Lending Club Update

As I mentioned and advocated for last month, I've cautiously dipped my toes into the Lending Club pool, and I wanted to give an update on how I'm doing.

Returns

The graphic above shows the percentage of return that I have received.  As you can see, I presently have a net annualized return of 8.29%.

Analysis


While I'm pleased with the return, I expect the percentage to go down significantly in the next few months as one of the loans that I purchased a note on is currently in talks with a collections agency.  I only hold seven notes, so any defaults significantly lower my returns.  While I suppose that it is possible that I will recoup some of my money, I'm not holding my breath.

Friday Links - Identity Theft and Fun with Asterisks Edition!

This doesn't have anything to do with this post,
but I found it on a meme site a few weeks ago,
and, for the life of me, I can't figure out what the
joke is.  I am hereby offering a reward to
whomever best explains the joke.*****

Making Sense of Cents questioned how much people like to spend on hotel rooms.  I'm definitely with her on the "I like to pay more so that I don't stay in hotels where mounds of hair greet me when I pull back the sheets" spectrum.

Girl with the Red Balloon wrote about how it's irritating when people give gifts.

Oh.  And then expect you to use them in a certain way.  I totally agree.  I've been using my Wii nunchuks as actual nunchuks to fight crime, Teenage Mutant Ninja Turtle style, since Christmas.  Suck it, Nintendo!

CBS Money Watch explained the advantages of credit versus debit cards.  This post hit close to home as somebody totally stole one of my credit card numbers, and used it to try to buy stuff online this week!  (I know that set up makes it sound like it didn't happen, but it really did).  Fortunately, Chase realized that I wasn't making the charges pretty quickly, but not before they, snickeringly, asked me the following question:

"Did you recently purchase $300 worth of items online from Bed, Bath, and Beyond?"

After a quick tug on my Y-chromosome to make sure it was still there, I assured them that I had not spent $300 at Bed, Bath, and Beyond.*  Chase even next-dayed my replacement card to me.

Finally, Jana at Daily Money Shot wrote about how she doesn't have a lot of self-confidence.  In all honesty, I totally feel her as I struggle with the same issues.  We can only take it one day at a time.**

*Having said that, I did spend a summer working at Linens 'n' Things while I was in college.***  Later, they went bankrupt.  Coincidence?
**Linking to Daily Money Shot is IN NO WAY MEANT TO APOLOGIZE for sending awkward tweets to Jana earlier this week in which I explained my original confusion as to the title of her site.
***While in general the job was okay (I got to feed the trash compactor by poking cardboard boxes that had been thrown into it with an ACTUAL TEN FOOT POLE and climb up on tall ladders), probably my least pleasant work memory occurred there.  As I came back to work after a day off, I was informed by my supervisor that somebody had smeared some poo around in one of the stalls in the women's restroom.  I was also told that this had happened the day before.  While I appreciate the fact that I was the low man on the totem pole and therefore was the one to do the grunt work, I thought (and think!) that it's a pretty jerk move to save a poo mess for somebody else the next day (by placing an "Out of Order" sign on the stall) instead of just cleaning it up.****
****Yes, I cleaned it up.
*****Perhaps it's not a logical joke at all.  For instance, my favorite joke in high school was "Q: How many existentialists does it take to screw in a light bulb?  A: Fishhhhhhhhh."******
******That's not actually my favorite joke from high school, but my favorite joke is too sexist for me to bring up here.  Alexa tells me that an overwhelming amount of my traffic comes from women who spent some time in college, and I oughtn't to bite the hands that feed me.  If my Y-chromosome comment didn't send you a-packing, that joke certainly would.

Money Traps: The Unexpected Inevitability of Human Error

If you watched the playoff games over the weekend, you'll agree with me on one thing:  errors ended up deciding the loser in each game.  In the Giants/49ers game, a key fumble in overtime by a member of the 49ers set up the Giants to kick the winning field goal.  In the Ravens/Patriots game, with time running out in the 4th quarter, the Ravens' field goal kicker missed a 32 yard field goal (read: very short distance field goal) which would have tied the game.

While it's a bit reductive to assign these players all of the blame in the losses, it's human nature to assign the most blame to what (in retrospect) were the most obvious causes for the losses.  Even though these guys were out on the field trying to help their respective teams, they each made a key mistake at the worst possible time.

But what does this have to do with personal finance you ask?

Freedom and Group Coupons

Quite the bargain price!

If you're interested in saving money via frugal means, this desire is probably motivated by a desire for freedom. Whether that is freedom from credit cards or other forms of debt, or whether that is the freedom to do whatever you want each and every day of your life, you realize that getting a handle on your money is vital to your desire.

Because of this desire for freedom, we may look for the best deals on goods and services in an effort to find freedom that much sooner.  However, I'd like to suggest that certain deals actually bind you more than they set you free.

In my opinion, these deals come from social coupon sites like Groupon and Living Social.

I've soured on these sites a little bit lately.  I haven't had any particularly bad experiences, but several of my Groupons are getting close to expiring*, I'm finding myself running around town trying to cash them in before it's too late.

While the value of the Groupons is good, I feel that they're causing me less personal freedom because I feel compelled to redeem them before it's too late.  If I'm engaging in a money-saving activity that causes me to feel less free, then I am kind of subverting the purpose of saving money in the first place.  And that's not a good thing for me.

Here are a couple of other reasons why the deals these sites offer do not necessarily make your life easier.

Friday Links

The Penny Hoarder listed five weird ways to make extra money in college.

Beating Broke wrote about how frugality will change you.  An irrational love of ramen noodles does not top the list.

Flexo at Consumerism Commentary described how frugal companies will lose talented workers.  It turns out, if people are good at making money for a company, they expect to get lots of it back.

A post at Couple Money suggested that people are apparently eager to eat dog food in retirement because they keep cashing out their retirement accounts early.  Hmm...considering the fact that my dog is the most fit member of my family currently, perhaps I should start eating dog food now.  That's probably the best lesson to learn.

Katie at Girl with the Red Balloon encouraged us to lead by example.

Ashley at Money Talks pointed out some ways to be more productive when you work from home.  Personally, I prefer to be more reproductive when I'm working from home (giggity!).

Why I'm Glad I Have a Day Job

This is what a theatre looks like.

I wrote a guest post over at Always the Planner a few months ago where I talked about some ways to get closer to your dream job.  You should go check it out if you haven't already.

The last bit of advice that I suggested in that post was to make sure to remember that you've got bills to pay.  My point was that if you've got steady income from a day job, it may be best to continue working in that position until you develop stronger footing in whatever your passion may be.

I'm pretty glad that I've taken my own advice.  Here's why.

Today, I start rehearsing for a play at one of the most reputable regional theatres in my area.  I will be working as the understudy for the male lead.  Because of this, I will not have to attend all rehearsals, but I will have to learn all of his lines (obviously), attend certain/most rehearsals, and be on call for all performances (it's the sort of thing where you'd like to go on stage, but you'd really rather whatever it would take for you to go on stage didn't happen [e.g., the lead actor would likely have been seriously injured and physically could not perform]).*

My rehearsal today is just over eight hours (including the meal break).  Even as an understudy, I'll probably spend close to a hundred hours total in rehearsal, and that's not counting the performance times where I'll need to be ready to go even though I will probably (knock on wood) not have to.

In exchange for my time, I have a contract with the theatre which states that they will pay me $250.  If my hundred hour figure above is accurate, that's $2.50 an hour I'll be taking home, pre-tax (which is about as good as the money I make over at Fiverr).

If the above sounds like I'm complaining, I assure you that I am not.  I'm chalking this whole experience up as a win.

First off, in my experience, the networking that comes with being in shows leads to more shows.  Second, I'm pretty excited to even be getting the opportunity to do anything with this show because I've never worked with this theatre company before.  I hope that my involvement will open the door for me with them in the future.

I love what goes into being an actor.  I have gladly done it for free, and I'll almost certainly do it for free again.

While one day, I hope working in theatre is all I do, I'm just glad having my day job affords me the opportunity to pursue what I love, even if it's on the side right now.

We've all got to take steps.  Here's another one for me.

*A buddy of mine is having a bachelor's party weekend while the show is going on that I can't go to; that's the only part that I'm complaining about.  Feel bad for me.

Photo by Andypiper.

6 Things to Remember from Dr. Martin Luther King Jr.'s "Mountaintop" Speech

In honor of Martin Luther King Jr.'s birthday, I thought that I'd read through one of his speeches that I wasn't familiar with.  The speech that I chose was MLK's "Mountaintop" speech, which is of interest to me as there is currently a play on Broadway (The Mountaintop) that imagines an encounter between MLK (played by Samuel L. Jackson) and a motel maid the evening of April 3, 1968, after MLK had given the "Mountaintop" speech.  On April 4, 1968, he was assassinated.

I'll be honest; I went into the speech looking for ways to link it to money (this is a personal finance blog, after all).  However, while some of my points definitely reference money issues, as I was reading the speech, I realized that I didn't want to limit myself to just that.  Some of my points below strike a little more broadly, and I think that's for the best.

If you are unfamiliar with the speech (as I was), I definitely recommend reading through it or watching the video clip.  The man's work doesn't show up in college speech and rhetoric classes for nothing, and I've tried to capture a feel for his oratorical talent by pasting longer portions of his speech below.

One last note about this article: while I had originally said that there were lessons from this speech, I found myself thinking that I already understood most of what the speech pointed out.  I simply needed to remember them.  As such, here are six things to remember from the "Mountaintop" speech.

• Remember Your Dollar Matters - "We are asking you tonight, to go out and tell your neighbors not to buy Coca-Cola in Memphis.  Go by and tell them not to buy Sealtest Milk.  Tell them not to buy ... Wonder Bread ... Tell them not to buy Hart's bread ... Up to now, only the garbage men have been feeling pain; now we must kind of redistribute the pain.  We are choosing these companies because they haven't been fair in their hiring policies; and we are choosing them because they can begin the process of saying they are going to support the needs and the rights of these men who are on strike."
• I love the phrase "Redistribute the pain."  Whether it's a good thing or a bad thing, free market and non-monopolistic economies' strength comes from the fact that people can choose with whom to do business.  If you disagree with a company's practices, as MLK did with the above companies hiring discrimination, you are under no obligation to go to them with your business.  Since businesses are motivated by profit, if you can get enough people to boycott a company, you can force that company to deal with its issues.  United, we can make the world better.
• Remember the Importance of Now - "It's all right to talk about 'long white robes over yonder,' in all of its symbolism.  But ultimately people want some suits and dresses and shoes to wear down here!  It's all right to talk about 'streets flowing with milk and honey,' but God has commanded us to be concerned about the slums down here, and his children who can't eat three square meals a day.  It's all right to talk about the new Jerusalem, but one day, God's preacher must talk about the new New York, the new Atlanta, the new Philadelphia, the new Los Angeles, the new Memphis, Tennessee.  This is what we have to do."
• In the speech, MLK is criticizing pastors who preach that things will get better for the poor in the afterlife without providing guidance on how to make things better today.  One group focused on making today better (and I know that they're shifting priorities for various reasons)was Love Drop.  They didn't put it on the government to help people out, they didn't put it on the church to help someone out, they didn't say "Something should be done about those who need help" and then do nothing.  J. Money, Nate, and others decided that people should be helped TODAY, and they worked in a specific and organized way in order to do so.  If you have a heart that burns to help those who are needy, there are plenty of ways that you can make a difference.  Look for those opportunities.  Make the world better.
• Remember Small Actions Can Have Huge Consequences - "You know, several years ago, I was in New York City autographing the first book that I had written.  And while sitting there autographing books, a demented black woman came up.  The only question I heard from her was, 'Are you Martin Luther King?'  And I was looking down writing, and I said, 'Yes.'  And the next minute I felt something beating on my chest.  Before I knew it I had been stabbed by this demented woman.  I was rushed to Harlem Hospital.  It was a dark Saturday afternoon.  And that blade had gone through, and the X-rays revealed that the tip of the blade was on the edge of my aorta, the main artery.  And once that's punctured, your drowned in your own blood -- that's the end of you.  It came out in the New York Times the next morning, that if I had merely sneezed, I would have died."
• It is amazing to me that one can be so close to death that something as small as a sneeze could kill you.  Little things can make a huge difference.  I find that this is true in a variety of aspects of my life.  Look out for the little ways in which you can help to make the world better.
• Remember Our Influence on Others - "Dear Dr. King, I am a ninth-grade student at the White Plains High School ... While it should not matter, I would like to mention that I'm a white girl.  I read in the paper of your misfortune, and of your suffering.  And I read that if you had sneezed, you would have died.  And I'm simply writing you to say that I'm so happy that you didn't sneeze."
• Perhaps obviously, the above is a letter that MLK mentions that he received while he was recuperating in the hospital after being stabbed, and what it illustrates to me is that each and every one of us has an influence.  Whether it is a national influence as Dr. King had, or whether it is a local influence, there is someone in our lives that cares about us in some way (if you think there isn't, I invite you to visit the community that has grown around Postsecret).  And if somebody cares about you, you definitely influence them in some way.  How are you using that influence?  Are you using that influence to make the world better?  If not, why not? 
• Remember We Won't Be Here Forever - "Like anybody, I would like to live a long life.  Longevity has its place.  But I'm not concerned about that now.  I just want to do God's will.  And he's allowed me to go up to the mountain.  And I've looked over.  And I've seen the Promised Land.  I may not get there with you.  But I want you to know tonight, that we, as a people, will get to the Promised Land!"
• Due to the fact that he was murdered the next day, it seems amazingly prescient for MLK to include this line in his speech.  He realized that, as a matter of simple biology, he would not live forever.  The kicker is that neither will you, and neither will I.  If we're lucky, we get 60 or 70 goods years on this earth.  During that time, we can do amazing, even impossible things, or we can live lives of quiet desperation.  Most of us fall somewhere in between those extremes, of course.  I want to encourage every person reading this to remember that our lives are as big or as small as we make them.  Dream big.  Make the world better.
• Remember to Find Humor at our Own Expense - "Thank you very kindly, my friends.  As I listened to Ralph Abernathy and his eloquent and generous introduction and then thought about myself, I wondered who he was talking about."
• Though this quote comes from the beginning of the speech, I thought it was best to end this list on a lighter note.  At this point in his life, MLK was arguably the most famous and influential that he would ever be in his lifetime.  Even so, after his friend introduced him, he took an opportunity to poke fun of himself by suggesting that he couldn't have been so person who was spoken so well of by others.  This quote suggests an air of humility to MLK, and it makes me wonder how much better the world would be if everybody could adopt this mindset.  The world is full of people who insist that their way is the best way and that every other way is worthy of scorn.  The great joke to me is that there are seven billion people, and not one can say with 100% accuracy what will happen after we die.  Many (myself included) believe they know, but nobody knows for sure.  If that simple fact doesn't humble you, I'm not sure anything will.

What do you think?  Did these quote remind you of other things you already knew?  Let me know in the comments.

Photo by Ron Cogswell.

Friday the 13th Links

"Ugh...my tights are so tight, and yet I yearn
for a double western bacon cheeseburger.
What to do?  WHAT TO DO!?!?!"

Carrie at Careful Cents resolved not to let other people treat her like an ATM.  I say, once she has their PIN numbers, she should wreak some havoc on their accounts!

Money Spruce suggested five reasons to give up on goal-setting.  But I love hearing the announcer scream, "Gooooaaalll!"

This article from SF Weekly spelled out how difficult a job it is to be a stand up comedian.  I know that the prevailing attitude among people with steady jobs is that people with less steady jobs should have made better choices.  I'm sure happy that some people forego that which is safe to entertain and inspire us.

Frugal Confessions talked about how her health insurance rewards her for making good decisions (like not being a stand up comedian).

Mr. Money Mustache discussed how buying bigger pants won't help you lose weight.  His argument is about how the incentive of not wanting to wear tight pants will make you think twice before eating that double cheeseburger.  Obviously he doesn't know how much I love beef and tight pants.

She Owns It described 8 ways to turn your passions into profits. 

Wisebread wrote about the tyranny of stuff.  This article inspired me to own less, and I'll have a post in the next couple of weeks with specifics.

Minting Nickels described why two emergency funds are better than one.  Surprisingly, it's not just because you will have saved twice as much money with two emergency funds.

Finally, Baker at Man vs. Debt revealed that he didn't make a lot of money last year.  I guess that just goes to show how trying to make the world a better place by helping people get over their serious problems doesn't make a lot of sense.  He should totally have gotten a degree in economics or something so that he could have become a Wall Street robber baron.  What a sap!

Photo by Lancellotti Michele.

Dieting Is NOT Frugal

Let's face the facts here, kids: dieting isn't frugal.  At first blush, this may seem to be counterintuitive.  After all, if you're dieting, you are ostensibly eating less.  If you're eating less, you're paying less for food, right?

If only it were so easy.

For a variety of reasons, my wife and I have decided to give the Paleo diet a shot (as appealing as a massive heart attack sounds, we think dieting is a better choice).  If you're unfamiliar with this one, the idea is to eat foods that cavemen would have eaten.  With this in mind, the focus is on fresh fruits, veggies, and meats, and we're supposed to avoid carbs, dairy, and various other sundry items that I'm still learning about (the diet is also surprisingly against beans and chili peppers ... does this make the diet racist?*).

In an effort to stock up on foods for the diet, on Monday night, my wife and I went to a local grocery store whose specialty is organic foods.  I estimate that we probably only purchased enough food for 3-4 days, and it cost us approximately $120.  Bear in mind, this is just enough food for the two of us; we don't have children or other family members that we need to feed. 

Using the estimate above of $120 being enough to purchase food for two people for four days, a month of eating (rounded down to 28 days) will cost us $840.  This assumes that we eat all meals at home.

Now, contrast that figure, if you will, with the cost of fast food for the same time period.  If my wife and I had instead opted to go on the "Jack in the Box Value Menu" diet, I estimate that each meal would have cost us $8 ($4 for me, and $4 for her).  If we assume three meals a day for 28 days, we come to a figure of $672, a figure nearly $170 less than what we're paying for fresh foods.  That's over two grand a year!

One has to assume that the extra money that I'm spending now will be made up for in lesser medical costs in the future, but still!  I want my extra bucks now!  (Also, even though I'm not feeling really deprived so far on the diet, I could sure go for a stack of the awful and delicious Jack in the Box tacos right about now.)

I suppose part of the price difference comes from the fact that this was our first time trying to buy foods specifically for the diet.  I anticipate that as the diet goes on, we'll get a little better at buying when things are cheaper, so I'm hoping that in the long run, our costs will go down.

For any dieters out there, how do you find a balance between buying healthy food and not spending a lot of extra money?  Let me know in the comments.**

*In reality, I do kind of question this.  In one of the books about the diet, it suggests that non-caucasian people tend to be lactose intolerant because they haven't had as much evolutionary time for their bodies to adjust to lactose, which seems to imply to me that the book's authors think non-caucasians are less evolved than caucasians.
**After I wrote this post, I remembered that Annabelle over at Shopping Detox had already written a post about the frugality of the Paleo Diet.  I'm still publishing my post though, because, you know, I'm a hack.

Photo by Lauren Manning.

This post was featured in the Carnival of Personal Finance #344 at Diva in Debt.

The 10 Pound Challenge

Hey all, if you're like me, and you're trying to shed some extra poundage, you should consider becoming a part of the 10 Pound Challenge being put on by Newlyweds on a Budget.  A lot of suckers nice people (myself included - I'm giving away 25 big ones!) are sponsoring cash prizes for people who manage to lose at least 10 pounds.

If you don't have 10 pounds to lose, stop judging me, swan!  Also, go eat a sandwich or something.

Friday Links

Annabelle at Shopping Detox inducted Zooey Deschanel into her Frugal Icon Hall of Fame.  I used to think Zooey could be a little more frugal with her use of crazy voices, but I don't think so anymore. Not after the absolutely hilarious sex scene she did on New Girl a few weeks back.  I'd link to it, but ... learn how to use your own internet.

Ginger, of Girls Just Wanna Have Funds fame, wrote an article about taming our financial Achilles' heels.  I just recently wrote about one of my own weaknesses, but a newer one involves purchasing large quantities of glossy 8x10 signed headshots of Zooey Deschanel.

Kelly at Cordelia Calls It Quits reminded us that if we say we want something, but we don't take steps towards achieving what we want, then we don't really want that thing very much at all.  I wanted one of the walls of my condo pasted with headshots of Zooey Deschanel, so I bought them.  I'm living the dream over here, people.

Finally, Ninja over at Punch Debt in the Face wrote about how he effectively turned down a $14,000 raise by not moving into a relative's retirement home where he and the mrs. could live free of charge.  I wonder how much I'll need to pay in rent when my wife kicks me out after discovering my Zooey Deschanel wall?  I guess I'll cross that bridge when I come to it.

A Frugal Confession

Brothers and sisters, I feel compelled to make a confession.  You see, I've developed something of a bad habit.  There is an area of my spending that I have allowed to go unchecked, and I think that it's time to come clean about it.

I love to buy clever t-shirts.

I just found this shirt, and I'm dying to buy it.
If you get both references, I'm probably in love with you,
as you're probably my wife.

Whether the shirt comes from Woot, Tee Fury, Threadless, or any of the other myriad t-shirt sites that are represented at Shirtoid, if I love that which was referenced, it's very hard for me not to log in and buy that shirt lickety-split. 

It doesn't help my mindset that many of these sites only offer a particular design for 24 hours, thus making me feel like I will ABSOLUTELY MISS OUT by not buying it right away.  It's not uncommon for me to purchase five or more t-shirts in any given month.

The thing is, each shirt doesn't cost a lot of money.  Particularly at Woot, I can buy a t-shirt for $10 (which includes shipping).  Still, I am realizing that these $10 chunks add up.

You know what?  I think it's time to slow down.

In part, this realization stems from a recent commitment I've made to lose some weight.  While practical advice for buying clothing even during weight loss is simply to buy your correct size, I've got plenty of shirts that I can wear right now.

I want to have fun stuff to wear when I'm a smaller dude.

As such, I'm putting my t-shirt buying on a limit.  My limit is that I will only allow myself the purchase of two t-shirts in any given month.  I will also allow myself to "bank" shirts from one month to the next if I don't actually buy two.  This will leave me spending closer to $20 a month, as opposed to the $50 or more that I have been spending.  When I get closer to my ideal weight, I'll probably allow myself to spend more (as I will need plenty of new clothes).

How about you?  What small spending habits have you realized really add up over time?  Let me know in the comments.

**This post was featured in the Carnival of Personal Finance.**

For Every Thing, There Is a Season

"Life can only be understood backwards, but it must be lived forwards." - Soren Kierkegaard.

For me, the new year provides a good opportunity for reflection.  The sheer number of resolutions that people make (including myself) is testimony to that fact.   So, in the spirit of the time of the year, here's something that has been on my mind lately.

When thinking about money, the prudent or the smart thing to do is often to focus on the future.  Did you receive a sudden windfall?  Make sure to invest it.  Are you contributing enough to receive the maximum match from your company's 401k program?  If not, are you looking forward to eating primarily cat food in your golden years?

Get your dirty mitts off my Meow Mix.

While the above, in general, is absolutely sound and worthwhile advice, it poses a simple problem: we each only exist right now.  While your future self will be thankful for a comfortable retirement, if you always deny yourself present happiness, I can't help but think that that same future self will look back on a life that was hardly lived.

So, what am I suggesting?  Am I suggesting an "Eat, drink, and be merry, for tomorrow we die" mindset?  Hardly.  In fact, focusing too much on your happiness today will come at the cost of a less secure retirement. 

All that I'm saying is that it is fine to splurge once in a while.  What I'm suggesting is a balance between your present and future happiness (your past, having already been lived, is unchangeable).  Inasmuch as your happiness is tied to the things that you own or the things that money allows you to do, make sure to have some fun once in a while.

We only get to live once, after all.  We may as well have some fun once in a while.

Picture by PugnoM.