Who Wants to Talk Stocks?

Stocks, and the stock market in general are not a normal part of the content here.  That’s almost entirely because I don’t have a lot of money invested in the stock market, and, as a result, I don’t do a whole lot of trading of stocks.  But, I do have a few accounts here and there, and I’ve managed to do semi-well with my investments over the long term.

But, I’ll leave it up to you.

The things you won’t get from any articles I write about stocks or the stock market:

  • Well analysed stock picks: Yeah, that’s just not going to happen.  At least not yet.  I don’t know enough about analyzing a stock in the way that a professional would.  If you want professional picks, try the Wall Street Stock Forecaster.
  • A well-rounded, balanced look at all of the stocks: Some of them, I just bought because I like the company.  More savvy investors will likely scoff at that, and maybe call me names.
  • No guarantees:  I can’t even guarantee that I’ll make any money on any of the stocks that I talk about, so I certainly am not going to guarantee you that the stock is any good.

What you will get from my stock/stock market articles:

  • Stock picks: Yep.  They might not be very well analysed, balanced, or even guaranteed to be any good, but that shouldn’t stop us from being able to discuss them.
  • Insight into my thought process when buying each of them: The what, why, etc of each of my stock picks.
  • Peace of mind: You’ll most likely have found someone who is a worse investor than you are.

So, what do you say?  Should we discuss my stock portfolio?  Leave a comment below and let me know!

Lending Club Return Update 2Q13

Lending Club is a peer-to-peer lending service.  People (like you and me) sign up for their site, and list a loan to be funded by investors (like you and me).  I like to think of it as replacing the bank in a loan with me.  (Except I’m not “too big to fail”.)  Of course, with that comes the same risks that the bank assumes when it issues a loan.  There’s a risk of late payments, missed payments, and default and it’s associated collection activities.  Luckily, Lending Club and Prosper (another p2p lending site) take care of most of the paperwork for the lenders (and borrowers).  This post is the second quarter update on my Lending Club account, and the return I’m getting on my money.

If you’d like to catch up a little, here’s links to the last few quarterly updates. (1Q13, 4Q12, 3Q12)

Beating Broke Lending Club Update

First Lending Club Default

I’ve been mentioning in the last several updates how lucky I’ve been that I haven’t had a loan go into default yet.  Well, that streak ended recently.  I knew it was only a matter of time before one of the notes defaulted, and one has.  Luckily, the loan that defaulted was a small one, and my portfolio has grown enough that the value of the default didn’t really affect the account too much.  The value of the defaulted loan is about 1% of my Lending Club portfolio.

There’s also a loan that is in the 31-120 days late category, that has the possibility of going to default, but at this point, the borrower is making attempts to pay the loan.  The reason it’s still in the late category at all is because the most recent payment was only a partial payment.  This loan is a larger loan than the defaulted one, so I may have to consider taking the loss on it and selling it at a discount to get it off my books.

Diligent Reinvestment

One of the things that I like most about Lending Club, and p2p lending as a whole, is that you get a relatively high churn on your money.  It’s not a buy-and-hold scenario, per se.  Yes, you invest in a note with the expectation of holding that note until it is fully paid off, but, as the payments come in monthly, that money is available for reinvestment.  In my 1Q13 update, I mentioned that I’d been a bit lazy in my reinvestment of those funds.  I was slightly better with that in the second quarter, and was able to keep most of the money pretty actively invested.

Passive Income from Lending Club

Many people (myself included) call p2p investing a form of passive income.  While not strictly meeting the criteria in that it does still require some activity on the investors part, it’s pretty close.  Maybe we need to start defining passive income in terms of it’s passivity?  Something like levels.  Each level is achieved by it’s decile of passivity.  For instance, I think p2p investing could be somewhere around 90-95% passive.  That would make it a Level 9 Passive Income source.  With about 15 minutes of work a month, I’ve earned almost $60 in interest payments as of the end of June of 2013.  Last year, with the same amount of work, I earned $75.37 in interest payments.  If I had significantly more money, that amount would be larger, but I think that the time spent each month to earn it would be a bit larger as well.  Still, a pretty close to passive means of making some money.

Lending Club Return Update

We’ve talked about most of the rest of the account, but the title did say that it was a return update, right?  Yes.  In my 1Q13 update, I mentioned that the rate of return then was being shown as 14.63%.  As of 8/3/13, it’s being displayed as 14.08%.  The combination of the defaulted loan, and the payoff of a couple of higher interest paying notes is bringing the rate down.  I’ve been happy with the return I’ve been getting, but I truly think that a more reasonable expectation of return is somewhere in the 10-13% range.  I’ll take the 14%+ returns I’ve been getting though.

Click here to learn more about how I select my Lending Club investments.

Overall, I’ve been really happy with my results at Lending Club.  And, with the p2p lending industry as a whole issuing over 200 Million in loans in July, it would appear that there are plenty of other happy users too.

Have you gotten your feet wet in p2p lending?  Why or why not?

Are You Leading Your Finances?

This last weekend, I attended a young professionals conference.  As you can imagine, a large part of the conference was spent talking about leadership.  One of the speakers was legendary basketball coach Dale Brown.  One of the breakouts was entitled “Visionary Leadership”.  I’ve also just started reading the book “Entreleadership” by Dave Ramsey.  In all of those places, there are lots of buzzwords that describe leadership, and what a leader is.

Of course, this being a personal finance site, my mind couldn’t help but apply as much of it as possible to personal finance.  When we think of our personal lives, we rarely apply the word leader to any aspect of it.  We apply it to ourselves and others in our work and volunteer lives, but not our personal lives.  Why not?

When it really comes down to it, we are the leader of our lives.  We are the ones who apply the same principles that leaders apply to business and volunteer organizations to our lives.  Or don’t.  We try and become better leaders at work.  We expect better leaders to lead us.  But rarely do we try and become better leaders in our personal life.

Leading your Finances

Leading Your FinancesPersonal finance aren’t all that much different from a business and a business’ finances.  We still have income coming in, expenses going out, and the profit left over.  Unfortunately, for many, that’s where the parallels end.  Let’s change that.  Let’s apply some of those leadership principles to our lives.  Specifically, let’s apply them to leading your finances.

Financial Efficiency

Business leaders are always looking for ways to make their business and employees more efficient.  Over the years, businesses have foregone the paper and pen and replaced them with computers.  They’ve replaced old marketing tactics with websites and social media.  Leading your finances means finding, and embracing, new ways to make your finances more efficient.  Forego the old check and envelope method of paying your bills and sign up for bill-pay.  Or automate your bill paying by setting them up for auto-pay.  Find ways to save that also create income.  Look into better rates at better banks.  Learn about dividend investing.  Learn about peer-to-peer lending.

Financial Opportunity Seeking

Many of today’s biggest and brightest businesses wouldn’t even exist today if their leaders hadn’t been continually opportunity seeking.  If all Apple still made was computers, it wouldn’t be the multi-billion dollar company that it is today.  If Steve Jobs hadn’t seen the opportunity in the iPhone, iPod, and iPad, they’d be just another company making computers.  Apply the same to your finances.  Peer-to-peer lending hasn’t always been what it is today.  There was a time where it was still a fledgling opportunity.  A small percentage, relatively, of the population saw the benefit of it as an investing avenue, and, for most, their finances are the better for it.  Be open to services and products that can help you make your finances better.

Continual Financial Improvement

Good enough is never good enough for a business leader.  The only thing that stays the same is their desire for improvement.  Beyond always seeking opportunity, we must also always be finding ways to improve our finances.  We must always be assessing the risk involved with those new opportunities, and making decisions on what will best improve our finances.

Financial Failure

Businesses fail.  If they have good leaders, they only fail momentarily and spring back stronger than ever.  They’ll have set the company up to be diversified so that any one failure shouldn’t be enough to ruin the company.  Investors talk all the time about the importance of diversifying an investment portfolio.  But, it can be applied elsewhere in our finances.  Having all of your money in one online bank is great.  Until your internet goes down and you can’t get to it to bill pay.  Diversifying to have a set amount of cash available in an emergency can help you out there.  Not depending on just stock investments is another great way to diversify for failure.  Prepare your finances so that an opportunity that fails only sets you back, doesn’t bankrupt you.

How can you improve your finances today?  What opportunities can you learn more about and assess for use in your finances?  What efficiencies can you create to make your finances better? What other leadership qualities can you apply in leading your finances?