Did you know that you can open a free individual retirement account (IRA) on Lending Club? It’s true. So if you’re craving an alternative to target-date mutual funds (and stocks, in general), consider adding social lending to your retirement plan.

What is Lending Club?

Lending Club is a peer-to-peer lending network that lets people like you and me lend our money to other individuals. To learn more, check out this Lending Club review or more about social lending networks.

Why a Lending Club IRA?

Lending Club’s average annual return is 9.5%. By their calculations, a single $15,000 investment could grow to over $250k in 30 years. Not shabby. Yes, Lending money is risky, but so is the stock market. And you have to consider that some economists predict stocks may not continue to offer the 10% 25-year average annual returns of decades past.

How It Works

You can open a Traditional IRA, Roth IRA, SEP IRA, or Simple IRA account at Lending Club, and you can rollover another IRA or an old 401(k). Once you have opened your account, you select how aggressively to invest and Lending Club invests your money into hundreds of indiviudal loans, often in increments as low as $25.

Learn more or open a Lending Club IRA account now.

What do you think? Do you invest in Lending Club? Would you consider using Lending Club as part of your retirement strategy? Why or why not?

When it comes to pulling the wool over customers’ eyes, banks issuing credit cards are the pros. And one of their favorite ways to trick you is to raise your credit card interest rate.

Although new credit card laws make it more difficult for the banks to do it, don’t think you’re immune to a rate jacking.

It’s best to never carry a balance on your credit card and, therefore, never pay interest. But if you do, and you have good credit, there is no reason you should be paying a high interest rate on your credit card balance.

Many times, credit card companies will lower your interest rate if you just pick up the phone and ask them to do so. Why will they do this? Because the credit card business is competitive, and your card issuer knows that smart customers could leave them at any minute. If your current credit card company wants to keep your business, they will be happy to work with you to lower your interest rate.

Before doing battle with your credit card bank, there are a few things you should do to ensure you come out on the best end of the conversation: Read more…

There are two types of investors in the stock market: growth investors and value investors.

Growth investors look to buy emerging companies with great growth rates. Value investors look for distressed companies that are trading at below average prices. Both types of investors can reap positive returns in the stock market. But what type of strategy is best for an investor in their 20’s? Let’s take a look:

Growth Investing

Google, Amazon, and Research In Motion have all been great growth stories over the past few years. These companies didn’t fly below the radar or trade at single digit P/E ratios but that didn’t stop them from being great investments.

Growth investors are willing to pay a premium for companies with growth rates that are above the industry average. The best example of a growth investor today is Jim Cramer. He loves stocks with above average growth rates that are blowing out analyst expectations. It is rare that you will find a great growth company selling at a discount. They are far more likely to be trading near their 52 week highs.

Value Investing

General Electric, Cheesecake Factory, and Bank of America were all risky investments over the past few years. These stocks were all trading for $5 or less just two years ago because of fears of an economic collapse. Read more…

Every week, I see home buyers make the same expensive mistake: they simply don’t shop around for a mortgage.

It’s a shame. When you buy a home, getting the right mortgage loan is just as important as the right house. After all, you’re going to make this payment for every month in the imaginable future. For better or worse, the interest rate you lock in and type of loan you choose will have an impact on your financial future.

My advice? Consider all of your mortgage loan options before making a decision. Here’s a quick guide to seven things to understand when shopping for a mortgage:

1. The Stages of a Mortgage Application

Pre-qualification: Before you even go house shopping, you can get a mortgage pre-qualification letter. Just call a bank and answer a few questions about your income, assets and debts, and the kind of house you’re looking at. The bank will write you a letter telling your Realtor and any prospective sellers that you should be able to afford a mortgage up to a certain amount. Having a prequal does not mean you’re approved for a mortgage; they’re informal and optional, but they just might ease sellers’ fears that financing will fall through if they accept your offer. Read more…

Editor’s Note: To avoid any confusion, Amber is not a new writer…it’s just the real name of the contributor formerly known as “Carrie from Carrie on the Cheap”. New name, same great writing. If you get a chance, check out Amber’s renamed blog Blonde and Balanced for more tips on saving money and living well.

These days, it’s trendy to be green for good reason. Take one look at the Great Pacific Garbage Patch, and it’ll probably change your views on recycling and using products like plastic forever.

For a long time, I didn’t recycle. My city doesn’t offer recycling pickup on trash days, so I didn’t think I even had an option to recycle. But, after I did more research, I realized that anyone, anywhere can recycle – it just might take some extra effort if a service isn’t conveniently offered by your city.

If you’ve resisted or ignored the movement towards greener living, it’s never too late to start doing a better job. Here’s how:

Read more…

Do you know when to sell your stock?

It would be great if you could buy a stock, bond, mutual fund, or exchange traded fund and just hold it forever. Sadly, this is not the case. With every investment, there will always come a time when you have to sell shares of stock.

But how do you know when is the right time to sell stocks or to stop adding to a position? Finding the right time to sell your investment can be tricky.

Let’s take a look at three signs that will tell it’s time to dump your shares.

1. Sell your investment when it the price gets too high.

You should never sell an investment (stock, mutual fund, ETF) just because the stock market is up. You should, however, sell an investment when you think the price has gotten too high. Read more…

Today, I want to tackle a common question: When savings account interest rates suck, how else can you get a return on your cash?

Here’s how one reader phrased it:

I’m a single young professional without any debt. I make a decent living. I have a 401(k), Roth IRA, and an emergency fund. Currently my expenses are the usual rent, food, car insurance, etc. The money I am saving is currently just sitting and stacking up in my savings account earning a minimal interest rate. I want a better return. What should my next investment move be? Stocks? Bonds? Nothing? And how much risk is involved? My next goal would be to buy a house within five years.

When I started this blog in 2006, the economy—and interest rates—were in an entirely different place. Many high yield savings accounts were paying rates of over 5.0%. Today, those same banks are paying less than 1.50%. Rates like those barely reward you for saving at all. But that’s not a conincidence: The government wants us to spend—not save—to stimulate the economy.

But twentysomethings are not the rest of the country.

We’re in a unique place in life. We’re trying to start emergency funds and save for first homes and retirement. Perhaps we’re paying off student debt. And we’re doing it all on entry-level salaries.

Regardless of what the economy’s doing, we twentysomethings still need to save a bit. And that’s hard to do when interest rates are so crappy.

Here’s a solution: Read more…

Here are stories from like-minded blogs I found interesting recently. Click on the linked summary to read the full story.

Own the Dollar: 83 money moves to make before turning 30 (Not new, but great…)

Financial Highway: Your credit card is NOT an emergency fund.

Five Cent Nickel: How to negotiate like a pro.

The Digerati Life: Should you invest in an Ivy League education?

Enemy of Debt: Please stop saying: “I don’t make enough money to do that!”

Generation X Finance: Five ways social media can cost you money.

Buy Like Buffet: Why there will never be another Warren Buffet.

20Something Finance: Seven benefits to downsizing to a tiny home.

Have you ever wondered how you can tell if a stock is selling at a good price? Financial programs and magazines are always saying that this stock is cheap or this stock is expensive. How do they arrive at these conclusions? Today, we are going to take a look at a few important metrics to determine when a stock is a buy or not.

P/E Ratio

The price-to-earnings ratio (P/E ratio) is the most important measurement of whether a stock is an attractive buy or not. The P/E ratio is the measure of a stock’s share price divided by its earnings-per-share. Company P/E ratios should always be compared against the average P/E for the industry.

Never compare P/E ratios across industry lines. Technology stocks, retailers, and restaurant stocks trade at higher P/Es than consumer staple and utility stocks. If the P/E ratio is lower than the industry average, the stock may be a compelling investment opportunity. If it is higher than competitors, it may be expensive. Look for companies whose current price to earnings ratio is below its historical P/E.

Earnings Growth

Pay particularly close attention to a company’s growth rate. Read more…

Earlier this year, a number of similar, frequently-forwarded emails frightened a lot of people. Here’s a snippet of one:

This should help stimulate the Real Estate market!

UNDER THE NEW HEALTH CARE BILL – DID YOU KNOW THAT ALL REAL ESTATE TRANSACTIONS ARE SUBJECT TO A 3.8% “SALES TAX”?

YOU CAN THANK NANCY, HARRY & BARACK (AND YOUR LOCAL CONGRESSMAN) FOR THIS ONE. IF YOU SELL YOUR $400,000 HOME, THIS WILL BE A $15,200 TAX.

Now that the healthcare bill has become law, do we need to worry about increased real estate taxes? After all, a 3.8% tax on a $300k home would be $11,140; the sale of a $750k home would be taxed $28,500!

The reality is that the Patient Protection and Affordable Care Act does require a 3.8% real estate tax on some home sales starting in 2013.

But don’t get upset just yet. Read more…