I just got back from my meeting with the IRS downtown.

I survived, and it wasn’t too harrowing of an experience.

The good news

The good news is that while a lien will be placed against my business (I knew this was coming), I should avoid one against me personally since the business plans to pay the amount owed.

The best news is that the payment plan will likely be around $600 a month. It’s a little higher than I was hoping, but I think I can swing it, I just have to super careful when it comes to cashflow and no extraneous business expenses.

The bad news

The bad news is that the final number is about $6000 higher than I was anticipating. I’ll have the exact number in a few weeks, but it looks like around $28,000 vs. the $22,000 I was expecting.

Overall

All in all, it wasn’t too bad meeting my IRS agent in person. It was a very businesslike meeting, but it didn’t feel like an inquisition by any means. I had to fill out a few forms, but nothing I didn’t feel comfortable with.

I’ll probably start making my first payments mid to late May. I received a number of comments/suggestions that I needed a lawyer to handle all of this. To be honest, so far I’m glad I haven’t got one. I’m not trying to hide anything. I don’t have a million bucks stashed somewhere (that would be nice!). I’m trying to pay it back through the business. A laywer at the meeting today would have been incredibly awkward. Maybe I’m naive, but so far the IRS has been the easiest creditor for me to work with.

I'm 300K in debt. Gulp. I'm 24 and day traded away a fortune. Now I'm trying to crawl back to zero. Why not subscribe to my RSS feed and join me on this journey. You can also subscribe via e-mail. I appreciate tips and feedback! ~ DebtKid

So, I should be receiving, like most American’s a $600 “Economic Stimulus” check in my bank account shortly.

This poses the question that many are asking:

What the heck should I do with my stimulus check?

Hey, that rhymed.

The main divisions for most people are going to be:

1. Spend it (on what?)

2. Save it (invest it or pay down debt)

3. Give it away (to whom?)

In my case I have an option for each of the above. I could easily spend the check. I could put it towards getting a new mattress, or some pots and pans I’ve been looking at, or do something totally non-practical like get the new ASUS that’s coming out mid-may (although work wise, it could be practical!)

I could also save the check. I could put it in my Emigrant Direct savings account, or invest it in stocks in my Sharebuilder account.

But, since I owe my mother a crapload of money, my check is likely going to pay her back. One (smart) reader once pointed out that I have my whole life to invest, but my mother does not. So, any “investing” I do should be paying down the $140K or so that I owe her. I like this option, and unless she refuses it or some super fantastic too good to pass up alternative pops up, it’s likely what I’ll be doing with the extra $600.

While I actually have the money right now for the mattress I want, I’m going to hold off. I need to earn this, you know? First, I want to save up at least for a few more weeks. And I also won’t purchase the mattress until my business hits some sales goals.

So, in the next few weeks, I need at least 20 new sales before I will purchase the mattress and frame.

Oh, and if you’re curious, that chart above is produced by the Simple Goal Chart Plugin that I’ve been working on the past few weeks. You’ll see more of the charts in the future as I move to using this plugin to display my current debt numbers and the like.

It’s my first Wordpress plugin, and I think it’s pretty handy!

I got tagged by BeingFrugal with the MEME about “when life gives you lemons….”

Well, you know the rest.

I’ll share a little about what it was like losing my house, and what I did to try and make the best of living in my office for two months:

My Lemonade Story (oh, I loved that Lemonade Stand game as a kid!)

I’m an optimist. Sometimes that’s a bad thing, like when I was *optimistic* that I could turn $50,000 into $1 million day trading currencies. That was some bad optimism. But sometimes it’s a good thing.

When my house sold (I did a short sale during the foreclosure process), I didn’t have a place to live. I didn’t have any money. What I did still have was a small office where I had been running my business the previous few years.

Choose your own adventure!

I decided the first night there that this was going to be an adventure (it was), and not a pity party. I slept on a camping pad, on the floor, and really tried to pretend I was in summer camp.

It worked.

I wasn’t miserable. I got a little buffer because I had to go to the gym each morning to shower. I tried to think of it as the dorm experience I never had in college. I had a little shower bag and I would walk to the gym before my employees showed up. I really made the situation into a game. I got caught once (an employee came in early), and I almost thought I was getting arrested once (the SPD is everywhere), but overall I tried to make the best of it.

I slept in my car some nights when I was too tired to make up my bed. And yeah, that wasn’t the most fun, but at least I had somewhere, you know? Many people don’t have an office, or even a car to sleep in each night. Plus, the whole living in my office thing is a pretty darn good entrepreneur story. It will just be allot funnier when I’m actually out of this mess!

I’ll tag: No Debt Plan

Debt is a four letter word

My Debt Blog

LIFE GAVE ME SOME LEMONS - IT’S OK, I MADE DELICIOUS LEMONADE - MEME Rules: * Copy and paste these rules to your blog post. * Link back to person who tagged you. * Write about an incident in your life you first thought was really bad, but ended up being a blessing. * Tag six random people at the end of your post by linking to their blogs. * Let each person you tagged know they have been tagged by leaving a comment on their blog. (* And if you want to - link back to this original Lemonade Meme post too.)

end official rules stuff

After living in my office for two months last year, sleeping on a camping pad, I was pretty stoked about getting a real bed in a real apartment late last summer. I picked up a cheap used mattress off craigslist for $30. It was like heaven….except for the fact it’s just a twin (72″ long) and I’m a hair over 72″ tall. Not exactly the best combo, but hey, I’m broke and it was better than the office floor.

Well, It’s been 8 months now, and I don’t think I’ve had more than a night or two of good sleep on that piece of junk mattress!

My beef with the $30 mattress

The main issue is that it’s just too small. I have to curl up slightly unnaturally, or prop my pillows awkwardly against the wall so that my feet don’t hang over (I can’t sleep without my feet supported. Maybe it’s just me).

The secondary issue is that it’s just a really crappy mattress. I never feel refreshed, even when I get a good 10 hours!

Mattress An “Investment”? phhhhpt….

So, this begs the question. Should I look for another mattress? Can a mattress really be considered an “investment”? I had a friend that “invested in” a tempurpedic mattress. I almost wet my pants when he said invested.

Sure you can “invest” in lots of things: relationships, non-profits, your dog. etc etc.

But a mattress? Really? I don’t know, maybe it’s just me, but I like “investments” that throw off cash. You know, money in the bank stuff.

Dad says go for it

I talked to my Dad about this actually and he seemed to learn towards me getting one. Bear in mind, this would all be my personal money. It would require me not to save any money this month, and maybe next month. I would still of course be sending my payments to my mother.

I can totally keep gutting it out with my current mattress. I’ve done it for 8 months, I can go a little longer. I’m just curious if “investing” (oh my gosh, I’m such a hypocrite) in a better mattress might be a good idea.

This would easily be the largest purchase I will have made (personally) since moving out of my office. I’m not taking it lightly. I looked at a SEALY $349 Full Extra Long (yes, they do apparently make full extra longs). What I’d really love to have though is this Queen Foam Mattress from Costco:

That one is on sale for $549. I actually used to have this mattress in my old house. I absolutely LOVED it. I had to sell it on craigslist for less than half that. : ( It’s actually one thing I sold that I actually miss.

What do you all think? Go for it? Can a mattress be an investment? Will I be 100% more productive? I’m so confused!

1. A blog gets you into the coolest clique ever: other bloggers

I’ve met a wonderful group of people within the personal finance blogging community. I would say as a whole, most bloggers (especially finance bloggers) are genuinely caring and fascinating people. I hope to one day meet more bloggers offline, that I have come to know and respect online.

2. A blog is like a (Harry Potter nerd alert!) Pensieve

My memory isn’t the best and no one can remember everything….but a blog can! I can look back a year ago and be shocked at events that I had forgotten about. How cool is that? A blog keeps pictures, comments, thoughts, tips, and more for all of eternity (assuming you backup regularly of course!). Very cool

3. The “made my day” comments

I can’t tell the you the number of times that someone has left a comment here that just totally made my day. While occasionally I’ll get comments that just piss me off, for the most part, my readers are very helpful and supportive, and I love them for it!

4. Blogging opens up new doors

I would have never landing a writing gig at Lending Club if it wasn’t for my blog. I also never would have won $1,000 at DebtCC if it wasn’t for this little blog of mine. Every reader you have is a wealth of knowledge and potential friend or business partner.

5. Blogging keeps you sane

While some might argue that blogging makes you a little more insane, I would content the opposite. Blogging allows you to write down what sometimes are jumbled thoughts. I often don’t know exactly what I am thinking until I type out the thought on my blog. Writing is good for the soul, keeps your mind sharp, and a blog provides somewhat instant feedback.

6. Blogging makes you $

OK, well, not a ton of money. But if you have decent traffic numbers you can actually earn a nice little extra income blogging. For me it’s much more about #5 (keeping sane), and the accountability I have here, but a little extra dough is a nice reward for creating interesting content.

7. Blogging gets you ladies

OK, so that one is a complete lie. But I can dream, right?

The past few weeks, I’ve experienced true, actual loneliness.

I know I’ve written about this before, but it was always at a pretty manageable level, until this week. My one close friend has been dealing with her own issues of late, and I was starting to think that our relationship wasn’t that important to her anymore. My employees worked this week, but one even made a comment about how I could “always buy friends”….it kind of stung. He immediately apologized, and he really didn’t mean anything by it, but it still hurt.

So after a few days of feeling sorry for myself, I decided to take some action. I organized a pizza party game night this weekend with my close friend and two others that I’ve been getting to know lately. It’s probably the first just random thing I’ve organized in ages. I’ve always been blessed with friends who did the organizing…not so anymore.

The today, I setup a coffee date to just talk about things with my close friend. A few hours later, and now I’m feeling much better about the whole situation. It’s still not great, but it’s at least bearable now and I hope a few of the concerns I brought up will show up in some different actions going forward.

Being in debt can be a really lonely place. Especially if you have no one to talk with.

Being a small business owner can be a really lonely place to be, especially when none of your peers can relate to how different it is working for yourself. I’ve also discovered that while I enjoy working from home, it’s a negative factor in both of the above issues.

The good news is that I think I’ve hit the low here and I can see things getting better, especially with summer around the corner. I also think I’m getting closer to a point where I may let on a little more of my situation to a few of the new people I’ve met lately. I still wish I could tell my story in hindsight, but I don’t know when that day is going to come, so I can’t keep living my life hoping it will be sooner vs. later.

On that note….I also talked to the girl that I’m kind of interested in again! It went pretty well…she at least knows I exist. And it’s getting easier to approach her each time…we’ll see : )

So my tips (and guide for myself) on dealing with debt and loneliness:

• Commit to being proactive - Call up people. Organize things. The worst they can say is their busy, it doesn’t mean they don’t like you
• Work out - I don’t think I’d be sane today if I wasn’t able to work out. It keep me sane, and I know it helps me feel better about everything
• Joke about it - While my situation isn’t anything to laugh about…you know what. Sometimes it is. I’ve been able to laugh at myself a few times with my brother recently, and I think once you can genuinely laugh about a mistake you’ve made, it has less power over you.
• change the scenery - for me this means working once or twice a week at a coffee shop. It may cost a few bucks, but the increase in productivity and just social stimulus is more than worth it

Anyone else with tips on dealing with loneliness? I know it’s not the most talked about topic…but I think it often goes hand in hand with debt issues. And it’s something very new for me…

I finally got all my past state payroll taxes cleared up today. The monetary amounts weren’t that high (under $100) but the paperwork was just nuts. Sometimes I think about moving just to find a state with less paperwork (kidding, sort of).

With that out of the way, on the tax side of things I just have setting up a payment plan with the IRS to handle. No update there, but I did mail my Q1 reports to my Tax man, so I’m sure I’ll be hearing something soon.

My work life lately has been interesting. My main business is doing OK, and my Alpha project is moving along nicely. In fact, I don’t have really much work that I have to do on either of these revenue streams. My employees pretty much handle everything there, which is really nice. That business isn’t all that exciting to me, so it’s nice to delegate when I can. It’s left me free to delve into researching a few other potential projects.

I’ve been trying to teach myself some news skills lately that I could turn into viable businesses. Mostly programming….I really wish I had learned to program back in college or high school. I can do basic HTML, and some very basic PHP. I’ve been working more on higher level understanding of applications, so hopefully I can at least direct a programmer well. Photoshop skills would be nice as well. It’s just never gonna happen. The best I can do right now is learn enough to know how to manage an employee or contractor well. Maybe that’s OK, but allot of things would be cheaper if I could do them myself.

I’m going to do a big debt spreadsheet update either tonight or tomorrow, so I should get that up by the end of the week. It’s time to take stock of where I’m at and how far I still have to go.

On the social front….things have been better. I’m still having considerable trouble feeling comfortable talking (about me), but it’s not terrible. Plus, I’m not a huge social butterfly anyway, but I could use a few more friends. (maybe even the lady kind? : )

It would be nice if I had a larger place to actually have people over….it’s just not really possible where I’m at right now. Between all my business stuff and one crappy couch, it’s not much of a place to entertain in.

I started writing on the Lending Club blog last summer. As my home was in foreclosure and I was preparing to live in my office it was the break I was looking for. It started out just as a writing gig, but the extra money was desperately needed. In fact the day I found out I got the gig, I wrote this post about it being part of a turning point in my whole story.

And this week, with the announcement of Lending Club’s SEC registration, and suspension of new lenders, I was astonished by the lack of basic research that was done by many p2p lending and personal finance blogs.

Many blogs that I highly respect for their tips on saving, investing, frugality, seemed to completely miss the mark on Lending Club’s registration.

I am not a Lending Club employee and what follows is purely my own speculation of what Lending Club is doing based on my personal analysis (keep in mind I was a business finance major in college, and I used to read annual reports for fun).

Lending Club is not going bankrupt

That’s just an absurd notion. Why would they continue to fund loans during this quiet period if they were low on cash? They list 22 employees on their website. They just raised 10.26 million not 8 months ago. From my observations they are not spending outlandishly. Even if they were at a 400K/month (high estimate) burn rate, that still leaves plenty in the bank.

The abrupt stop in allowing new lenders was necessary

Sure, it sucks to wake up to an e-mail that says “no more referral program, no more lenders”. I made $325 just in March from the referral program. But as far as I understand you can’t give advance warnings on this type of stuff. So, yes it was abrupt, but to assure their registration gets approved, the abruptness was essential.

Lending Club will stay a P2P Lender

I would be shocked if they had any intention of moving away from their current model of matching lenders and borrowers. Look at their growth numbers below - why would they stop now?

Referral program will be back

Right before the announcement I was working on a project for Lending Club that involved the referral program. The implementation of this project has been pushed back, but I am still working on it and I would know if the project was canceled. I imagine the referral program will be coming back as soon as the quiet period is over.

Secondary marketplace? Heck yes.

This is the exciting part of this process that many lenders have been hoping for. The establishment of a secondary market within the peer lending community. It is clear that a registration of the p2p loans as securities would allow Lending Club to establish a secondary marketplace. So, if after a year you no longer wanted to hold onto loans in your portfolio, you could resell them to other lenders in the community. It would add liquidity to the marketplace.

Prosper’s S1 Filing is dead

If Prosper’s S1 filing had been successful, to create a secondary marketplace, we would have heard about it by now. I have an e-mail into Prosper following up on their filing, but unless they have some startling news, I think their offering is dead (probably because they didn’t take the steps LC is taking now).

Lending Club is growing

During this quiet period their growth will understandably stall. But if you look at their numbers, they are growing like a weed:

OK, that’s I think about everything I wanted to get off my chest. I hope my insight helps clear a few thing up. They are a good client for me, and I’ve enjoyed getting to know the team over the last 9 months. I’m positive they will be back strong with some exciting stuff once this period is over.

I read an article by a venture capitalist yesterday about the whole Bear Stearns deal and how the worst part was the loss of PSD’s. Employees that were (or at least started) poor, smart, and with a burning desire to get rich.

I was like, woah….that’s totally me! I’m poor. I think I’m pretty smart. And I do have a burning desire to achieve financial success. The only difference is that I would consider “financial success” just getting back to a zero networth.