Narrow Bridge Finance » Loans

How to Choose a Credit Union

Eric — Wed, 28 Dec 2011 14:00:33 +0000

As more Americans have become frustrated with their large, corporate banks, many have been moving their business to credit unions. Credit unions offer some amazing benefits and could be a great resource for many people.

What is a Credit Union?

A credit union is a financial institution that is owned by its customers as a co-op. Each member votes on board members and major changes to the institution. They are not for profit companies and are generally consumer focused, with little or no business offerings.

Because they are cooperative owned financial institutions, they generally charge low fees and have competitive interest rates for loan and credit accounts. I joined my first credit union when I purchased my first car because it had better auto loan rates.

How to Find a Credit Union

Most credit unions have restricted membership requirements. My credit union started as an organization for public employees. I was able to join because my father had an account and worked at the local Chamber of Commerce. It is now open to all Colorado residents.

Some credit unions only take employees of certain companies. Some only take residents of a defined geographic area. Others are open to anyone.

To find a credit union, start by talking to your company’s HR department. If they do not have any ideas, there are a few good resources to find a good fit for your needs:

CU Lookup – Maintained by the National Association of Federal Credit Unions, the CU Lookup tool allows you to search by location or affiliation.

NCUA – The National Credit Union Administration is the FDIC for credit unions. It has tools to help you research credit unions before you join.

How to Choose

If you find more than one credit union that you are eligible to join, take a look at their offerings. Some credit unions offer a short list of account types while others are full service institutions with options for loans and investments.

I wanted a credit union with competitive loan rates, which is why I joined my credit union. If you are looking to use a credit union for your banking needs, make sure you it has a location near home and good ATM access.

Bank or Credit Union?

This is a decision that you have to make for yourself. If you are happy with your bank and are not charged fees for your activity there, there is no reason to go through the hassle of moving. If you are upset with your bank, and large banks in general, and want to make the move, a credit union could be a great fit for you.

Please share your thoughts and experiences with credit unions in the comments.

Image by The Consumerist.

How to Choose a Credit Union is a post from: Narrow Bridge

Social Lending Options

Eric — Wed, 09 Nov 2011 16:32:13 +0000

P2P lending is making big changes in the world of lending and banking. Peer to peer lending, for those who don’t know, is a lending situation that removes the bank. It is people lending to people. I am a huge proponent of P2P lending as an investment option to help diversify your portfolio.

Prosper

Prosper was the first option for peer-to-peer lending, but it had SEC filing issues that put the company on the shelf for a short period of time. Since returning, Prosper claims lending rates as low as 6.59% (based on credit history) and 10.69% returns.

As with the other sites I discuss on this post, Prosper allows you to invest in a portion of a loan in $25 increments. You can review the loan application and decide if it is a worthwhile risk. Higher risk borrowers, determined by credit score and a number of other factors, have to pay a higher interest rate. You keep the interest and get your principle back, just like a bank. However, if the borrower stops paying, you lose out.

You can try the Prosper Marketplace to get started.

Lending Club

I have written about Lending Club many times in the past. Lending Club was one of the first major P2P options available for people like you and me to get loans at competitive rates and invest for high returns.

My net annualized return with Lending Club has been 9.83%. If you are looking for a way to beat bank account returns, bond returns, and stock market returns, this is a great way to go. Just beware that returns are contingent on your loan recipients paying you back.

Kiva

Kiva is a non-profit microlending organization that allows you to make loans to people in developing countries. Like Lending Club and Prosper, you are lending directly to people who need the money.

Unlike the others, however, Kiva is designed to help people make large improvements to their lives and businesses through small loans. I have made three Kiva loans so far and have been happy with the results. You can both make money while helping people in true needs, but the risks with international microloans are higher than LC or Prosper.

I don’t get anything from pointing people to Kiva, but if you sign up through my Kiva link I can track how many people I have referred. Give Kiva a try here.

Learn More about P2P Lending

My fellow Denver local Peter Renton maintains a great blog 100% dedicated to social lending. Be sure to check out his site, Social Lending Network, to stay on top of peer-to-peer lending news and strategies.

Image by MoneyBlogNewz.

Social Lending Options is a post from: Narrow Bridge

Home Buyer’s Guide Part III: From Contract to Close

Eric — Mon, 10 Oct 2011 14:42:22 +0000

You recently read about finding your home and getting under contract. Now that the hard leg work is over, the hard finances will begin.

Find a Loan

The first step once you are under contract, if you have not already, is to find a trusted bank with competitive loan rates and fees. I had the good fortune of working with a family friend, but we don’t all have trustworthy bankers drop in our lap.

Research your local banks and credit unions and compare to online options. Once you find your bank, get in touch with a loan representative to get the process rolling. You will need to know the property address, your down payment amount, and the type of loan you are looking for when you get in touch with the bank for the first time. They will pull your credit report and score early on in the process, so make sure you only apply for the loan with one bank to avoid extra credit hits.

Inspection

Find a trusted local inspector to do a throughout walk through and inspection of the property. Make sure you can be there to join the inspector so you see the problems with your own eyes. Also, make sure your realtor is available to join and let the inspector onto the property.

After the inspection, you will get an inspection report. Use this to request repairs and fixes from the current owner. The request will become an amendment to your contract, so work with the realtor to make sure everything is addressed to your satisfaction.

Unless otherwise negotiated, the buyer generally pays for the cost of the inspector.

Get Insurance

Your bank will require you to have insurance on your property as long as you have a loan. It would be stupid not to have insurance, but the bank makes it easy by collecting an escrow payment as part of your loan payment every month.

Get insurance quotes from multiple companies for comparison. Find a policy that meets your minimum requirements and choose a deductible that you think is reasonable and you feel comfortable with. Sign the papers and get your insurance agent in touch with the bank. The bank will take care of your payments and bill you monthly as part of your mortgage payment.

Appraisal

The bank will require a professional appraisal to ensure that your loan amount does not exceed the true value of the property. Remember that sites like Zillow are automated estimates. An appraiser conducts a more in depth comparison to nearby properties to estimate the property value. Most banks have a preferred appraiser and will order the appraisal for you. You will be billed for the cost.

Take Care of the Incidentals

Something is bound to come up that will impact your closing. The repairs might take longer than expected. The appraiser is an idiot and can’t find the lock-box to get in (this happened to me). The IRS is slow to send your tax history to the bank (also happened to me). There are a lot of variables. Make sure to work with your bank and realtor to stay on top of the to do list.

Make the Big Payment

On the closing day or in the couple of days before, you will get a final closing cost statement from your bank. This will outline the expenses you are covering, the expenses the seller is covering, the down payment amount, the purchase price, the closing fees, the realtor fees, the title fees, and everything else that happens on the purchase date.

Review that document carefully and make sure you understand every cost that you are paying. At the bottom is a big dollar amount. You will have to bring a cashier’s check or send a bank wire for that amount to the title company. The title company is responsible for dispersing the funds to everyone.

Close on the Loan and the Sale

Closing day is a big day. You will need an hour or two to take care of everything for the closing. Plan on signing your full name a lot of times. My banker estimated that I would sign my name 120 times on closing day.

Read and understand the documents as you go. You are signing important legal documents with important and long term implications.

At the end, you get your keys and you are a homeowner. Congrats! Now it is time to move and deal with the challenges of being a new homeowner. Come back soon for a recap on what you need to do after you move into a new home.

Image by Muffet.

Home Buyer’s Guide Part III: From Contract to Close is a post from: Narrow Bridge

Lending Club Update: October 2011 Edition

Eric — Thu, 06 Oct 2011 16:04:54 +0000

I have not written about my Lending Club experiment in a while, and hearing their name regularly at the Financial Blogger’s Conference over the weekend inspired me to give you all an update.

In my time with Lending Club so far, I have made 19 investments in $25 increments. Of those, four have been completely paid off, fourteen are outstanding and current, and one is in the funding process. None have defaulted, though I did have one scare that has since come current.

The more I use Lending Club, the more I appreciate what peer to peer lending has to offer. My average annual return has been 9.89%. I seriously suggest you check it out. I would not put all of my eggs in one basket and I would work hard to find diverse lending opportunities, but I would not overlook this blooming industry.

As a bonus, each reader who signs up for Lending Club Investing through this link is directly supporting my efforts to keep going at Narrow Bridge Finance.

If you want to understand how you can get such a high return, check out my old post on how you can make money like a bank.

As always, you can contact me in the comment page or comments below if you have any questions. If you are already on Lending Club, how has your experience been so far? Please share in the comments.

Lending Club Update: October 2011 Edition is a post from: Narrow Bridge

How to Consolidate Debt

Eric — Tue, 20 Sep 2011 16:14:34 +0000

I listen to the radio on the way to work every day. At least once every morning, I hear a commercial talking about debt consolidation services. Some of them are good companies trying to help you and some are predatory and are just trying to make a buck. It is important to know how debt consolidation works so you can make good, informed decisions.

Credit Cards

The most common reason to consolidate is to get a lower interest rate. While it is also nice to have fewer payments, the lower interest rate savings can be significant. To consolidate debt with credit cards, start by making a list of your cards, interest rates, and outstanding balances.

Most cards will let you do a balance transfer. Make sure that there is no fee or that the fee is low enough that it is still worth the transfer first. Work with the bank that has a lower interest rate to move the balance to the lower interest account.

Student Loans

You are only allowed to consolidate student loans once, so make sure it is worth it when you make the move. The government currently subsidizes Stafford loans to 6.8% interest. Other loans have varying rates. If you can get them to a lower rate, by all means jump at the opportunity.

The only time I would warn against consolidating student loans to a lower interest rate is if the higher interest balance is very small. If you can come up with a way to make extra payments that would eliminate that loan all together rather than consolidating over a longer period, it may be better for you to pay the higher rate for a short period of time than a lower rate for up to ten years.

Equity Backed Consolidation

If you are a homeowner, you have likely built up home equity. While I would never suggest taking out a home equity loan for spending, it could be a good idea for consolidation.

Secured (equity) loans usually have a much lower interest rate due to the collateral attached to the debt. Because you are responsible and would not miss payments, you have no risk of losing your collateral. (You are responsible, right?) Under that circumstance, you could refinance your credit cards into one home equity loan at a rate that can easily save you 15% per year.

What Should You Do?

You have to decide whether the circumstances are right for you to undergo a debt consolidation. If you decide to do so, make sure you work with a reputable bank or company that has your best interests in mind.

As always, post your questions and thoughts in the comment section below.

Disclaimer: Consideration received for some post content, but all opinions are my own

How to Consolidate Debt is a post from: Narrow Bridge

Interview: Jason at Live Real Now

Eric — Wed, 10 Aug 2011 17:30:03 +0000

Welcome to the newest installment of the Yakezie interview series. Today, we have questions answered by Jason at Live Real Now. Jason has been making major strides cutting his debt and has chronicled the journey at his site.

How did you get started in personal finance blogging? What was your inspiration?

In April 2009, my wife and I were on the verge of bankruptcy. We weren’t behind on anything, but we were in over our heads. While researching bankruptcy attorneys, I discovered Dave Ramsey and decided to give that a shot, first. For the next 6 months, I wouldn’t shut up about money and decided I should share my journey with the world and stop annoying my friends and family with it.

What changed in your financial life after you were married and had kids that was a surprise? If you could instill one financial value in your children, what would it be and why?

I was shocked by how much nickel and dime crap there was to pay for with our house. Everything from getting the sewer main snaked to replacing the screen in the window to buying gas for the snowblower to having to own a snowblower. It all costs money and adds up, but nobody ever thinks about that before they get a house. The one financial value I am trying to drill into my kids is a pure loathing for debt, specifically interest payments. Kids, don’t carry debt. If you can’t control yourself, don’t get credit cards!

On your site, you mentioned that you are trying to change your lifestyle. You are trying to get in shape and downsize your stuff. Have those efforts made a financial impact in your life? If you could start those efforts again today, what would you do differently?

I managed to cut my finances down pretty severely before I picked up my other projects, so I don’t think weight loss or downsizing has had much of an impact financially. The one thing I would do differently is to remind myself not to cheat. I can’t cheat just a little. Guaranteed, if I eat one cookie, there will be 3 more following it. I need to follow a strict set of rules, or I will definitely fail.

What is the biggest personal finance lesson you learned the hard way?

This one’s tough. I’ve always had a compulsion to learn every possible lesson the hard way. The biggest? Get your husband/wife/partner/lover/leprechaun on board before you dive headfirst into any life-changing project, be it debt repayment, massive weight loss, or self-employment. Life is so much easier when you’ve got their support to fall back on and so much happier when you aren’t fighting over who bought what.

Outside of blogging, what has been the biggest change you made to your financial life that made a difference? (i.e. making more money, frugal changes, budgeting, investing)

Credit. Rather the shunning of. Over the past 27 months, we’ve paid down $40,000 of debt. We couldn’t have done that if we were still charging our lives away. This spring, we got surprise with a $4000 bill for my son’s vision therapy and managed to pay it off without paying a cent of interest on it. That would have been impossible with our old spending habits. Our money is doing what we want it to do now, instead of demanding it be spent on garbage like a new TV we didn’t need and couldn’t afford 3 years ago.

Interview: Jason at Live Real Now is a post from: Narrow Bridge

Carnival of Personal Finance #321 – The Fraud Edition

Eric — Mon, 08 Aug 2011 11:00:13 +0000

Welcome to the 321st edition of the Carnival of Personal finance. I had a lot of fun reading everyone’s submissions and added a few new folks to my reading list. I am excited to host this carnival for my first time. If you are new to Narrow Bridge Finance, be sure to check out some of my best posts and read about why you should listen to me.

This month I dealt with the single most bizarre experience of my life. I became friends with someone, started a company with him, and found out he was not who he claimed to be. It made me think about the millions of people who have been in similar situations. From Bernie Madoff to Frank Abagnale, this week we are going to highlight some people who used finance for a very different purpose than the bloggers of today.

Image from Dreamworks film Catch Me if You Can

To begin, the con artist that makes fraud sound sexy. Frank Abangale Jr. was the subject of the popular film ‘Catch Me If You Can.” Based on the life of Abangle, Leonardo DiCaprio makes fraud look fun as he travels the world as an airline pilot, saves lives as a doctor, and eludes an FBI agent hot on his trail as he cashes fake checks and finds beautiful women.

Editor’s Picks:

Sustainable PF examines ways to make money online over four decades. Starting in the 1980s, SPF used innovative methods to create income streams. Some of them have died off and others are still applicable today.

The Financial Blogger thinks that debt is a good thing. How timely can an article be? As Fannie and Freddie are posting losses, the US Government is struggling with its own debt, and I am looking at buying a home, TFB takes a look at things from the other angle.

Mike, aka Oblivious Investor, reminds us that owning a bunch of mutual funds is not the same as diverse investing. Many mutual funds own the same stocks and some even own other mutual funds. Mike helps you dissect your portfolio to balance your investments.

Lindy at Minting Nickels made a few mistakes when she had her first baby. She shares her non-frugal moments in her post How We Didn’t Save Money with Our Babies.

Squirrelers has five easy steps to increase your savings. Sometimes it is good to get back to basics with personal finance.

Budgeting:

My blogging buddy Well Heeled has seven tips for buying an engagement ring at Costco. These are great tips when you are making such a big and important purchase.

Career:

Adam at Rabbit Funds continues a series on starting a home business. This post focuses on important accounting and marketing tasks that most bloggers and entrepreneurs can learn from.

Clint at Accumulating Money put together a list of different types of jobs for finance professionals. As a finance guy myself, I can attest to how important having a direction can be to your finance career.

Mike at Green Panda Tree House wants to help you make a plan to quit your job.

Control Your Cash reminds you that your time is worth something and you should give it a value. Do not give it away for free.

Bret at Hope to Prosper has the secret to success for working stiffs.

Your Life Their Life looks at George Costanza as a case study for how you can succeed at work.

Image via Wikipedia

Don’t forget the infamous Charles Ponzi. Yes, he is the guy Ponzi schemes are named after. Charles pioneered the genius pyramid marketing scheme that has cost so many people so much money. The Italian immigrant swindled people and governments by engaging in mail fraud and investment fraud.

Credit:

Jake at NerdWallet examines the different benefits of American Express cards. From Clear to Centurion, AmEx has a lot to offer, if you are willing to pay the fee.

Jeff from Good Financial Cents reminds you to avoid store credit cards. It is not worth it.

Janet at Credit, Eh thinks you should use income diversity as a insurance for your credit card payments.

Glen at Free From Broke found the best credit cards for college students.

Philip shares ten tips to stay out of credit card debt at Deliver Away Debt.

Debt:

Jeff at Sustainable Life Blog takes a look at what happened so far this year in his finances.

Cathy at Money Health Central has ideas for what to do after your debts are paid off.

Image from US Department of Justice

Bernie Madoff is a new edition to the list of fraudsters. Madoff admitted to operating the largest Ponzi Scheme in history. It is estimated that he cost investors $18 billion when his Manhattan investment firm went bust. He is currently serving a 150 year prison sentence. Sadly, many non-profits were dramatically impacted when Madoff’s house of cards collapsed.

Economy:

My University Money explains the implications of the rising Loonie compared to the US dollar and gives a brief FOREX lesson discussing why exchange rates vary.

Darwin from Darwin’s Money shares what the media did not regarding the debt ceiling vote.

Money Thinker has his own ideas for fixing the national debt.

Finance:

Money Beagle thinks having health insurance can be hazardous to your health. If you are considering a new addition to your family, this post has great insights.

Crystal shares her retirement checklist at Stupid Cents.

Image from US Department of Justice

Kenneth Lay is responsible for the largest corporate collapse from fraud in history. Lay lied to investors and cooked the books at Enron while being paid over $42 million per year to manage the company. The company with a $60 billion market cap with $100 billion annual revenue was exposed in October 2001 and now does not exist.

Frugality:

Kim at Blogging for Change noticed that her child’s school supplies were far more expensive than they needed to be, but most people just pay for convenience.

Free Money Finance takes a look at extreme couponing and wants to know your take.

Britney at TotallyMoney wonders if cost and expectation go hand in hand.

Hunter at Financially Consumed writes about caffeine addiction and how it impacts you, and your finances.

Glen at Parenting Family Money has 9 inexpensive ways to keep your kids entertained over summer vacation.

Jacob from My Personal Finance Journey has five great ways to reduce your car insurance.

Investing:

The Dividend Growth Investor looks at master limited partnerships and the implications of owning these investments.

The Div-Net takes a deep dive analysis into the high dividend yield of Kinder Morgan.

Intelligent Speculator things that Google might have a chance at social media after all. It is not going to happen automatically, but Google is taking steps in the right direction.

The Dividend Growth Stocks blog is on the never ending quest for the perfect dividend stock.

Matt the Dividend Monk will help you build a $150,000 portfolio by the time you are 30.

John at Stock Market Basics helps you discern the many gold ETFs you can purchase.

Ricky at Qwoter can help you decide on the best company for an IRA depending on your needs.

Growing Money has comments on CNBC’s recent list of 20 stocks about to pop.

Jim at the Retire Happy Blog has found the science of building a diversified investment plan.

John from Wallet Blog discusses the difference between money market funds and money market accounts.

Outlaw Finance gives tips on where to invest your money.

Image from ABC's Lost via Wikipedia

Okay, so this one was not a real guy, but I could not make a list of con artists without including James Ford, more commonly known as Sawyer. Sawyer taught the world about the “long con” on ABC’s series Lost. Sawyer also lived under the alias Jim LaFleur. Of course, Sawyer would not have been such a great con man if he had not learned from the man who stole his parent’s life savings.

Money Management:

Ricky at Qwoter discusses financial priorities. Learn about ideas ranging from the popular emergency fund to less known tips for building your own value.

Jen at Master the Art of Saving is taking an extreme couponing reality check. It is important to remember that behind the trendy “glamour” of feeding your family for twenty cents for four weeks that there are big costs. She also notes that guys (such as myself) may not appreciate your fifty boxes of tampons in the garage.

Anabelle at The Year of Shopping Detox wonders why so many financial experts and mean and yell-y. My personal opinion of Suze Orman is not so good, by the way.

Eric (good name!) at DollarVersity reminds us that bank account bonus offers are not always as good as advertised.

RJ at Gen Y Wealth thinks you do have enough willpower to make a difference in spending decisions. He also has strategies to make it easier on you.

MD at Studeneconomics explains why online banking is more popular than ever.

Canadian Finance Blog thinks it is time to start thinking like a wealthy person.

Jason from One Money Design asks the readers if they can live well on less than $40,000 per year.

Elizabeth reminds us to remain calm despite our volatile economic situation at Modern Gal.

Real Estate:

Nicole at Grumpy Rumblings shares her August mortgage update and the broken window hypothesis.

Sarah helps you find out how much your home is really worth at Money Under 30.

Saving:

Chris at Stumble Forward helps you set up a savings account for your child. This is an important step in your child’s financial education and future, so be sure to get them started young.

Mike at Cards Canada examines loyalty programs worth joining.

Ben at Money Smart Life has the best rental car deals for road trips.

Phil at PT Money, our great organizer for the upcoming financial bloggers conference, tells us how to save like a madman.

Other:

Boomer from Boomer & Echo is learning about caring for elderly parents and shares stories from difficult moments.

Junior at Consumer Boomer helps you decide whether funeral insurance is right for you.

Briana at Personal Dividends never travels without travel insurance. She lists of the major benefits of having your trip insured.

No Debt MBA helps you decide if admissions consulting is worth the cost.

Asking About Money interviewed No Debt MBA and had some interesting answers.

Next Week:

Next week the Carnival of Personal Finance will be hosted by Financial Uproar. You can submit your posts by visiting the Carnival of Personal Finance homepage.

Carnival of Personal Finance #321 – The Fraud Edition is a post from: Narrow Bridge

Interview: Free From Broke

Eric — Mon, 13 Jun 2011 15:12:26 +0000

Today I had the opportunity to ask Glen at Free From Broke a few questions about his personal finance goals and history. Free From Broke is a top quality personal finance site. It chronicles a journey from credit card debt to being, as the name implies, a lifestyle free from debts and worries.

1) How did you get started in personal finance blogging? What was your inspiration?

Like many, I was neck-deep in credit card debt. On top of that I was living paycheck-to-paycheck with just about no savings and nothing saved for retirement. I know something had to change so I slowly started to educate myself and make changes to my finances and debt. I was able, with the help of moving back with my folks, to eliminate my credit card debt and start on the track to savings and retirement.
In reading up on personal finances I found Get Rich Slowly. Loved it! What J.D. was writing there rung true to my life. After a bit, I thought I might be able to contribute my experiences and help people out so I started up Free From Broke.

2) What changed in your financial life after you were married that was a surprise? If you can instill one financial value in your children in the future, what would it be?

Hmm, does having kids count? It was a surprise to actually see how much those little rugrats actually cost (I love each of our three dearly). Maybe another surprise, a good one, was how well my wife and I integrate our finances. Not that I was worried we wouldn’t mesh, it’s just pleasant to know that we trust each other fully and have each other’s backs. We’ve been able to save such that we were able to buy a house last year with close to 25% down. Though money is tight, it hasn’t been as bad as we thought it would be. We’re making it happen!
As for financial advice to the kids, don’t be a slave to money. Use, and save, money well and it will be a great liberating tool. But if you become a slave to it, buying things to live up to some imagined expectation and/or building up a lot of debt, your life decisions will be ruled by how you can pay things back, not by financial freedom. Hope that makes sense.

3) You made a massive financial change when you moved in with your parents and overhauled your finances. What tools did you use to help you accomplish your goals? What advice do you have for someone getting started on a financial overhaul today?

Yeah, that was a BIG decision moving back with the ‘rents. I didn’t really use any tools such as budgeting tools, but what I did utilize was making automatic savings into my online savings account and my 401(k). Making payments automatic meant they were put away before I could use the money. I loved seeing my account grow, even slowly.
For someone starting on a financial overhaul I have this to say – Anything is possible! If your goal is to get out of debt it CAN be done. It may take some time and you might take a couple of steps back occasionally, but stick to it and you will meet your goals. Personal finance is a process that isn’t complete overnight. It takes time and your financial plans will change over time.

4) What is the biggest personal finance lesson you learned the hard way?

Wow, good question. Maybe it’s that, just like small savings add up over time, so does small spending. When I was in debt, there were a couple of big things I spent on, but most of it was small like a CD bought here and there. Over time, that spending adds up. And when that spending is done on a credit card that you aren’t paying off every month, you are adding interest as well. It’s easy to find yourself drowning in debt from consistent, small drops.

5) Outside of blogging, what has been the biggest change you made to your financial life that made a difference? (i.e. making more money, frugal changes, budgeting, investing)

Consciousness. Knowing where my money was going and realizing how much I could actually spend. I think most personal finance issues aren’t simply a case of not having enough money. People with six-figure salaries goes broke, even millionaires. I think it’s when we aren’t conscious of our money and what we spend on and why that we get into financial trouble. You need to respect your money and be accountable for your financial actions. I see so many people pretend that things will just turn out ok but they aren’t willing to be responsible and realize what their financial situation is.
When I started making changes to my finances, it’s because I told myself things had to change. No one was going to make that change for me.

Interview: Free From Broke is a post from: Narrow Bridge

Lending Club Update – April 2011

Eric — Thu, 07 Apr 2011 13:00:31 +0000

I have not written about my Lending Club experience in a while, so it seemed like a good time to share my progress.

I have a net annualized return of 10.12%. When banks are paying below 1% interest, this is a great way to invest your money.

I am currently invested in seven different loans, each with a unique risk and return profile. I invested in three notes that have been paid off in full. As my account grows, I continue to reinvest in new loans. I started the Lending Club experiment with that philosophy.

Click to Enlarge

At one point, I did have one loan over 30 days past due. If a loan defaults, you are out your investment. Fortunately the borrower has paid back all past due amounts and a late fee, which I get my portion of as well.

I highly recommend you give Lending Club a try.

Lending Club Update – April 2011 is a post from: Narrow Bridge

Student Loan #1 – Paid off! #Winning

Eric — Wed, 06 Apr 2011 16:31:20 +0000

Yes, I included a Charlie Sheen Twitter reference in the post title. But when you are a personal finance #warlock with #tigersblood, it is only appropriate.

Why am I so egotistical on my financial savvy today? Why is today different from all other days? They say a picture is worth a thousand words, but in this case it is worth more like twenty thousand dollars.

Yes, loan number one is now paid off!

How and Why I Did It

Over the last six weeks, I have been doing well financially. I received a large reimbursement from a flex spending account for $3,400 from my eye surgery that I paid for out of pocket in advance, I had a few advertising sales come through, and I got my annual bonus at work.

I decided against buying a home right now, so I had extra funds to burn. Rather than actually burn them, I put the cash to good use and paid off the last $3,500 in my smaller student loan.

This saves me interest payments every month and opens up $65 in cash flow (minimum payment) if my financial situation were to change dramatically.

Loan Number #2

I have $7,735.81 left in total debt. That is all a 6.8% student loan with a monthly payment of $92.32. My goal was to pay off my student loans completely within two years of graduating. I am just over the one year mark and I am on track.

I might not pay this one quite as quickly as the original goal because my priorities have changed. I am trying to preserve capital and save up so I can make a good down payment on a home in the next year or two.

If you are looking to pay down your student loans, you can probably relate to one reader that wrote in to ask for help on a payment plan. (Lots of good tips in the comments on that post too!)

Have you conquered student loan debt? Are you in the process? Please share what you learned, and what you need help with, in the comments.

Student Loan #1 – Paid off! #Winning is a post from: Narrow Bridge