My allowance at the time was .50 a week, and the squirt gun I wanted to purchase was $20.

It was the earliest “saving experience” I can remember, I was 6 or 7 at the time.

It’s funny how little has changed now that I’m grown up. I still get an allowance (payday!), and I have goals that I’m saving for. The only difference now is the numbers.

At some point growing up, I switched from a “saver” to a spender. I believe it was around my 18th birthday. It’s only in the last 3 years, really since I started the blog, that I’ve reverted back to my “saver” mode. I spend significantly less now than I earn, which has allowed me to make some huge strides in paying back my debts this year.

Some thoughts that parents could use to encourage saving:

1. Be a saver yourself

5. Set savings goals (ala smartypig)

Are you a saver or a spender? Did your parents encourage saving?

The new page takes all the granular, nitty gritty data that Lending Club collects on it’s borrowers and lenders and turns it into a beautiful, almost sensory, colorful experience.

Lending Club's new stats page

Data Highlights

• 79% of Investors are earning returns between 6% and 15%
• Lending Club has issued over 61 million in loans to date
• 58% of Lending Club borrowers use their loan to consolidate or payoff credit cards
• The highest returning loan purpose? Renewable Energy Financing at 10.58%
• The lowest returning loan purpose? Moving Expenses at 4.59%
• “E” credit grade borrowers are providing the highest average return of 10.88% (”A” credit grade is the highest)

Get $25 to Lend at Lending Club

Lending Club is still giving you $25 to lend if you sign up using this link.

My Lending Club returns

My current return with Lending Club is at 9.15%. I’m going to be moving a decent chunk of my cash fund into Lending Club in the next month.

I think the number one reasons was that I was using money that was borrowed, and money that I couldn’t afford to lose.

I also had no clue about risk management.

But it got me thinking, should one ever borrow money to invest?

No, silly, Never Borrow

I don’t think you should, at least not for “investing” in stocks or options or anything risky like that. You trade differently (worse, just look at me) when you are trading with other people’s money. Losses don’t sting as bad as they should (until you run out of money completely).

So, when might it be a good idea to borrow money?

Maybe it’s OK

If you are a startup or small business owner, I think you could make the argument that borrowing money to “invest” into your business can make sense.

If you can get a 0% loan, I think that might be worth taking and at minimum stick in a savings account or I’d put it in my small lending club account and do a little interest rate arbitrage. This used to be a pretty popular technique when 0% credit cards were abundant and interest rates on savings and cd’s were much, much higher.

I can’t think of many other good times to borrow money to invest. Maybe if you were sitting on a million in cash or something, and it was somewhat illiquid, then you could get a secured loan.

What do you think? Borrowing ever a good idea when it comes to investing?

Your Nest Egg--Is It Working For You, Or Waiting?

Sadly, no such thing exists when it comes to planning your retirement.

I knew that retirement planning was important and enrolled myself in my 401K at one of my very first jobs. It had a cushy match. 4% of my salary directly deposited in lieu of pension, and then a 50% match up to 8%. I contributed 8% and got the full match each year.

I rolled this 401K over from employer to employer, and then after being laid off last fall, I wanted to get my retirement investments out of the company-managed plan (that particular plan had very high fees, and the employer had changed administration companies several times, each time there was a conversion fee to the accounts).

I took my 401K information to my financial planner and asked what to do now.

I was going to be self-employed and no longer have a match.

Low and behold, the fees on the 401K and all of the switches between administration firms were wolfing down my contributions as fast as I could sock them away.

I was nervous about a ROTH IRA because I have to “buy in” to all of the funds I wanted to invest in. Initially, this cost me about $680, but there’s never a fee to maintain my account unless I buy more shares or sell some shares and rebalance my investment.

Since I prefer to let things sit and rebalance 1x to 2x per year, this worked out to be a great investment and is saving me over the long term.

Another plus is that on my ROTH IRA, I’m paying taxes on the money going into the account (the small money) not the money coming out (contributions plus interest compounded over 30+ years). Alternatively, had I stayed with a 401k, I would have paid income tax in my retirement years…. What’s the fun of retiring if you have to pay gigantic income tax payments on YOUR money?

I’d like to retire early and we think that’s possible. My 401K wouldn’t have allowed me to withdraw until I was 59.5 and would have required a withdrawl by 70.5. I like the freedom that the Roth provides—I can choose when I’m ready to take my payments.

An important consideration on IRAs though is that the maximum contribution is just $5,000 a year, so it likely won’t be the entirety of your retirement savings. You’ll want to have some other investment going. A 401k allows you to contribute over $16,000 a year, which is especially good if you’re beginning your investment later in your career.

For those with excellent 401K and 401B programs available to them at work, you’ll have to get out your calculator or hire a financial planner to do the math for you, but like me, you may just find that your nest egg is better off in a Roth than in the corporate 401k.

Looking around my small bedroom, I saw a pile of clothes, laundry that I hadn’t finished from yesterday.

Whew. Just a dream.

In my dream I was down $10,000 on a $30,000 bet I had placed on a currency overnight.

It’s not a good feeling to be down $10,000.

It’s a great feeling to wake up and know you don’t have any “bets placed”.

I sleep much better now than I did 3 years ago. 3 years ago I would have been up every other hour checking the latest news from the federal reserve and checking my charts. Not a healthy lifestyle.

Fast forward three years to today and I still have the occasional day trading dream. Last night’s was actual different than my normal day trading dreams. My usual dream actually goes like this:

I have some highly leveraged play going. Usually in the forex market. I’m chatting with a friend, when suddenly some news breaks and my position starts to be profitable….like hundreds of thousands of dollars profitable.

And then it happens. The trade starts to turn. I desperately try to sell, still saving a huge profit. Something doesn’t work. The trade won’t go through. My “profit” is going down the tank and I can’t get out.

I panic.

It’s nice not being a day trader anymore. It was mostly just gambling for me anyway.

It’s nice for me at least not even being a traditional investor. Maybe at some point I will buy stocks again, but I think it’s unlikely. Why play with fire?

I don’t care what the market did yesterday. I could care less what it did today.

I like my sleep.

I’m kind of obsessed with Real Estate lately.

It’s been two years now since I had to do a short sale on my first home purchase (a dumb one!), and I can’t help but look at the much more attractive prices in the Seattle area now.

Of course, I won’t be actually buying a house in Seattle any time soon. But, sigh, I love looking. It’s like my gossip magazine. You know it’s pointless, but it’s fun.

There are two sites I use when looking for homes in Seattle:

1. Redfin.com

I love Redfin’s interface. It’s slick, big, bold and beautiful. My only gripe would be that they still have some formatting issues to work out when using the site in Chrome (my browser of choice for speed). Also, they don’t cover the Portland market, so that’s a bit of a bummer. But for Seattle, heck yes I love you.

2. Trulia.com

Trulia is my catch all site. I can look up homes in Portland there as well as Seattle. It’s not as fancy as Redfin, but it’s a great workhouse. A lunch-pail, dependable type site for my real estate search wanderings.

I would love to someday be able to get into real estate investing a little bit. There is just something about owning a piece of a building and real dirt that appeals to the farmer in me.

Did I miss any other great real estate search sites? What do you use?

To register for the webinar: Click HERE

If you haven’t opened an account at Lending Club yet, it takes about 7 minutes to do (really, I’ve timed it!).

Why Invest At Lending Club

Well, for one, it works. They recently released stats for their entire lender members, and they are impressive. The average net annualized return is 9.91% as of today (check out the homepage to see the stat updated daily).

I invested in a number of notes over the past year or two, and my average return so far is 9.34%…not too shabby at all.

Invest Now

Setup your account now. Click the button to become a lender at Lending Club.

Ally = GMAC Financial Services

Their website design is quite modern and I spent some time digging around the site. Apparently, Ally Bank is the new branding for the old GMAC Financial Services.

GMAC will use the new image as a way to attract retail deposits, which will be a key funding source during the continuing credit squeeze as it tries to fill an $11.5 billion capital hole, as revealed by bank stress-test results, the newspaper said. – From upi.com

Nice Savings Rate

They are offering a 1.95% online savings account which is nearly .25% better than what I’ve seen from the major online banks. That’s pretty sweet….but from GM? Would you really trust your money there? Of course it’s FDIC insured…but still, it makes me a little wary.

Well, I like the design, so kudos there. And hopefully that 1.95% rate won’t drop like a rock like most savings accounts have in the last year. See Ally Bank CD Rates.

Sign up for a 2.00% savings account at Ally Bank: >>Click HERE

or earn more like 9% (that’s my average earnings rate so far) at Lending Club.

It wasn’t a terrible move, but last week I sold all my big positions in the account and now own no stocks (except for a few 1/10 of a shares that I might as well hang on too).

Stocks just aren’t my thing. It wasn’t a huge amount (just over 2K), but I found myself checking my major holdings pretty much daily.What a waste.

I’m just not a stock guy anymore. Even if I could get 10% returns year after year, it would not be worth the stress to me. I would always be checking stock prices and wondering if I should sell.

So, I sold everything last week (after the big run up) and I feel good.

Even if I have extra money (that I can’t pay to my mother) in the future, it’s going to go into low risk accounts (t-bills, high yield savings, etc), not stocks.

I don’t have any desire to day trade again. I have the discipline now to be a “buy and hold” investor.

I just don’t want to be.

What would you use it for?

That’s the question Uncrunch.org is asking America. And it’s taking those responses and giving out a $5,000 interest free loan every month to the top story. As of this writing there are just over 30 Uncrunch America Stories that have been submitted.

What is Uncrunch.org?

Uncrunch.org is a “awareness campaign…aimed at providing resources to consumer and businesses in need of credit solutions. It’s goal is to help resolve the credit crunch…”

A number of companies are involved with the campaign including Lending Club, Virgin Money, Credit Karma, Gezzeo and other consumer friendly personal finance companies.

What would I do with $5K?

Well, I wouldn’t be the best candidate for a $5K interest free loan, as I would put that towards paying down some debt. That wouldn’t directly stimulate the economy or create jobs, but that’s what I would do.

Links

Geezeo’s blog on the contest, and Credit Karma’s take.

How could you stimulate the economy?

What would you do with the money? Buy a piece of equipment? Hire a part time student? Lease a small office space?

For a chance at a $5,000 0% APR loan join Uncrunch.org and submit your story.