Sunk Costs are Irrelevant

We've moved

noreply@blogger.com (Slug) — Tue, 18 May 2010 20:55:00 +0000

Sunk Costs are Irrelevant now has its own website!

Charles Schwab 2% Credit Card, An Update and NEW ETF's!

noreply@blogger.com (Slug) — Thu, 05 Nov 2009 18:19:00 +0000

Back in April, I reviewed the Charles Schwab Invest First VISA Credit Card. I've been using the card for 6 months now as my primary card (except for gas (PFCU) and hotels (Marriott)), and I have to say it has met all expectations. The account is everything I currently could ask for:

2% back on all purchases - a very solid reward
no foreign transaction fees - Spain, no problem; London, no problem
automatic payment so I don't have to worry about manual payments
excellent customer service

The one area I wasn't as keen on was that all of my rewards were required to go into a Schwab brokerage account paying .01% on the balance and charging $12.95 commissions. This would mean the money would just sit unused and not gaining meaningful interest unless I transferred it out. And, sit it did...........until today.

Today I read online in the NY Times that Schwab was introducing its own ETF's. Normally I wouldn't care because I have plenty of access to great ETF's through Ameritrade, but I read on anyway and found out that if you purchase a Schwab ETF through your Schwab account, there is no brokerage commission. That's a pretty good deal I thought, but probably Schwab will just put their expense ratios higher than average to make up the difference. Wrong. The Schwab ETF's expense ratios were lower than the ones for the comparable Vanguard funds. To top it off, when you make your order at Schwab, there is a simple click box to reinvest your dividends.

Sold. So, today I'm investing all my free money into free ETF's (75% SCHF, 25% SCHB) with free dividend reinvestment. All in all, a pretty good deal.

Money Laundering for the US Government

noreply@blogger.com (Slug) — Thu, 17 Sep 2009 15:06:00 +0000

Okay, my headline is a bit sensationalistic, but it's not far from the truth in my latest profitable personal finance adventure. You see the US Mint has a problem. It wants to replace the paper version of the US dollar with the coin version because the paper version wears out much more quickly and increases costs for the US Mint to replace the currency whereas the coins obviously degrade far more slowly. The only way to take paper money out is to increase the circulation of the coins. This is where I come in. You see you can buy these coins at the US Mint website. Why help the government with this task you ask? Because you can make $ on it. Here's my process from a recent transaction:

1) 9/5/09 My billing period closes on my Schwab Invest First credit card. Why is this the starting place? Because I'm buying the money with my credit card that pays me 2% on any purchase (including the purchase of coins at the US Mint). And, I want to buy as close as I can to the new billing cycle in order to maximize the amount of time the value of the coins will be deposited in my bank account before I have to pay the credit card bill.

2) 9/9/09 I initiate my purchase at the US Mint website. I buy 2 $500 presidential sets. It's easy and painless. Note that when you go through the purchasing process, it appears like you have to pay the shipping and handling until the very last page. The shipping is actually FREE, and that's clear at the end.

3) 9/15/09 I had heard that delays in the initiation of shipment were common. My coins shipped 6 days after my purchase initiation. A UPS tracking number was provided at the website.

4) 9/16/09 Surprisingly, the coins arrived the next day. You must sign for them. I took the coins to the bank at lunchtime still wrapped in their wrappers and encountered no issues with the deposit. It was a completely normal and standard transaction except that I had 1000 $1 coins in my possession.

5) ~11/7/09 This is the likely future date where my Schwab Invest First credit card will autopay for this purchase from my account. That means I'm gaining 2% interest on $1000 for about 50 days in my NC State Employees money market account. I'm estimating the approximate value of this to be $2.75.

$2.75 isn't much, but let's not forget the $20 I'll be getting as cashback bonus on my purchase from Schwab.

So, to summarize, I make $22.75 by initiating a web purchase, taking delivery from the UPS person, and depositing the money in the bank I drive by virtually everyday. If you do this at the beginning of each billing cycle as a routine and you pocket an extra $273 per year. Probably not as profitable as real money laundering, but this one is legal.

As always, feel free to ask questions in the comment section.

Charles Schwab 2% Credit Card, A Review

noreply@blogger.com (Slug) — Tue, 14 Apr 2009 20:32:00 +0000

I'm always in the market for a better credit card. Many of you will remember when last year I posted about the merits of the Pentagon Federal Credit Union Platinum Cash Rewards Card. I still love this card, and its customer service, but I think I'll only be using it for gas going forward (5% back on gas). So what's my new primary card?

My new card is the Schwab Bank Invest First Visa Credit Card. It pays you 2% back on everything. That's right, everything. With no limit to the reward. So, what's the catch? Well, the catch is that the reward is funneled directly into a Schwab One brokerage account. If you don't already have one, you have to set one up in order to get the rewards. I did not have one since I use Ameritrade as my broker. However, I was able to set up both the credit card account and the brokerage account without much hassle. I will note that they initially denied me the card, but I contacted them after receiving the denial letter and we came to an understanding (which was they will open the account and send me the card via FedEx immediately).

I have begun using the card with no issues. As I understand the 2% reward will post into the brokerage account within one month of the bill's payment. This is longer than I like to wait for my money and is a negative compared to the PFCU card, but I'm giving it a try. Another downside to this card appears to be the bill pay feature. I typically set my cards to automatically pay the bill in full each month since this maximizes my benefit of the use of their money by paying as late as possible. It also means I don't ever have to worry about finance charges or late fees. However, this card does not offer autopay in a way that allows it to pay the full bill amount. You must manually choose a date and amount, which I find completely counter-intuitive to the reasoning around using autopay in the first place. We'll see how this plays out...

One final positive to note about this card is that if you travel internationally, the fact that this card does not charge foreign transaction fees is a big plus.

Let Them Fail? Let Our Tax Dollars Decide.

noreply@blogger.com (Slug) — Mon, 26 Jan 2009 12:34:00 +0000

I am an American. Relatively typical. I am married. I have a kid. I own a house and with it a huge mortgage. I have a job. I have some achy parts and have a few regrets. AND, I'm responsible for all of it. If and when things go wrong and something often does, the buck stops with me, and I'm fine with that. It's the way the world should work.

What I don't understand is how US businesses feel that the same approach does not apply to them. That somehow they're entitled to a bail out. A sense of entitlement is one of the few things that actually can piss me off. Just ask my 2 year old! That these businesses argue that they're too big to fail is simply ridiculous. That the US economy would fail because they are so important does not jive with my experience of how Americans truly live. In my own family, I also am too big to fail. I generate 100% of the income and if I were to fail, the entire Slug economy would fail. Does that mean I deserve a bail out if times get hard? No way. It means I suck it up and find a way or I file for bankruptcy. The same goes for US businesses in my eyes. Suck it up and find a way or file for bankruptcy, but do not come to me looking for a hand out, especially for my tax dollars.

It would be interesting if the IRS added one final question to the 1040 for this year. It would read "What percentage of the taxes we collected from you should we apportion to the financial bailout of large corporations?" Then, the IRS compiles the data, and that's the amount set aside for saving big business. Let the citizens speak.

Workout Post #3

noreply@blogger.com (Slug) — Sun, 25 Jan 2009 20:40:00 +0000

This week I went to 3 classes which averages out to each class being a little under $2 each, and I'm feeling more fit physically and financially.

It was also a payday week. It's really dicey these days with so little cash to float things along until we can save another nest egg.

Workout Post #2

noreply@blogger.com (Slug) — Fri, 16 Jan 2009 19:54:00 +0000

Well, today I went to my second Total Body Conditioning class. I should note that my legs were still burning from the class 2 days ago. We'll see if I can walk tomorrow. I definitely feel like I got my money's worth this week. By the way, I pay the equivalent of $5.75 per week.

Workout Post #1

noreply@blogger.com (Slug) — Thu, 15 Jan 2009 18:36:00 +0000

So, yesterday was the start of my gym membership. I went and took an hour long class called Total Body Conditioningfull of bicycle sprints, push-ups, tricep curls, one legged squats and about 5 other exercises that kicked my butt. It felt great. I plan to go again on Friday. My goal is to make it $ well-spent.

Stock Purchases - Dow Chemical & Allied Capital Corporation

noreply@blogger.com (Slug) — Thu, 15 Jan 2009 18:24:00 +0000

I love buying on down days. Granted today is another down day and I bought these stocks during yesterday's down day, but you can't spend your life trying to time the market. It's another reason I'm buying quality companies so I won't care if it goes down a bit before coming back. At least I'm buying companies capable of coming back and often paying a nice dividend along the way. So yesterday I bought:

Dow Chemical - DOW - I bought this stock for my and my wife's Roth accounts. It's exactly the same type of stock as the rest I've been buying lately. A solid company with a good balance sheet and a rocking dividend (DOW's is a little over 11% at this writing). Purchase price of $15.20. This will be a long-term hold.

Allied Capital Corporation - ALD - This stock is in my play account. It currently pays an 86% dividend. Yeah, that's right 86%. However, I expect that to be greatly reduced in the near future. ALD operates as a private equity company doing all manner of business development. It's a highly regarded company that's here to stay after some recent restructuring. I bought at $3.10 and plan to sell covered calls on my shares at the $7.50 level once the stock rebounds.

T-Bill Laddering at a 0% Yield?

noreply@blogger.com (Slug) — Wed, 10 Dec 2008 17:37:00 +0000

Would I consider building a T-bill ladder with a yield of 0%? In a word, no. Never. However, there are some folks out there who are doing just that, buying US Treasury Bills at an interest rate of 0%. Back in March when I first wrote about T-bill ladders, I mentioned not starting one right now because the yield was so low. At the beginning of this year on Jan. 2, 2008, the 4 week was yielding 3.09%. On Nov. 28, 2008, the 4 week was yielding 0.02%. Incredible. I had no idea they would fall this low. Why would anyone ever accept a rate of 0% or in some cases even a negative yield? Well, this NY Times article does a good job of explaining why it's necessary for some entities to do just that. All I can say is it's probably going to be a good long while before my portfolio diversifies into the area of T-bills again. And, it's really easy to fund public works programs under Obama when you can borrow money at 0%. Now, if they'd only let me renegotiate my mortgage at that rate...

Modified Mortgages: A New Lesson in Moral Hazards

noreply@blogger.com (Slug) — Mon, 08 Dec 2008 21:07:00 +0000

The Wall St. Journal (and every other reputable news agency) is reporting today that the actions taken by banks to modify the mortgages of those citizens who were already delinquent on their mortgages has not had the desired effect. Specifically over 50% of these individuals re-defaulted within 6 months. This of course calls into question any hope for the long-term effects of these kinds of loan modifications. Is it really that much of a surprise though? I mean these are people who made a decision not to uphold their end of their original mortgage, and they were rewarded for it with lower rates financed on the backs of taxpayers, the majority of whom pay their mortgage and bills on time every month. How shameful. How long will it be before the producers say enough is enough - that we need to cease allowing these parasites to suck us dry? And, how sad that the other citizens who could have had their loans modified and could have started contributing to society again may not be given that opportunity due to the actions of the morally weak who would leach from those of us trying to build a better world. Thats all from my holier than thou soapbox today.

Buying a House in Chapel Hill, NC in this Freaky Real Estate Market Downturn

noreply@blogger.com (Slug) — Tue, 18 Nov 2008 20:49:00 +0000

Yes, that's right I bought a house in this market, and I'll take you through my thinking so you can either replicate my process or learn everything you're not supposed to do. Let's start from the beginning...

7/08

We sold our home in NJ (at a loss - though not at the levels currently facing NJ homeowners) and relocated to a Chapel Hill, NC 3 BR apartment at $1450/mth plus a storage facility at $90/mth. That's a little over $1500/mth in incentive to buy a house. We began looking immediately.

7-9/08

From July through September we wrestled with where to buy. Should be buy in the Chapel Hill school district? It's one of the best in the state and is nationally known, but means you pay a much higher price for your home accompanied by a much higher real estate tax rate. Ouch. The potential also exists for these schools to feel ultra-competitive, something we definitely do not want. The county schools in both Orange and Durham counties are a little suspect and hit or miss in terms of the education offered, but buying in the county means we could get more house and definitely more land. It also would mean we might be likely to place our son in one of the great local private $chool$ such as Carolina Friends or Durham Academy. After looking at homes both in the county as well as in district, we came to the decision to focus on homes in the district. The county homes felt too remote for our current needs and the dependability of "free," highly regarded public schools was quite a draw.

10/08

With a narrowed focus we began researching homes, first in the MLS system and then digging deeper using:

Google Maps with Streetview to understand neighborhood layouts and distances to important areas (e.g. family, friends, airport, and grocery stores)
Orange County NC Land Records/GIS to understand property dimensions, previous owners, previous prices paid, easements and tax districts

If the homes passed through these criteria, we would then take a look at them. This allowed us to be both selective and respectful of our and our real estate agent's time.

10/08

In late October we visited a house in the high end of our price range. It was in the Chapel Hill City school district in a neighborhood we liked. It was spacious with room to expand our family and sat on 3/4 of an acre. Additionally, it was one of a limited number of homes in Chapel Hill that has county taxes but is located in district. However, by this time we were looking for smaller homes that we could afford on 1 salary just in case the economic crunch caught us. So, we passed on it. The next day though the owner's realtor contacted our realtor and told us to bring any offer. So, we passed. The next day, we noticed they'd dropped the price $25k. An intelligent move to create competition and pressure us to bid if we loved it. But, this is not the market to fall in love. So, we passed. Meanwhile I found a foreclosure home that I fell in love with. It was at the peak of our range and needed lots of repairs, but geez it would have been a beautiful investment property. Our realtor was salivating at the prospect of buying it for herself. We were not alone. Before I could line up some co-investors, it was gone. The house was sold within 2 weeks (in these market conditions).

11/08

In mid November we decided to give the price-reduced house another look. I reminded my wife not to fall in love with it, but she really liked it alot. I reiterated that despite the price reduction, it was still a stretch buy. She understood, but still wanted to give it a try. So on 11/17, we bid. We made a bid over 10% lower than the reduced price and about 20% below the price when we'd first seen it. Basically a price unheard of in that area. The owners countered the next day with a shockingly low number that satisfied everyone...except me. The next day we met with our realtor and tweaked the offer a little. In the end our counter to their counter was only 2% higher than our first offer. And, it was accepted. All done in 3 days. What a relief after what we endured from buyers in NJ. We moved for a quick close, and it looks like we'll be able to do it in under 30 days. It's all paperwork from here.

So, should we have waited longer or bid less? Who's to say? We'd pretty much gone through all the available inventory, and there wasn't many others we were interested in that offered as much as this home. Bidding any less than we did, and we risk completely offending the sellers in a highly educated market and potentially losing the house. Even worse, they could've taken another price reduction potentially attracting other buyers, and there's no way we'd participate in a bidding war. Finally, I know that I'll probably be re-financing in the next 6 months once the appropriate contraction occurs in the credit spread between the 10 year note and mortgage rates, but that's OK. For now, I'll just get ready to relax in my new "man space" or perhaps sit out by the pool or maybe just jump in the hot tub...or perhaps I'll just meditate on the $2k+ we'll be saving per year thanks to the county tax rate. I think it'll be all good.

Buying General Electric

noreply@blogger.com (Slug) — Thu, 13 Nov 2008 20:03:00 +0000

I bought some more GE today for $15/share in my Roth IRA. I can't believe the prices on some of these companies. It's definitely a case of throwing the baby out with the bath water. And the dividend yields are incredible. Granted you have to make sure you're buying into companies that have a history of protecting their dividends. I believe GE is one of these.

Creating a Spending Plan or Budget

noreply@blogger.com (Slug) — Tue, 04 Nov 2008 16:34:00 +0000

Today's Wall St. Journal has an excellent article on how to make a spending plan. Please check it out. Amazingly, I just sat down for the first time to figure out our family budget a couple of weeks ago. There really has never been a need since we've always lived well below our means. However, as we become more serious about buying a home, it's paramount that we have a good understanding of what portion of our income is fixed versus discretionary. This is especially meaningful right now when food and fuel costs are eating away a much larger portion of discretionary income than ever before.

Catch a Falling Knife?

noreply@blogger.com (Slug) — Fri, 10 Oct 2008 20:14:00 +0000

Over the past week, I've begun nibbling. It started with GE in the low 20's. Target (TGT) was quick to follow. Today, I added to my Bristol Myers Squibb (BMY)position and started one in Pfizer (PFE). I also began the transfers needed to fund my and my wife's Roth for this year (another $5k each under the current rules). Those funds will be used to further nibble as we are hopefully coming close to a bottom/oversold environment where the baby stops getting thrown out with the bathwater. If things stay hairy, I'll likely start a 6 month CD ladder with the funds instead.

McDonald's Dollar Menu in Jeopardy!

noreply@blogger.com (Slug) — Tue, 29 Jul 2008 19:59:00 +0000

Today, I got an invitation to take a market research web survey all about my fast food habits. I'm not a big fast food eater, but with the recent relocation and all, I have eaten out at fast food joints a little more lately. Anyway, once my general habits were assessed the crux of the survey became obvious, McDonald's is considering a revamp of their Dollar Menu.

In the survey I was presented with the following scenario:

McDonald's is pulling its Dollar Menu. In its stead you can have 1 of 3 options:

The same items in the Dollar Menu offered at $1.19 and will now be called the McValue Menu. The items include:
Double Cheeseburger
McChicken
Small French Fries
Small Soft Drink
Sundae
2 Apple Pies
Side Salad
Fruit & Yogurt Parfait

A combination of some current Dollar Menu items (like Small French Fries or Small Soft Drink, but not Double Cheeseburger) and other new items all priced at $1 on a new Dollar Menu. Instead of the Double Cheeseburger, this Dollar Menu will have a new double burger - with two patties but only 1 slice of cheese.

A group of items with different value prices ranging from $1.00 to $1.49 featuring the following:
Double Cheeseburger at $1.19
Side Salad at $1.19
Snack Wraps at $1.39
Spicy Snack Wrap at $1.49
All other current Dollar Menu items including McChicken, Small French Fries, Small Soft Drink, Sundae, 2 Apple Pies, and Fruit & Yogurt Parfait are still at $1.

You can see where they're going with this, right? Price inflation. I only eat at McDonald's because of the Dollar Menu. And, I always get the double cheeseburger.

I chose option 2. They asked me what would happen if they then implemented this, and I basically told them I'd never eat there again.

Fight the power. Fight Dollar Menu inflation.

Getting Gamed by NC State Employee's Bridge Account

noreply@blogger.com (Slug) — Fri, 27 Jun 2008 19:29:00 +0000

Many of you will recall my excitement in early April when I moved my cash over to my bridge account which generates interest based on the returns of the S&P 500. June has proved what an absolutely brillian move that was (note sarcasm). Wow, what an awful month. I was really doing great until about mid-May. Prior to the point of yesterday's sell-off it was pretty much at break-even. Then it dropped another 3%. Yuck. Not a big loss really, just the 3.2% APY I would have gotten on $3k (so about $24). Oh well, I'll let it ride through next quarter and we'll see how it goes.

Litterbugs Suck!

noreply@blogger.com (Slug) — Fri, 23 May 2008 20:17:00 +0000

Since I've lived in NJ, a shitload of things have driven me nuts (see previous posts), but one of the biggest things is litterbugs. People throw everything out of their windows here. It's ridiculous. No wonder it's considered the armpit of America with all the litter!

At least when I was back in NC I had an outlet for my litter-rage. There we have the Swat-A-Litterbug program where you can report litterbugs to the highway patrol. In return, the highway patrol sends them an official letter detailing that a fellow citizen witnessed their littering activity and providing details on the fines associated with littering in the state. Yeah, I know they can just wad that up and throw it out their window too, but it's something. In NJ, there's nothing.

So, 2 days ago, I was on my way to work riding behind this Whited Chevy HH mini-SUV. The person in the front is smoking. I can tell by the chimney of smoke filtering out the window. A couple of turns later she flicks the cigarette (still burning) out the window (Can you say brush fire?). Fine, I see that everyday, and it sucks. "You suck." Then, she lights up again. And still we're driving (this is a NJ commute you know). A few minutes later she flicks that one out the window too. Something went off in me. I think I realized how many cigarettes she must throw out each day, each week, each year! Good God. I start honking. She gives me a really dirty look in the rearview mirror. I'm mouthing, "Why litter, why?" It probably looks like "You're hot. Keep smoking!" to her. She ignores me. But then, she gets caught at the light and I switch lanes to get right beside her. Her window is still down from the last littering episode. I roll down my window and ask "why are you littering". This unfortunate soul sneers and says, "it's just a fucking cigarette!" I say, "it's litter. it's against the law." She flips me off with one hand and rolls the window up with other, all the while talking on her cell (which is also a primary moving violation in NJ). She looks away and leaves her finger there for the length of the light. I smile for the duration.

In fact, I smiled all the way to work. I got nowhere with her. I know that. That's fine. But, the next time she's about to flick one of her death sticks out the window, maybe she'll think twice or think of me or maybe just check her rearview to see whose watching... You never know whose watching. Maybe it's me. And, next time I'll take your picture for all to see...

Is it any wonder I can't wait to leave this state?

Quick Update

noreply@blogger.com (Slug) — Fri, 23 May 2008 20:04:00 +0000

Today Pfizer (PFE) was below 20 so I tried to pick up 100 shares at 19.50.

Prsoper has been anything but prosperous lately as 2 of my new loans (a D and an HR) have gone late. Idiot dummy ***bangs head on wall*** Why do I keep doing this to myself? So what if they had on-time payments on previous loans. A D is a D. A HR is a HR. Duh. I need to start going to Stupid Funders Anonymous meetings again.

Sold my house. Almost. Just need to finish the repairs found in the inspection report. Can't believe the loss I'm taking.

I'll be out of Jersey in a month!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Awesome. Fuck New Jersey.

On Vacation

noreply@blogger.com (Slug) — Sun, 27 Apr 2008 20:57:00 +0000

Wish you were here

Back in a couple of weeks...

Roth IRA Portfolio Change: Adding Nvidia (NVDA)

noreply@blogger.com (Slug) — Tue, 15 Apr 2008 14:55:00 +0000

Today, I added 50 shares of Nvidia at the open. More to come on the reasons for this purchase...

If Only It Was This Fun to Actually Clean the House!

noreply@blogger.com (Slug) — Fri, 11 Apr 2008 14:12:00 +0000

My house is on the market. Yes, in this terrible real estate market, I am trying to move. We've actually been on the market since late January. We've done this before, but never during such a rough market (and never with a toddler). I do not envy my wife as she tries to keep our place show-ready while also trying to entertain our little hooligan. It's so much work and the payout comes with comments like "Your house shows beautifully, but we want a basement." Really? Did you read the MLS sheet? It's pretty clear that we don't have a basement! Or "Lovely home, we think we'll be ready to buy next year." Are you high on crack? I mean I just spent 2 hours digging couscous from between the wood flooring with my kid screaming for more Sesame Street while he's leaving new fingerprints all over the glass top tables I just cleaned for you to say that. Please, if you are a home buyer out there looking, have the courtesy to visit homes that make sense to your needs, visit when you're actually ready to buy, and give a call if you're not going to make your window because my little guy (and his dad) could really use a nap!

Roth IRA Portfolio Change VWO

noreply@blogger.com (Slug) — Wed, 09 Apr 2008 19:46:00 +0000

As I mentioned in an earlier post, I have been sitting on the sidelines as this market seems to go from bad to worse. Well, today I got off the sideline and took a nibble. I added 20 shares of VWO at $97 to my Roth IRA. The coming weeks....err months.....I mean years....oh I mean 3 decades will tell me whether this was a better decision than sitting on my cash. What do you think? A 30 year time horizon. I think VWO will do quite well.

VWO is the Vanguard Emerging Markets ETF. It basically mirrors the MSCI Emerging Markets Index so it's a well-diversified global play which should correlate poorly with my large cap holdings. Exactly what I'm looking for. It carries an expense ratio of 1.01%.

Prosper.com Time for Another Loan

noreply@blogger.com (Slug) — Wed, 09 Apr 2008 18:32:00 +0000

I know I said I'd be back with a Prosper update in about a month once I received enough in payments to fund a new loan. Well, here I am 11 days later with enough cash to bid again thanks to some of my debtors paying down large chunks of their loan early (including an E rated borrower from my wild west days who has fully paid their loan - thank you SeattleEditor). I'm also happy to report that all of my other loans (22) are current except one I had written off months ago.

So, let's take a look at the market and see what we can see:

Perfect Credit, 2nd Propser Loan, Current Prosper Lender - This is a no-brainer. Hands down, if you are a low risk lender, then this loan is for you. The borrower has no delinquencies, no public records, 0% credit utilization, no revolving credit balance, and a perfect record of payments on a previous Prosper loan. But, I'm not bidding. Why? 2 reasons. First, this loan is already fully funded and has almost 3 days left to get its already low rate (11%) bid down even lower. Second, the borrower paid off the first loan after only 8 payments. I emailed to see how long he planned to keep this one, and he admitted it was another short-term loan for while he relocates. This is an issue because I prefer loans that go the full 36 months in order to maximize my interest gains. So, I pass.
debt consolidation - I chose this loan because sometimes all you need to see are the numbers. This borrower chose to provide no information about the way the loan would be used or any information about who they are. The most I can tell you is their username is jsmith1450, they live in Florida, and claim to be a long-term employee of the construction industry with a high income. They're also offering a set rate on this loan at 15.55%. Given the visible credit history, this looks like a solid bet. And, I thought about it. The answer is no. Prosper is a peer to peer lending site. Part of the reason I like peer to peer lending is I get to know where the borrower is going to use the money (or at least where they say they are going to use it). So, if when looking at Bob's Kiddie Porn loan and Mark's Meth Lab loan all things are equal, I can then decide who's getting my bid. Sorry guys, I'm putting my money on Susan's Seal Clubbing Trip to Alaska.
Wedding Costs - Here's our winner. A blend of risk and reliability. A C credit grade but a high salary, no delinquencies, and a new wife to keep him in line :-) The 7 on time payments for the other Prosper loan don't hurt either. This loan has been bid down from 29.68% to 21.25%. My bid is in at 19.47%. With 3 days left, I may get bid out of the loan. That's OK. I'm not totally in love with it. There's plenty of fish in the sea.

This is my second review of my Prosper loan choices and both times now I've chosen someone with a prior Prosper loan as my winner. I don't want to get sucked too far down this road, but I have to think it's probably going to be a good predictor of default rate in the future.

Motley Fool Joins Forces with Mint.com

noreply@blogger.com (Slug) — Thu, 03 Apr 2008 22:57:00 +0000

This is kind of what I was worried about in my last post about the personal finance aggregators. Mint.com which is already user-friendly but somewhat limited in scope is now partnering with the Motley Fool. This will surely boost Mint's user base given the multitude of loyal Fools. Good for them. I still prefer Yodlee for its comprehensiveness, and most know by now that Mint actually uses the Yodlee platform. I'm afraid Yodlee could go the way of the dinosaur if they don't really get their name out there soon. Who knows, maybe they're content with that. It's really just a selfish wish for me because I don't want to re-enter my countless accounts and passwords over at Mint. Geezeo and Wesabe better look out too. This is a powerful combo.