Just a quick shout out to Lending Club! They won the Banking/Bill Paying Category of the Webby’s (which is like the Oscars for online companies)! I write about once a week for the Lending Club blog. It’s great to see them recognized, and hopefully they’ll be coming out of their quiet period soon! I have $50 invested in loans at Lending Club.

Anyway, congrats to LC!

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.

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 wrote a piece for Lending Club this week with some tips on alternative ways to finance a start up company. It got me thinking about my exit strategy for my current business and if I have one. I do…but it’s still at minimum a year or more away, and that’s assuming everything goes perfect. It also assumes I have the cash to keep going the next few months. And also that the IRS doesn’t crush me.

Awhile back I think I was going to give myself til the first quarter of this year to decide to just get a W-2 job, or keep going with my business. I’m hoping to do a hybrid. Get a half-time W-2 Job, and keep my business running, and hopefully going strong the rest of the year. We’ll see.

Back to financing a start-up. I traded equity in my company a few years back for start-up cash. It’s a decision I regret now. It’s a big reason I didn’t just bankrupt the business last year. I have investors that expect a return, and I have to provide that for them. It’s actually one of the biggest drivers of my motivation right now. They gave me money, I screwed around not doing business activities (ie, the day trading), and I don’t want them screwed just because I was an idiot.

I wish I had never raised any money, but I did. I can’t change the past, and I need to focus on the future….and that means making more money. Lots more…

I asked the question, what would you do with $10,000? for a post over at LendingClub today. They are giving out $100 bonuses for commenting on the post (about what you would do with an extra $10K). Go over and comment for your chance to win $100, and if you don’t have a Lending Club account yet, use this link to get a $25 bonus when you sign up.

I’m thinking of a career move into male modeling. My only problem?

I can’t turn left. I’m not an ambiturner.

(more…)

It’s been ages (well, maybe 16 months or so) since I’ve really closely watched a day of trading over in New York. Tomorrow is looking interesting though for the markets.

I’m not trading anymore, but I still have a strong fascination with stocks, the economy, finance, etc.

Anyway, should be a heck of ride on Wall Street tomorrow.

Does anyone know of a handy widget (something I could install on the blog here) that I could track my debt with? Something that’s easy to use and update?

This event happened last summer.

After a day of shenanigans around Seattle including blow up woman dolls and sheep (don’t ask), our bachelor party settled down at my house for some good old fashioned Texas hold ‘em poker.

$10 buy in. Big stakes right? Yeah, right.

$10,000 To Start

Earlier in the week I had deposited $10,000 into my very highly leveraged forex trading account. I was feeling good about this 10K, and right off the bat I was up to around 20K within the first few days of the week. The party started on a Thursday, and I had opened some positions in the Euro vs. Dollar (EUR/USD) before the party.

Mad Cell Phone Quote Checking

I remained in the positions during the day, frantically checking quotes on my cell phone while trying not to arouse too much suspicion. The guys probably thought I was waiting for a text from a hot lady or something (that would have been better!).

Back to the poker game…

Like a dumbass (I was) I kept my computer next to me during the poker game so I could watch my trades. Talk about a good friend, right? Anyway, while the poker game was heating up, so was the currency market. All my trades were going the right way during the game.

After the poker game finally concluded, I was able to close out my now very profitable positions.

I had made $10,975 during my friends bachelor party.

Oh, and I got second in the poker game. $40 in cash.

The worst part about all of this (or maybe not), is that during the poker game I was genuinely more worried about losing my $10 in that game than I was about the 10K I had in play in a wild currency market.

I can’t believe I did that. I had to login to my trading account to check those numbers last night. While the flashing quote lights were tempting, I had no desire to trade again. I hurt too many people and myself with my white collar gambling.

On a side note, I traded that 30K up to over 50K within the next week, only to lose all my gains and end up back where I started with 10K. Lesson? Don’t trade Forex when you are 23 years old and stupid.

If you are interested in learning how to trade forex, this site has some good tutorials

I was sitting on the toilet today at the office, and a random thought came into my mind,

“If I suddenly had $10,000 in cash, what would I do with it?”

As my mind starting whirring the possibilities seemed endless…

With 10K I could:

• Implement the marketing plan I put together for one of my businesses. 10K could sustain it for 4 months, and could result in huge gains in revenue, clients, and reoccurring profits
• Avoid my personal bankruptcy filling. Spend 5K negotiating and paying down some personal debt and spending 5K on the business.
• Put it in my savings account@ emigrant direct
• Go on a fancy vacation to Tahiti.

OK, so the last one never really crossed my mind. When my mind had stopped whirring, I realized something that didn’t even cross my mind: depositing the 10K into a trading account. A year ago that’s the only way I would have thought of using a 10K windfall. I would have visualized that 10K turning into 60K (which, I did once in a month in 2006), and then that 60K into 250K and so on and so on. You see how screwed up my thinking was?

Of the options I listed above, with a 10K windfall I would likely choose the 2nd option of splitting it between investing it in my business and using it to avoid the BK.

So, what would you do with $10K?