By Peter Anderson26 Comments – The content of this website often contains affiliate links and I may be compensated if you buy through those links (at no cost to you!). Learn more about how we make money. Last edited November 17, 2017.
My Lending Club account has continued to show good returns despite the fact that this month I had another loan go late. My net annualized return is still above 12% (which was my goal to reach a year or so ago), and thankfully the loans that have gone late have already repaid more than 3/4 of their loan principal, so I wouldn’t be losing as much as some other loans if they do in fact default.
Lending Club has continued their growth and they have now issued $775,060,475 in loans to date. Others have mentioned that they think they will have originated in excess of 1 billion in loans by the end of the year. I think that might be possible.
So just what are people using the loans from Lending Club for? Mainly for debt consolidation, as over 70% of people are reporting that they are using the loans to pay off debt or consolidate credit cards. I can get behind a goal of paying off debt or credit cards – as long as people are actually getting their situations under control.
Returns Down Slightly At 12.02%
Over the past month or so since my last Lending Club report, where I surpassed 12% net annualized returns for the first time, I’ve seen my returns show a slight dip from 12.06% to 12.02%. The reason? I think it’s because I’ve had another loan go late, and the two loans already late are still working out payment options. Hopefully they’ll get back on track.
Net Annualized Return of 12.02%: Down from 12.06% in June, but still up from 11.98% in May, 11.61% in early April, all the way back to 10.53% in July of last year. My returns remain above 12% as I add new higher risk loans to my portfolio.
Number of defaults.. one, with 3 new late: I’ve got one charged off loan on my account. Over the past couple of months I’ve had two loans that have been a bit behind, a grade A loan, and the other a grade D loan. They’re still late this month but have made arrangements for payments. Unfortunately there is one more new late loan this month, a grade B loan. Once again the few issues I’ve had have tended to be on higher graded loans. Go figure.
Thirty two loans have been paid off early: Eleven were A grade loans, ten were grade B loans, seven were C grade, three grade E and one F. Looks like grade A and B loans are more likely to get paid back early, reducing returns. Another reason why I’ve started investing in more higher grade loans.
My account balance increasing, re-investing returns: I currently have $2,851.14 in my account, with $80.15 of that ready to re-invest.
I’m diversified by investing small amounts across multiple loans: I’ve had 185 loans since joining (148 issued and current loans, 32 paid off), with no more than $25 in each loan. In other words, I’m diversified across a decent amount of loans, lessening my risk from any one loan going into default or getting charged off. Of course to be fully diversified I believe Lending Club recommends 800 or more notes. I’m not there yet.
NOTE: 83.17% of Lending Club investors with 100+ Notes earn returns between 6% and 18%. 100 Notes can be purchased with a minimum investment of $2,500.
What’s Your Actual ROI?
When you’re looking at the numbers on the Lending Club and Prosper sites, it has been pointed out time and again that their numbers are overly rosy view of what your actual return on investment will be. The ways that they calculate the ROI isn’t really standardized, and they don’t take into account how old your loans are, possible future default rates, or other things that may become a factor. The numbers they show are just something you have to take or leave.
A site that I discovered a while ago that gives what I think is a better picture of the actual ROI you can expect is Nickel Steamroller’s Lending Club portfolio analyzer. Basically the analysis tool with give you an estimated ROI after you download all your notes from your Lending Club account and upload the .csv file. It will go through you notes and give sell recommendations, show duplicate notes and highlight notes that are below Lending Club’s average return (so you can sell them on the secondary platform). It will even give you a fun little map showing where your loans are (see mine above).
In looking at my returns on the analyzer, my actual return according to the site will be closer to 10.96%. It also gives me quite a few sell recommendations, particularly on some of my older lower interest loans that I did when first starting out. Those particular loans tend to be grade A or B, and have interest below 8%.
Evolving Lending Club Strategy
Here’s the basic strategy I’ve been using with Lending Club since I started investing. The strategy has changed a little bit over time to include more low grade loans and a few loans with higher balances.
Less than $10,000: I believe I’ll still be sticking with mostly loans below $10,000. Lower amounts mean higher likelihood of payback of the loan.
Zero delinquencies: Again, I may fudge slightly on this one, but I still want it to be very few or zero delinquencies.
Debt to income ratio below 20-25%: I like to invest in loans where the borrowers have a lower DTI ratio, and preferably have higher incomes. I’ll try to keep this as is.
Good employment history: I like loans with a decent employment history of at least 2 years, and a decent income.
So that’s what I’m doing with my Lending Club portfolio right now, and how I’m investing.
Not ready to invest, but looking to consolidate debt or pay off a high interest credit card? You might want to consider borrowing from Lending Club. Check out my post on borrowing from Lending Club.
Are you currently investing in Lending Club? How are your returns looking? Tell us in the comments!
Most employees have to submit expense reports at some point — be it for out-of-town travel, client dinners, special events, or other expenses you incur due to your job responsibilities. Keeping track of these expenses is important, otherwise you’re losing money while on the job and probably not endearing yourself to your company’s finance department, which relies on accurate records and timely reports from employees.
It seems straightforward enough to track your expenses, but I’ve personally known employees who have lost receipts and didn’t get reimbursed, failed to get reimbursed because they didn’t understand that an expense was reimbursable, or missed the deadline to turn in the paperwork. In all three cases, the employee paid for a company expense with their own money. Not good at all! The situation can easily be avoided with some basic steps to make sure company expenses don’t affect your bottom line.
Know the Policies
Request a copy of your company’s expense reimbursement policy, and make sure you understand the guidelines about the following:
Methods of payment. Can you use a company credit card? If not, will you pay out of your own pocket, or can you request a cash advance?
Reimbursable expenses. What are the allowable expenses? Typically these are transportation, mileage, meals, lodging, etc. What are the allowable limits? You’ll probably have a certain amount you can spend on meals each day, for example.
Non-reimbursable expenses. Know what isn’t covered by the company. For example, most companies will pay for meals, but not alcoholic beverages.
Documentation. Do you need to submit receipts? What about tracking mileage? Know what documentation you’ll need to accompany your expense report paperwork.
Filing deadlines. How soon must you submit your paperwork to get reimbursed?
Finally, print out a copy of the expense reimbursement form so that you have a clear understanding of what you’ll need to complete it. If something doesn’t make sense about the form or the policies, now is the time to ask for clarification from your boss.
Tip: Leave the form on your office chair to remind yourself to fill it out as soon as you’re back at your desk.
The Envelope Method
Let’s say you are going out-of-town to work at a company event. A simple, low-tech way to organize yourself is with a plain business envelope. Here’s how it works:
If you received a cash advance, place the cash inside the envelope.
If you need to track mileage, draw a mileage box on the outside of the envelope with a column for the date, starting mileage, and ending mileage.
Draw another box for tips, with a column for the date, amount, and the reason for giving the tip. This is for incidentals that might not have a receipt, like a housekeeping tip of $5 or tipping the hotel staff for moving heavy items.
When you receive a receipt for a business expense, mark which items you’ll submit for reimbursement (for example, a fajita meal, but not the margarita). Also write down the purpose of the expense, such as paying for a round of golf for a client and business partner, and the tip amount. Usually dates print out on the receipt, but if it’s not on there, write that down, as well.
Place all receipts in the envelope.
It sounds simplistic, but every time I’ve done this, I’ve found it easier to get my expense report turned in on time. When I don’t do it, I have to hunt down receipts in bags, pants pockets, and purses, then figure out where that $5 went that I forgot I used to tip hotel staff.
Don’t Wait to File
File your expenses the day you return to the office. To be honest, I don’t always do this. But it’s the best way to ensure that you’ll remember any details you might not have written down and that you’ll get your paperwork turned in before the deadline. There are tax laws and company policies about reimbursements, so don’t wait and risk losing receipts or forgetting about submitting them until it’s too late.
I’m going to take my own advice and complete my expense reimbursement form from a business trip last week before I can even think about procrastinating! In the meantime, let’s hear about your own methods for tracking reimbursable expenses. What are your tips for keeping business expenses organized?
One would think that short-term goals are pretty easy to accomplish. Oh, really?
Think again. Short-term goals can be easily put off for a plethora of reasons. Research suggests this as 91% of people fail on their New Years’ resolutions.
When it comes down to getting short-term goals done, including short-term financial goals, one must implement some strategies to stay on task and on schedule.
Let’s start out by discussing some strategies for achieving important short-term goals and then move onto some short-term financial goals that are worth your time and effort.
Grab your notepad, you’re going need it!
What’s the Difference Between Short-Term and Long-Term Goals?
Goals can have different timelines attached to them. For example, a short-term goal may take months or even years to achieve, whereas a long-term goal may take 5-10 years or more to reach. It’s important to be realistic about how much time you need and plan accordingly in order to make sure you can stay on track with your objectives.
Additionally, breaking down each goal into smaller steps can help make the goals feel more achievable. It may also be helpful to track your progress and celebrate successes along the way! More on that in a sec.,,
How to Achieve Important Short-Term Goals
A short-term goal is a goal that shouldn’t take you long to complete. Generally, I would define a short-term goal as a goal that takes roughly less than a year to complete. Many times, these goals only take a month or a few weeks. They could only take a day or two.
Short-term goals usually have a very clear path toward their completion. You know exactly how you’ll accomplish your goal – every step you’ll need to take. You can break the goal down into smaller pieces and then track your progress along the way.
It’s crucial that each of your short-term goals follow the “SMART” goal format.
What Are Smart Goals?
Setting goals can be daunting, but with the SMART framework, you can turn your aspirations into achievable objectives that will help you make meaningful progress towards your dreams! SMART stands for Specific, Measurable, Achievable, Relevant, and Time-bound.
Think of SMART as your goal-setting BFF! When you have a SMART goal in mind, you know exactly what you want to achieve, how you will measure your progress, and when you will achieve it. Whether you want to improve your finances, health, or personal growth, SMART goals can help you stay focused, motivated, and accountable.
SMART Goals
Stands For:
Specific
Clear and well-defined objectives
Measurable
Goals that have quantifiable targets
Achievable
Goals that are realistic and feasible
Relevant
Objectives that align with your values
Time-bound
Goals with specific deadlines
Unfortunately, even when you know exactly how you’ll accomplish your goal, there are a number of circumstances that can get in the way. Let’s explore how to push through these difficulties and find success.
1. Find your daily energy peak and schedule accordingly.
Unless you’re like The Rock and have seemingly unending energy and strength, your productivity will rise and fall during the course of a day. I know, you didn’t like me telling you that, but someone had to, right?
Short-term goals are best made progress on during the times of day you have high to moderate energy. If you’re saving these goals for the times of day when you’re in a slump, let’s face it: you’re probably not going to get ‘er done. Save the low energy times for leisurely activities.
Okay, so how do you find your daily energy peak? Here’s what I recommend . . . .
Set a recurring alarm when you first wake up for every 30 minutes. Every time the alarm goes off, rate your energy level on a scale of 0 (being no energy) to 10 (being high energy) in a notepad or on graph paper. You can do this for one day or you can do it for a week and average out the results.
This will allow you to see how your energy level changes throughout the day and will allow you to make better decisions regarding how you allocate your time and tasks.
I would recommend working on your short-term goals during the times of day that your energy level is a “5” or higher.
I remember when I first started this blog I was a night owl and had the most energy as the sun was going down. Today, I find mornings work better for me. The lesson? Make sure you adjust your tasks to your changing energy levels. Who knows, you might make a radical shift like me over time.
2. Work on one short-term goal at a time.
I have no idea why multitasking is so praised in our culture. Multitasking, in my opinion, slows people down and produces poor results. It’s much better to work on one short-term goal at a time.
Besides, these are short-term goals – not long-term ones. You’ll be able to get them done pretty quickly and move on to other tasks in short order.
Of your short-term financial goals, it might be worthwhile to work on the quickest short-term goals first – the ones that take the least amount of time. This will give you a few quick wins, which should motivate you to press on.
3. Eliminate distractions soldier!
During my time in the Army National Guard, I learned how to focus. In battle, there’s nothing worse than not keeping your head in the game. When enemies are nearby, it’s critical that you stay on task and don’t daydream. There are plenty of distractions in battle – some of which are set by the enemy – and they need to be avoided.
When you’re working on your short-term goals – including financial goals – you should eliminate any distractions.
When you’re working at home, there are plenty of distractions. If you have kids, you know what I mean. Now, kids are a great distraction, but you should be very careful to make sure they don’t pull you away from your other obligations.
For example, let’s say you have a monthly budget meeting with your spouse. Instead of having the meeting when the kids are running around throwing toys at you, it’s probably best to wait until they go to bed.
Other potential distractions include technology. Yes, while technology can help you accomplish your financial goals – like analyzing your investments with Betterment or Personal Capital – it can also send you alerts that aren’t relevant to the task at hand (like text notifications from your second great aunt Martha).
How do you eliminate technological distractions? Well, if you have Apple devices, it’s pretty easy to do so. On your iPhone, turn on Do Not Disturb. You can do the same thing on your Mac. This way, you can focus in peace and get some work done!
4. Dig deep to find your motivation.
Just like when you’re working on long-term goals, you need to dig deep to find your motivation for short-term goals.
Why do you want to start a budget, for example? If you don’t have a good enough reason or reasons, trust me, the number-crunching will get old fast and you’ll probably give up before you develop a working budget.
Imagine the benefits, for example, of creating a working budget. How will it improve your relationship with your spouse? How will it keep you on track with your long-term financial goals? You’d be surprised by how many motivations you can find for even the most seemingly mundane short-term financial goals.
Important Short-Term Financial Goals
Alright, you’re all geared up. You have some strategies for achieving your short-term financial goals, but which goals are worth your while? That’s what we’re going to talk about next, partner.
1. Create a budget.
Surprise! Just kidding. You probably guessed this one.
The truth is that a working budget is the cornerstone of any good financial plan. A proactive budget not only tells you what you’ve spent, but it tells you what you should and should not spend – that’s huge.
Over time, by working your budget, you’ll find ways to cut your expenses and discover new motivations for raising your income.
2. Create a system to pay your bills on time.
Thanks to technology, there are all kinds of ways to pay your bills. You might pay through your bank’s online bill-pay feature, you might pay through the merchants’ websites, you might pay using your debit or credit card, you might pay with checks – or you might pay with your smartphone!
Chances are, you’re using a variety of methods to pay your bills. But do you have a solid system in place? How will you know if your credit card expired and a merchant can’t pull money through auto-pay? Are you trusting the banks and merchants to let you know when your card is about to expire?
Sure, that might work. But perhaps it would be better to put everything into a spreadsheet so you can keep track of all of your bills and how they’re paid. You can also create reminders to pay in your favorite app!
3. Get appropriate insurance policies for your family.
Do you have life insurance? Disability insurance? Umbrella insurance? How about renters insurance? These policies are commonly overlooked.
Find the best insurance and make sure you’re covered.
Short-Term Goal Examples
If you’re looking for real life short-term goal examples, you’re in luck! I polled some fans on the Good Financial Cents Facebook page and here’s some of the best ones:
Joseph Hogue from PeerFinance101.com shares his goals:
Launch 4 short-format investing books as series in December
Publish three posts per week to each blog
Financial goals
Rebalance my portfolio allocation heading into my 40s. Still a year off (and I don’t generally try timing) but after almost 7 years of a bull market, will rebalance a year earlier and shift to new allocation
Buy and renovate another rental property (in Medellin, Colombia)
Life goals
Use social media more for personal connections and less for business (I realize the irony as I post this under my blog account)
reconnect with a couple of high school friends
start a hobby that isn’t related to personal finance or crowd-funding
Kate Dore from Cashville Skyline offers:
Reach $200K net worth by the end of 2025.
Renovate my basement to rent on Airbnb.
Earn $10K side income before next year’s FinCon.
Lose 20 pounds 🙂
Jacob Wade from iHeartBudgets.com shares his ambitious short-term goals:
Finish Kitchen Remodel by end of 2022
Pay Off Student Loans by end of 2022
Launch online course for blog in March/April 2023
MAX out Roth IRA for my wife and I in 2023
Remodel Master bath in 2023
Build deck/patio in backyard in spring 2023
Build raised bed gardens in side yard in April 2023
Get my butt into shape! Start in T-25 workout plan again
Those are some good examples of short-term goals. Here are some other examples you can use to kickstart your own short-term goal ideas:
Financial Goal
Specific
Measurable
Achievable
Relevant
Time-bound
Emergency fund
Save $10,000 in a high-yield savings account
Yes
Yes
Yes
By age 30
Retirement savings
Contribute at least 10% of your annual income to a 401(k) or IRA account, aim for $100,000 in retirement savings
Yes
Yes
Yes
By age 30
High-interest debt
Pay off $5,000 of credit card debt
Yes
Yes
Yes
By age 30
Credit score
Improve credit score to 750 or higher
Yes
Yes
Yes
By age 30
Budgeting
Create a monthly budget, track spending, and save $5,000
Yes
Yes
Yes
By age 30
Education and career
Invest in education or career development
Yes
Yes
Yes
By age 30
Investing
Invest $5,000 in stocks, mutual funds, or other investments
Yes
Yes
Yes
By age 30
Home down payment
Save $20,000 for a down payment on a home
Yes
Yes
Yes
By age 30
Estate plan
Create a will and estate plan
Yes
Yes
Yes
By age 30
Living below your means
Reduce expenses by 10%, increase savings rate by 5%
Yes
Yes
Yes
By age 30
How I Keep Track of Short-Term Goals
My short-term goals fall into two categories: Quarterly (90 day goals) and weekly goals. Each quarter I list out my goals and then make sure my weekly goals stay on point to achieving those goals.
One easy way I’ve recently implemented of staying on point is creating my weekly goals Sunday night. I’l create a note on my iPhone, but that’s only the half of it.
I then take a picture (screenshot) of my weekly goals and make that the lock screen on my phone. That way every time I turn my phone on I see the top 4-5 goals I need to accomplish that week. Here’s how it looks on my phone:
You’ll also notice I list my daily reminders of my Success Habits I do each day.
These include doing The Love Habits with my wife, writing in my Five Minute Journal, knocking out 50 push-ups, praying, and completing my Crush Your Day PDF (from my 10x Goals Accelerator course) before I go to bed.
I’ve taken achieving my short-term goals to the next level because of this powerful combination.
The Bottom Line – Short-Term Goal Examples
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So, there you have it! Setting short-term goals is an excellent way to achieve your long-term vision, improve your skills, and build momentum towards success.
By following the SMART framework, you can turn your aspirations into actionable steps that will help you make meaningful progress towards your dreams. Remember, short-term goals don’t have to be boring!
Whether you’re learning a new skill, connecting with new people, or saving up for a fun adventure, short-term goals can be exciting and fulfilling.
So, what are you waiting for? Grab a pen and paper and start setting some short-term goals today!
FAQs – Short-Term Goals
Why are short-term goals important?
Short-term goals are essential for several reasons. They provide a clear direction and purpose, help you break down larger goals into smaller, manageable steps, build confidence and self-efficacy, and improve your overall productivity and performance.
How do short-term goals relate to long-term goals?
Short-term goals are an essential component of achieving long-term goals. They help you break down larger objectives into smaller, more manageable steps and build momentum towards achieving your long-term vision. By setting and achieving short-term goals, you can stay motivated and focused, improve your skills and habits, and make progress towards your ultimate goals.
How do you prioritize short-term goals?
Prioritizing short-term goals depends on your personal preferences, needs, and circumstances. Consider which goals are most urgent, important, or aligned with your long-term vision. Prioritizing goals helps you focus your time, energy, and resources on the most critical objectives and avoid getting overwhelmed or distracted.
How many short-term goals should you have at once?
The number of short-term goals you should have at once depends on your capacity and workload. It’s generally best to focus on a few goals at a time to avoid getting overwhelmed or losing focus. Prioritize your goals based on their urgency, importance, and relevance to your long-term vision.
By Peter Anderson9 Comments – The content of this website often contains affiliate links and I may be compensated if you buy through those links (at no cost to you!). Learn more about how we make money. Last edited November 17, 2017.
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My Lending Club account has been kind of hands off the last couple of months, with no new loans being bought or sold. The good news is that my returns are continuing to improve. My returns are now up to 11.93%, getting close to the 12% I said I was looking for a while back. By moving away from purchasing only A and B grade loans, and selectively choosing more C, D and F grade loans I’ve been able to boost my returns significantly. Hopefully next month I’ll be over that 12% hump.
Lending Club continues their steady growth, as they added an another 42.1 million in new loans for April 2012. From SocialLending.net
When you look at the numbers Lending Club issued almost $42.1 million in new loans this month. The total number of new loans was up substantially (over 10%) from last month with 3,230 loans issued. This meant for the second month in a row their average loan size reduced – in April it was $13,019. The total loans issued since inception is now around $612 million and with eight months left in the year it is clear that Lending Club will cross over $1 billion in total loans before the end of the year.
Lending Club has continued to show strong growth, and should be able to cross $1 billion in total loans by the end of the year. I think that goes to show that they aren’t just a flash in the pan. Peer to peer lending is here for the long haul! Prosper has also continued to show growth as well, and may be worth a second look by investors.
Social Lending Video Course
Also this month Peter Renton of SocialLending.net has relaunched his peer to peer lending training video course. The course goes over the social lending sphere in depth, talks about how to maximize returns and gives some of Peter’s best investment strategies to help you succeed. The course is well worth the cost, and worth a look if you’re interested in maximizing your returns with P2P Lending.
More Details + Video Overview Of Peer to Peer Lending Wealth System
Returns Now At 11.93%
A week or two ago I started looking at my Lending Club account for 2011 tax purposes. Trying to figure out your taxes when it comes to Lending club can be extremely confusing as the reporting processes can vary depending on how much you’re investing in each loan, how your interest income will be reported, etc. If you’re as confused as i was when I started looking at it, check out my post on Lending Club and taxes.
A couple of months ago I had my first charged off loan. It was disappointing to see my perfect record of no charged off loans go down the tubes, but it wasn’t completely unexpected. With as long as I’ve been investing with Lending Club I would have expected at least 1 or 2 charged off loans a while ago. Here’s a look at my account to date:
Net Annualized Return of 11.93%: Up from 11.61% in early April, 11.44% in February, all the way back to 10.53% in July of last year. It continues showing progress.
Number of defaults.. one, with 2 new late: A few months ago now I had my first charged off loan, a Grade B loan. It’s interesting that the loans I’ve had either go late or get charged off have mostly been the higher grade loans. I’ve now got two more late loans, one of them a grade A loan, and the other a Grade D loan. The grade A loan is thankfully almost all paid off already, so even if it gets charged off my losses would be minimal. The grade D loan that’s late is about 1/2 paid off by now, and is already on a payment schedule to hopefully get them back on track. We’ll see.
Twenty seven loans have been paid off early: Ten were A grade loans, eight were grade B loans, six were C grade, two grade E and one F. Looks like grade A and B loans are more likely to get paid back early, reducing returns. Another reason why I’ve started investing in more higher grade loans.
My account balance increasing, re-investing returns: I currently have $2,777.11 in my account, with $170.87 of that ready to invest. I’ll get around to re-investing that money soon.
I’m still diversified by investing across a large number of loans: I’ve had 169 loans, with no more than $25 in each loan. In other words, I’m diversified across a large number of loans, lessening my risk from any one loan going into default or getting charged off.
NOTE: Did you know that 100% of investors who have invested in 800 notes or more had positive returns. Not too shabby, not everyone in the stock market can say that!
What’s Your Actual ROI?
When you’re looking at the numbers on the Lending Club and Prosper sites, it has been pointed out time and again that their numbers are overly rosy view of what your actual return on investment will be. The ways that they calculate the ROI isn’t really standardized, and they don’t take into account how old your loans are, possible future default rates, or other things that may become a factor. The numbers they show are just something you have to take or leave.
A site that I discovered a while ago that gives what I think is a better picture of the actual ROI you can expect is Nickel Steamroller’s Lending Club portfolio analyzer. Basically the analysis tool with give you an estimated ROI after you download all your notes from your Lending Club account and upload the .csv file. It will go through you notes and give sell recommendations, show duplicate notes and highlight notes that are below Lending Club’s average return (so you can sell them on the secondary platform). It will even give you a fun little map showing where your loans are (see mine above).
In looking at my returns on the analyzer, my actual return according to the site will be closer to 10.74%. It also gives me quite a few sell recommendations, particularly on some of my older lower interest loans that I did when first starting out. Those particular loans tend to be grade A or B, and have interest below 8%.
Evolving Lending Club Strategy
Here’s the basic strategy I’ve been using with Lending Club since I started investing. The strategy has changed a little bit over time to include more low grade loans and a few loans with higher balances.
Less than $10,000: I believe I’ll still be sticking with mostly loans below $10,000. Lower amounts mean higher likelihood of payback of the loan.
Zero delinquencies: Again, I may fudge slightly on this one, but I still want it to be very few or zero delinquencies.
Debt to income ratio below 20-25%: I like to invest in loans where the borrowers have a lower DTI ratio, and preferably have higher incomes. I’ll try to keep this as is.
Good employment history: I like loans with a decent employment history of at least 2 years, and a decent income.
So that’s what I’m doing with my Lending Club portfolio right now, and how I’m investing.
Not ready to invest, but looking to consolidate debt or pay off a high interest credit card? You might want to consider borrowing from Lending Club. Check out my post on borrowing from Lending Club.
Are you currently investing in Lending Club? How are your returns looking? Tell us in the comments!
Editor’s Note: Lending Club no longer offers peer-to-peer lending on it’s platform.
Peer Lending Server is a completely automated investment solution for peer-to-peer (P2P) loan investing. It works with only one of the P2P lending sites, Lending Club, and runs on Windows, Mac or Linux. At least part of what makes Peer Lending Server unique is the focus on loan underwriting. This process can be done in a fraction of the second as soon as new loans are listed.
How Peer Lending Server Works
You can download and install the Peer Lending Server Virtual Box that is designed for your operating system. You start by installing Peer Lending Server, and only then do you add your Lending Club API information and program options. From there, you can create filters that you want to use to help you in selecting loans to invest in.
The system will filter current notes, allowing you to download and browse the latest notes on Lending Club that will match your filters. With the click of a button, you can automatically invest in any and all listed loans that match your filter criteria. Any notes that you are already invested in through Peer Lending Server will of course be excluded. You can then schedule the service to automatically start filtering loans at times that you select.
The platform enables you to choose the amount that you want to invest each note, as well as the maximum notes per order. You can also choose to maintain a minimum cash level in your account.
You can also set a maximum percent of available notes to be allowed per filter, and the service will enable you to rank filter notes by a given field. This will give a higher priority to notes that meet the criteria of the highest ranking filters.
Peer Lending Server makes use of external data, which includes additional data points to determine the creditworthiness of any loan. They use statistical models that include macroeconomic data to help increase return on investment, while significantly reducing risk.
Through the use of artificial intelligence, you are able to underwrite loans quickly. Artificial intelligence deciphers complex relationships, improves efficiency and avoids errors.
The service is set to run on Pacific Standard Time, and changing your time zone is not supported or recommended. Peer Lending Server is also designed to run as a service that is always “on” , and for that reason it should be installed on a computer that will always be left on, and where sleep mode is disabled. This means you will be more likely to install it on a home-based desktop computer, rather than a laptop, since the latter is shut down frequently.
One of the major advantages of using Peer Lending Server is that since it runs through your home computer (for the reason given in the paragraph above), your password and API can be maintained privately. There is no need to share your credentials with third parties, or to wait on shared resources. The application runs on your own computer, allowing you to be “first in line” when looking for loans and notes to invest in.
Peer Lending Server offers a large number of tools and features that could improve your success as an investor on Lending Club.
Automated investing. Peer Lending Server is a complete “turn-key” investment application for Lending Club, and is Lending Club API compliant. It offers low detection, execution of saved Lending Club filters, the ability to schedule service times, and a detailed log of each transaction. It also provides configurable maximum loans per order, as well as configurable investment dollar amounts and a configurable option to disable order submission. It can enable you to maintain a minimum cash level of your choice, and to configure based on a maximum percent of notes per order allowed.
Machine learning. The system provides a sophisticated gradient hosted model for mature loan classification, as well as rapid loan prediction. Analytics provide your projected return on investment, and no technical knowledge is required.
Filters. You can use preset filters, and custom filters to match your investment strategy. Filters include artificial intelligence fields for return on investment projections. There is also extensive help included with each field – again you don’t need to be a technical genius in order to operate the system.
Peer Lending Server analytics. This includes the ability to test custom filters, instant and projected return on investment, extended return metrics, and loan status including paid, default, and late statistics. It also comes with bar charts and pie charts, as well as common field categories from multiple perspectives and views.
Ease of use. Peer Lending Server is setup to operate on a “set and forget” basis. It takes just a few steps to configure, filter and run automated investing, and you can be up and running in a matter of minutes.
Speed. Peer Lending Server describes itself as “blazingly fast”, using search and modeling technology that takes place in a small fraction of the second. This gives you the ability to make educated investment decisions while capturing the most popular investment opportunities.
Peer Lending Server Forum. The forum is actually hosted by LendAcademy.com, and has hundreds of discussions relating to both the technical aspects of Peer Lending Server as well as investment strategies to best take advantage of the system.
The platform also has a blog, however there are only about a half-dozen articles, so this feature will have very limited utility.
Peer Lending Server is Free to Use. We saved the best for last. You can’t beat the price of Peer Lending Server, because it’s absolutely free to use.
Should You Try Peer Lending Server
Peer Lending Server is one of several P2P automated investment services – robo advisors for P2P platforms. The service is completely free, so you have nothing to lose by at least trying the service. If you are an active investor on Lending Club, then you almost certainly will need to use some sort of automated investment service, and Peer Lending Server offers the full package.
Perhaps the major downside of Peer Lending Server is that it can be used only in conjunction with Lending Club and not with any other P2P platforms. But apart from that limitation, it is a full-service platform, that offers a higher level of security and quicker access to new loans, due to the fact that it is downloaded to your home computer. This gives you the advantage of immediate access to new loans, as well as eliminating the necessity to share your credentials with third parties.
Is it the best P2P automated investment service? That’s probably more a matter of preference than anything else. Each investor has to find the service that works best for him or her, and which that will be will depend upon the preferred tools and features offered by each. But given that Peer Lending Server is free, you owe it to yourself to at least give it a test run.
Save more, spend smarter, and make your money go further
Do you want to invest better? Who doesn’t? Today, September 25, is Invest Better Day, a day of investor education dreamed up by the jester-hatted money mavens at the Motley Fool.
Any conversation about investments tends to get bogged down by excruciating details, jargon, and ideology. “My portfolio is outperforming your portfolio” is the petty grownup version of “my dad can beat up your dad.”
Fortunately, most of what it takes to invest better has nothing to do with choosing the right mutual fund. I’ve put together my top five investment tips, and only one of them involves choosing the right kind of fund (and it’s plenty vague).
This is good news and bad: choosing a mutual fund is easy. You can do it online in five minutes. But investing better is more about managing human psychology and less about managing money — it’s also about avoiding big mistakes, not about choosing the single best investment.
Enough backstory. Let’s get to the list.
What’s the most important factor that determines how much money you’ll retire with?
It’s not which investments you choose — it’s how much you’ve saved along the way. A recent study by Putnam Investments confirmed this, and the math is simple: save pennies, and no amount of great stock-picking will let you retire with a boat.
Save a high percentage of your salary (especially in your highest-earning years), and you can make plenty of investment mistakes and still come out okay.
Avoid high-interest debt
As Burton Malkiel and Charles Ellis put it in my favorite investing book, Elements of Investing, “There are few, if any, absolute rules in saving and investing, but here’s ours: never, never, never take on credit card debt.”
Credit cards, installment loans, lines of credit, unsubsidized student loans: all of these are the opposite of investing. When you invest, you turn your money over to someone else and hope they’ll do something smart with it and hand back more money later.
When you borrow at a high rate, someone else is doing the same with you, minus the “smart” part. Other than getting a 401(k) match, it doesn’t make sense to save for retirement while carrying an 18% credit card balance.
Everyone is so tired of being told to get a 401(k) match that I’m not even putting it on the list. Fewer people, however, understand the massive tax savings you get from using tax-advantaged accounts like the 401(k), traditional or Roth IRA, health savings account, or 529 college savings plan.
Every time you put a dollar in one of these accounts, it’s like getting a match from Uncle Sam. Unless you’re saving for a specific near-term goal or an emergency fund, saving in a taxable account while you still have space available in a tax-advantaged account means paying unnecessary taxes. Yuck.
Automate
How do you achieve the high savings rate from tip #1? Only one way: automation. Unless you’re self-employed, your federal taxes come out of your paycheck automatically.
Why does the IRS require you to pay taxes this way? Because if people were required to set aside taxes on their own and pay once a year, most of us would spend it before April.
Indeed, the self-employed get into this mess all the time.
Take advantage of what the IRS knows and automate your own savings as much as possible: set up automatic paycheck deduction or an automatic checking account transfer (or both) to your retirement account.
Pay less, get more
Mutual funds charge you a fee for investing your money, but the fee is invisible: it comes out of your returns before you ever see it. The fee is called an “expense ratio” and it’s expressed as a percentage, usually between 0.1% and 2%.
If a fund charges 1%, that means you pay 1% of whatever money you have in the fund every year. That sounds like a small fee but it’s not. The world’s biggest and most diversified mutual funds and ETFs charge less than .2%. Low expenses are an excellent predictor of better returns.
This goes for your 401(k), too. In addition to the expense ratio for each fund, your 401(k) may pile on other management expenses.
New rules this year require 401(k)s to disclose all fees. Read your statement, and if you’re paying more than a small fraction of 1%, call your benefits office, team up with your fellow employees, make protest signs — whatever you need to do. It’s your money.
So there you are: five ways to invest better, and none of them involve picking stocks, reading annual reports, or any other form of nerding out.
Matthew Amster-Burton is a personal finance columnist at Mint.com. Find him on Twitter @Mint_Mamster.
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Eating disorders are a common mental ailment in the United States, especially with adolescent girls.
If you’ve suffered from an eating disorder like anorexia or bulimia in the past, it’s going to come up when you apply for a plan.
Regardless of your past, you can qualify for a life insurance policy. We don’t care what condition you may have suffered from, we want you to get a plan you can afford.
Life Insurance Underwriting after an Eating Disorder
As you can probably guess, they are going to ask you several questions about your eating disorder. Some of them will include:
Were you diagnosed with anorexia nervosa and/or bulimia nervosa?
How many episodes of eating disorders have you had?
When was the last episode?
Has your weight been stable for at least one year?
Do you have any other mental conditions like depression, anxiety, alcohol/substance abuse or psychotic disorders?
Are you taking any medications to help with your eating disorder?
While there are no medications to cure an eating disorder, applicants may be taking anti-anxiety or antidepressants to prevent another episode. These medications could be insurable.
Your life insurance application is your chance to show that you’ve recovered from your eating disorder and that it’s under control. Be sure to make your application as complete as possible. If your application seems to be missing information, the underwriter could get nervous and decline your policy.
Life Insurance Quotes after an Eating Disorder
Before you can apply for life insurance after an eating disorder, you’ll need to have recovered from your condition. Generally, insurance companies will want to see that you have recovered and maintained a health weight for at least a year before they will give you a policy. More time will help your rating because it means you have less risk of a relapse.
Beyond your eating disorder, they are going to review a handful of other factors. Everything from your mental health to your hobbies. To give you an idea of the rating classes, here are some basic rate classes:
Preferred Plus: Generally impossible for someone that had an eating disorder. Even if you are now in perfect health, insurance companies will still be too worried about a possible relapse to give out the best rating.
Preferred: Possible in some cases. To qualify, it needs to have been at least 4 years since your past episode and you’re otherwise in perfect health and have no other mental disorders.
Standard: This is the most common rating. To qualify, it should have been at least four years since your last episode and you are in generally good health. It may be possible to get a standard rating with small health problems like being a bit overweight or having slightly high cholesterol.
Table Rating (substandard): Applicants that apply within two to four years of their last eating disorder episode will likely get a rated policy. The longer you wait, the better your rating will be. You could also get a rated policy if you have recovered from your eating disorder but still have some other mental or health issues.
Declines: Applicants that apply while currently suffering from an eating disorder will be declined. Most applications within one year of an episode will also be declined. Your application could also be declined if you are still suffering from other mental issues like depression or you have some significant health problems that would be made worse from an eating disorder relapse.
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Eating Disorder Insurance Case Studies
What does all of this mean to you? You might be confused about the rates you’ll get. To help you make sense of all this, we wanted to share some stories of clients we’ve worked with in the past.
Case Study: Female, 32 y/o, suffered from bulimia nervosa at 23, recovered at 25, applied for life insurance at 26 and was rejected
This applicant was bulimic when she was 23. After a couple years she made a full recovery and never relapsed. Within a year of recovering, she tried applying, but she was declined. At this point, she thought her past eating disorder would make it impossible for her ever to get coverage. We showed her this wasn’t true.
We showed him a carrier that regularly deals with applicants that had eating disorders in the past. This helped because the new company was better able to evaluate her application. By applying again at 30, this applicant was able to receive a standard rating.
Case Study #2: Female, 40 y/o, suffered from anorexia nervosa in her teens, relapsed at 24, fully recovered at 26 and had no other relapses, currently taking antidepressants, in great health
This applicant was struggling with depression in her teens and this caused her to become anorexic. She recovered but then relapsed again at 24. After regularly meeting with a therapist and starting to take antidepressants, the applicant made a full recovery. Since then she has been in great health, though she still takes antidepressants and sees her therapist from time to time.
She applied and was accepted for coverage, but she got a rated plan. It’s better than nothing, but we thought she could get cheaper rates. To do this, we told her to get a note from her doctor to send to the insurance company. The letter from her doctor explained her improved health and all the changes she had made.
After she did this, she got a standard rated plan.
We show you this to give you an idea of what you can expect and to show you that you can get affordable protection, even if you’ve struggled from an eating disorder in the past.
Life Insurance with an Eating Disorder
Suffering from an eating disorder can be both physically and mentally damaging. But if you’ve overcome your eating disorder, then you can still get a cheap life insurance policy to protect your family members.
All rights reserved. Intuit and QuickBooks are registered trademarks of Intuit Inc. Terms and conditions, features, support, pricing, and service options subject to change without notice.
“Challenges and barriers continue to limit sustainable housing opportunities for minority, low-income, and senior borrowers, as well as families living in rural areas and on tribal land,” said FHFA director Sandra Thompson. “The proposed rule will help FHFA ensure that our regulated entities operate in a safe and sound manner as they comply with fair … [Read more…]
Homebuyers with good credit scores will soon be facing higher mortgage fees as the Biden administration seeks to close the racial homeownership gap and get more first-time and low-income buyers through the door.
A new federal rule could raise the monthly mortgage payments of buyers with good credit scores by over $60 a month, while riskier borrowers will get more favorable terms because their fees will be reduced.
Starting in May, the current structure of the Loan-Level Price Adjustment (LLPA) matrix will be upended by the Federal Housing Finance Agency (FHFA) in the hope of addressing housing affordability challenges in the U.S.
But there have been complaints that the rule change is unfair and potentially ineffective.
“In the short term, this may increase homeownership among the targeted group, but I’m afraid it could decrease homeownership among the middle class,” Jerry Howard, CEO of the National Association of Home Builders, told Newsweek. “I’m not sure that we’re not robbing Peter to pay Paul here.”
Only about 25 percent of homebuyers with Federal Housing Administration loans are people of color, according to the White House. Black and Hispanic people, on average, have fewer savings to use as a down payment on a home and tend to have lower credit scores, according to David Stevens, former CEO of the Mortgage Bankers Association (MBA) and a former FHA commissioner during the Obama administration. The current policy is being rolled out by the FHFA.
He told Newsweek that this can be attributed to factors like distrust in the banking system or being a first-generation American. He added that low credit scores can be a significant barrier to homeownership.
But in order for the FHFA to close the gap by bringing down LLPAs for those borrowers, the agency will compensate for the reduction in borrowing fees by raising the LLPAs of borrowers with higher credit scores, who tend to be white.
The average credit score in white communities was 727 in 2021, compared with 667 in Hispanic communities and 627 in Black communities, according to data analyzed by FinMasters, a personal finance blog.
A home for sale awaits prospective buyers on October 27, 2022, in Hollywood, Florida. Starting in May, homebuyers with a good credit score could see their monthly mortgage payment rise while riskier borrowers will get more favorable mortgage terms because their fees were reduced, under a new federal rule. Joe Raedle/Getty Images
The effort to get more low-income Americans and Americans of color into homeownership is essentially being subsidized by borrowers who have better credit scores and can contribute more to their down payment, Michael Borodinsky, a vice president at Caliber Home Loans, told Newsweek.
Borodinsky said while the plan was designed to help people who have historically faced obstacles to homeownership, it comes at the cost of negatively affecting buyers who worked hard to save enough money for a larger down payment and maintain a strong credit rating, especially since those buyers can “be of all demographics.”
“This new rule unfairly penalizes Americans for having good credit and rewards those who accrue debt and don’t pay their bills with cheaper loans,” GOP Representative Michael Lawler of New York told Newsweek. “The way to expand access to housing isn’t to reward bad credit—it’s to bring down inflation, reduce property taxes, cut energy costs and invest in critical infrastructure.”
Although the new rule, which takes effect May 1, is designed to assist low-income and minority borrowers by encouraging homeownership, industry experts have expressed concern that the plan fails to meet that goal.
Stevens said that while the generational limitations on homeownership among racial groups in the U.S. need to be addressed, FHFA director Sandra Thompson’s actions weren’t enough to lower borrowing costs to the point it will “make a difference.”
“We just went through to this completely convoluted discipline around risk-based pricing in the hopes of accomplishing something that isn’t going to be accomplished,” he said.
However, in a statement shared with Newsweek, the FHFA defended the changes. It called the recalibration of its pricing framework “minimal” and stressed that the agency’s goal of making sure that the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac “fulfill their role in any market condition.”
But former National Economic Council director Larry Kudlow said those GSEs have never “penalized” people who don’t need government programs to help them own homes, calling the Biden administration’s new rule a “middle-class tax hike.”
“We learned the hard way [in 2008] that if you can’t afford a home, just getting a subsidy one time to get a mortgage, you won’t be able to carry it,” Kudlow told Fox News on Thursday.
A spokesperson for the National Association of Realtors (NAR) told Newsweek that a GSE could still incentivize homeowners without punishing others and stressed that such a move is “especially needed” at a time when there is limited affordable housing “in all areas of the market.”
“NAR urges the FHFA to eliminate the fee increase on strong credit borrowers,” the spokesperson said.
Newsweek reached out to the White House for comment via email.
The timing of the upcoming LLPA changes is also “not ideal,” given the spring buying season and low inventory, an MBA spokesperson told Newsweek. But the MBA is more concerned about another mortgage change: the addition of an LLPA for loans with a debt-to-income (DTI) ratio greater than 40 percent, which Borodinsky stressed is often a “moving target.”
The DTI is calculated by taking a person’s monthly debts, including minimum payments on credit cards and loans, and dividing it by that individual’s income. The result is used to assess a person’s ability to make the necessary monthly payments on a loan.
In a March 15 statement, MBA president and CEO Bob Broeksmit warned that because the DTI often fluctuates throughout the mortgage application and underwriting process, the new fees will further vary those estimates, thus “increas[ing] compliance costs and confus[ing] borrowers.”
“[It] makes for a ‘no win situation,'” Borodinsky said. “Especially because the borrower will feel that they were taken advantage of by the lender due to these changed circumstances.”
After the MBA asked the FHFA to remove the DTI adjustment, the agency delayed the DTI ratio-based fee to August 1. But the MBA expressed disappointment that the FHFA is not considering alternatives to the new fees, which “simply are not workable for lenders and borrowers alike.”
Stevens agrees and said: “This would just make things really difficult for the lending community and for potential homebuyers.” He added that he’s “hopeful” Thompson will gut the adjustment before it goes into effect during the summer.
Update, 04/24/2023, 5:10 p.m. ET: This story was updated to clarify which federal agency is behind the mortgage fee policy change.