Tonight, I attending the first ever Bay Area Lending Club Investor’s Event.  This event further solidifies my belief in the company and the peer-to-peer lending model.

Lending Club enables individual investors and well-qualified borrowers to get better rates than with banks or credit card companies.  Their straightforward, online approach operates at a much lower cost than the big banks.

It’s no secret that bnks are now charging people with good to excellent credit 15% - 25% interest for loans and credit card debt.

Lending Club offers a better alternative with a simple and transparent model that leverages 50 years of credit default trends to set interest rates.

The result is that Lending Club facilitates loans at an average rate of 14% — a lower rate than most creditworthy borrowers pay on their credit cards today.

And Lending Club investors have earned an average of 9.05% in the last 20 months!  That’s because when you cut out the costs of traditional financial institutions’ overhead and complexity, you end up with a better rate for borrowers and better returns for investors.

BONUS: Lending Club will give you a US$25 bonus when you sign up to start investing.  This bonus is to encourage you to try the site and is available for you to invest in Notes right away.  Check it out and let me know what you think.

Here’s a neat article from David Randall on Forbes.com.  I’ll quickly summarize the seven lessons below.

1. Owning individual stocks is gambling — not investing.  Consider owning index funds.
2. Waiting to contribute to a retirement account will cost you.  Don’t turn down free money in the form of a employee-sponsored 401K program.
3. Knowing what you own in a 401K is just as important as starting one.
4. Make more than the minimum payment on your credit cards.  Or, better yet, pay off the full balance if you can.
5. Your credit score matters more than your SAT score.
6. Saving is a form of freedom.
7. You can get almost everything cheaper.

Starting off on the right footing will give one a leg up on others just entering the workforce.

We are pleased to announce our own economic stimulus package for several lucky, loyal supporters of this Blog.  Through a partnership with the Hatchette Book Group, we are going to give several FREE copies of the books below.

Qualifications

Winners will be selected randomly this month from the pool of legitimate, registered users who post a meaningful comment to this article.  Feel free to write a short comment why you should win a free copy of this book and how it will help you.
Right on the Money: Financial Advice for Tough Times
by Pat Robertson

Description

You know that Pat Robertson is a world-famous televangelist, but did you know
that he’s also an expert in financial matters?  Now he has written a book that is accessible to everyone and provides answers people desperately need in today’s tough times.  Among the topics he addresses are how to:

Create a healthy financial plan

Devise spending strategies tohelp you live within your budget

Identify areas where your money can grow

Build a nestegg

Maximize your tax savings

Cut costs

Diminish your debt

Invest wisely

Make prudent financial decisions

Plan for the future

Enjoy peace of mind and God’s financial protection

RIGHT ON THE MONEY also includes a financial glossary, worksheets and a special section of the most frequently asked questions & answers about keeping what you have and growing your personal net worth.

How Successful People Think: Change Your Thinking, Change Your Life
by John C. Maxwell

Description

The perfect, compact read for today’s fast-paced world, How Successful People Think (derived from Maxwell’s previous book, Thinking for a Change) guides readers through the 11 secrets successful people know. Arranged in an easy-to-follow format, America’s leadership expert John C. Maxwell will teach readers how to expand their thinking and achieve their dreams. The 11 keys to successful thinking include: Big-Picture Thinking - seeing the world beyond your own needs and how that leads to great ideas Focused Thinking - removing mental clutter and distractions to realize your full potential Creative Thinking - thinking in unique ways and making breakthroughs Shared Thinking - working with others to compound results Reflective Thinking - looking at the past to gain a better understanding of the future.

A recent article by CNN Money staff writer, Ben Rooney, shows a decline in the number of American households with a net worth of a million or more.  According to the article:

“The number of American households with a net worth of $1 million or more, excluding the value of their primary residence, fell 27% to 6.7 million in 2008 from an all-time high of 9.2 million the year before, according to a report from market research firm Spectrem Group.”

The culprit for the loss is not just the stock market but a broad decline in asset classes available to wealthy investors.  It is estimated that millionaire households have suffered an average loss between 30 and 40%.

As a result, a majority of those surveyed are shifting investments to safer assets such as cash.  It just goes to show that in times like this cash is king.

It’s time to do some financial planning for next year.  Here are some interesting trends to consider:

1. The minimum credit score to get the best rates and limits will rise.  Your best move: Review your current credit score and take steps to improve it.
2. Credit reform measures are coming which may impact credit card promotional offers.  Your best move: If you’re carrying a balance and paying high interest rates, seek offers that provide more favorable rates for the life of the loan.
3. Existing credit cardholders will be squeezed.  New applications and existing accounts will be under heavier scrutiny for risk.  Your best move: Pay on time and/or ensure your statement balance is well below 30 percent of your limit.  Complain if you notice any sudden rate hikes and adjustments.
4. Rewards programs may be scaled back.  Watch for any de-valuation in points where it takes more points to earn the same reward.  Your best move: If you have any points or miles, cash them in sooner rather than later.  Consumers have little recourse if the program is abolished or the terms change.
5. Fewer direct mail solicitations by card issuers to acquire new members.  Your best move: If you do not enjoy receiving credit solicitations by mail, go to www.optoutprescreen.com to take further action.

Source: Leslie McFadden