Lazy Man and Money

Lending Club Update: It’s Getting Better All the Time

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I signed into my Lending Club account today and I had this thought:

“I’ve got to admit it’s getting better, better… A little better all the time…” – Paul McCartney in the song Getting Better

I’m purposely leaving out Lennon’s response of “It can’t get no worse!” That was appropriate when I started doing my Lending Club updates in January. I was making 4.78%, which meant that 84% of Lending Club members were doing better than I was. In that article, I outlined the changes I was going to make. I’ve steadily seen my return climb. It was 5.90% in March. It was 6.42% in May. It’s the end of July now and it’s 6.70%:

Lending Club Update: July
Lending Club Update: July

(“Only” 76% of Lending Club members are doing better than me. Ugh.)

I probably could make that number jump a lot more by adding a ton of new money and investing as I have over the last few months, but I’m focusing on buying a new house. Since the beginning of the year I’ve put less than $500 in the account. The majority of the increase is due to simply reinvesting the payments from previous loans with the new philosophy.

In some ways, the growth from 6.42% in May to 6.70% now is a disappointment. I had gotten used to the big jumps early on. However, it makes sense that it will be tougher and tougher to move that number up. Perhaps my current strategy is typically good for “only” a 9% return in the long term. Since I still have a ton of loans on the books where I was lending money with the strategy that only returned 4.78%, the best I can do is hope to approach 9%. I expect it to be a year before I get to 7.75%. Fortunately, the new investor, you can jump in and take advantage of my miscues.

I will close this update with my typical reminder about peer-to-peer lending. No results are guaranteed… there is risk in investing in these loans. I believe that risk is minimized by diversifying amongst many loans (like how a mutual fund is diversified by investing in many company stocks). Pragmatically I look at it and think that if I’m getting 6.7% and 76% of people are doing better than me, it’s probably worth adding to your portfolio to increase your level of diversification. If you agree, give it a shot by signing up for Lending Club today.

Side Note: I still have a number of invites for free credit monitoring from Credit Karma that I offered yesterday. Go get ’em!

A Few Tips for Shopping at Estate Sales

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As it we get deeper in the spring, I’m looking forward to one of my favorite past times – yard sales and estate sales. I’ve written about how to save money with yard sales and even gave you a peak at how I built a room on Craigslist and Yard Sales. However, I haven’t talked much about estate sales. In some ways they are often better than yard sales. What is being sold is typically what someone has owned, not just what people have decided they no longer need or want. Often they are held due to the death of a relative. I like pretend that the person may just be moving and downsizing to a smaller house.

Here are a few tips that have helped me:

  • When shopping an estate sale be thorough – Many times you will find that special treasure inside of a box or closet. Make sure they are selling these items before you go digging into their closets though. Don’t drive by and assume there isn’t anything that you want. Searching through bins may offer you an unexpected item.
  • Be on the lookout for things that need just a little work – I am well, Lazy, but there are benefit for those who aren’t like me. Those who are willing to clean can find some quality items that require a little scrubbing or fixing. Old furniture can be new again with a new coat of paint, or if you have the time stripping a piece of furniture and refurbishing it can become a great hobby. It is an inexpensive way to beautify your home.
  • Ask for a bargain – Just like yard sales, when you purchase items at an estate sale you can (and should negotiate). If you are purchasing several items, request a discount for all of your finds. If you have arrived at the end of the sale your bargaining power is greater as people are typically looking to get rid of things by the end of the day. However, I recommend showing up early – you want to be the bird and get that worm.
  • Keep a budget in mind – It can be easy to overspend when you find many treasures. If you are like me, you sometimes come home with a bunch of stuff that seemed like a good idea at the time.

In the end estate sales have some major advantages over buying new. It’s often much cheaper. You can find more unique products (as opposed to having the Ikea or Crate and Barrel bookshelf that everyone has). You give item another life – recycling and reusing is good for the environment. Finally, it’s fun to find a bargain.