at Edward Jones!).
Lending Club is a peer to peer lending platform, where investors like me can put out little loans to others (lots of little loans from investors makes one large loan to a borrower). I’ve bought four loans at $25 each, and they’re doing quite well. I earn interest on them every day and it’s fun to take a look at the interest accruing. I’m just one month in to my investment and I’ve already earned $1.18. More principal payments are due in the next week or two, so I should be getting a little more income this way. I’m helping someone else out (I think all of the loans I purchased are debt-consolidation loans), and I’m making a little residual income.
It’s fun to browse through the borrowers and choose the person you’re willing to fund (you can ask questions if you want to know exactly how they’re planning to pay you back!). Remember, these are loans, just like if you were to spot me a $20 for lunch. There’s always the risk that the borrower won’t repay, but unlike loaning a friend a few bucks for lunch, Lending Club has an excellent debt-collection team, so you can be assured they’ll track your borrowers down for you. Also, they’re invested in their loans too–so A: they think it’s a good investment and B: They’re on the hook as much as you if the loan goes sour.
In a further vote of confidence, Lending Club announced this morning that they’ve just received their 2nd round of VC funding, which is great news! They’ve just received another $12million in capital to keep up their growth.
Here’s a cute video about how it works:
Wow. Here’s an article from my local news station about families getting really frugal and ::gasp:: doing their own house cleaning and lawn mowing.
Making the article even more comical, the subject is a stay-at-home mom who ditched her maid service, and stopped sending her husbands’ shirts to the cleaners. They now also do their own lawncare. The family has even started preparing their own meals. Seriously? What was she doing before? I’m a work at home mom (running a business and writing career from home) but I also do the housecleaning and cooking (with my husband’s help, of course). If I didn’t have the chores to do and my job I’m not sure what I’d do all day.
I don’t know about you, but my kids wouldn’t even want that much “quality time” with mom! Ha ha!
For those of us who are really trying to be frugal, this is a comical no-brainer.
In my “pennywise” search I’ve really gotten into the nitty-gritty of cooking in a thifty manner. However, I don’t feel like this is the place for it. As a result, I’ve partnered with my dear friend and frugal cooking mentor, Laura to create www.3rdworldfood.blogspot.com.
Laura is an adoptive mom like me, and has kids from several countries. To continue to teach her kids about their birth-cultures, Laura has become a master of ethnic cooking from Africa, India and Asia (yes, I know India is a part of Asia, but you’d never know if from the food, so I’m separating them for culinary purposes!).
My friend Laura has also discovered that foods from these cultures are very affordable and generally enjoyed by everyone in her very large family.
Don’t worry, Pennywise Family isn’t going anywhere. We’re just adding 3rdWorldFood as another place to go for cooking-specific info.
Thanks!