Have you ever thought that you understood why people do certain things, only to figure out the opposite is true? I thought I had finances figured out. I used to think that I understood why people used short term loans. Yet, after reading a New York Times article, I have come to change my perspective. People don’t use this kind of quick loans for the reasons that I once thought that they did. Many people often scoff at the first mention of them as people who prey on others’ unfortunate situations. I’m not sure that’s the situation.
Educational loans and student loans are thought to be the next big bubble that explodes in the economy. Many students are worried about their student loans, and many are not familiar with the terms and conditions. These student loans are to be repaid by the students themselves one day. So having less debt from the get go is always helpful.
Are you looking to start your own business? While the initial stage may be exciting when starting out on a journey like this, it is often the most challenging period for a small business owner. Not only are you tasked with creating the system or systems in order to increase later efficiency, you are also forced to come up with the funds to run the business. Every business needs money – it’s just a matter of how you are going to acquire the money.
After posting my Lending Club investment strategy and returns for over a year now, I thought today was as good as any to post a quick summary and track my net annual return volatility. Summary Outperforming Lending Club’s benchmark index of 9.7% by ~4.5%. Loan payments generate ~$250/month of cash for reinvestment. Defaults: 2 loans [...]
I’m a great believer in luck, and I find the harder I work, the more I have of it. – Thomas Jefferson. Like all things in life, if you’re willing to roll up your sleeves and do a little bit of work, the chances of something good happening are in your favor. It doesn’t happen [...]
One of the upsides to having insomnia is you watch all sorts of things you wouldn’t ordinarily watch. Case in point, this humorous quote from an old James Cagney flick One Two Three filmed during the Cold War which couldn’t have sarcastically summed up the Achilles Heel of capitalism and forecasted the financial crisis any [...]
So you think 30 year fixed mortgage rates over 5% is a bad thing? You think an interest rate above 4.99% has some sort of mystical, psychological barrier to entry? How does 10% sound? What about 18.5%? So quit your cryin’… we all knew 30 year mortgage rates in the 4% ballpark couldn’t last forever. [...]
They say you always remember your first more than the others… So yes, after 1 1/2 to 2 years as a Lending Club investor, I finally got hit with my first default where a small $24 loss took my pretty little 15.64% NAR out behind the woodshed to a tune of 0.86%. A 14.78% NAR [...]
I speak quite a bit about the dark side of investor “confidence”, and no where is there a better example on the fallout from manipulating investor psychology than the latest Vanity Fair piece by Michael Lewis on the Irish financial crisis. The endless flow of cheap foreign money had teased a new trait out of [...]
One static component of my constantly evolving Lending Club investment strategy is identifying borrowers who have a fairly long history of employment. In other words, that means: the older the better (but not at or beyond retirement age). 10 years plus with a single employer. decades of experience often imply management material. As the above [...]
Some time ago, I mentioned that P2P lending investors should no longer believe that a peer to peer lending loan to federal or state government employee is a “sure thing” or that government employees can never be laid off. Since then, lots of supporting evidence has manifested. Not only from state governments eying bankruptcy court [...]
In an older post that made the rounds with the entrepreneurial and innovation crowd, I touched upon the idea that the Internet is making middlemen obsolete. This isn’t a novel concept, but if you’re in a business where you’re acting as an intermediary – a centralized position where you purposely keep your customers away from [...]