Financial Fortune Guide

Reader Questions on Prosper

2008-07-17T05:31:00.001-07:00

Reader Kevin asks:

Hey there, I just signed up for Prosper yesterday. I’ve been skeptical since the whole registration process asked for access to my bank account, and now I’m reconsidering after reading your post.

Is it worth the hassle? Or is this really just a gimmick to net a few pennies extra?

Dear Kevin,

Let me address the second question, is it just a gimmick? No, it’s not a gimmick. it’s the real deal and real money. Is it worth the hassle? Well, that’s a horse of an entirely different color. You seem to have reservations about linking to your bank account, however, to do all your transactions, Prosper wants to transfer money to/from a legitimate bank account.

That’s your first hassle and it seems a pretty low barrier to entry to me, that’s why I signed up. It’s no different than signing up with PayPal or an online bank like ING Direct. (If you want an ING referral I still have some. Please leave a comment and I will privately email you.)

As far as the rest of it being a hassle, well, I am making about 5.8%APR right now. (You can see me on LendingStats.com) Before one of my loans went into late status, I was actually making something closer to 15%. I just had a loan payoff as well, so that’s probably also depressing the rate of return at the moment. But either way, 5.8% is way better than my online savings bank. Or the stock market this year. I’m willing to assume some risk here for a better return than I can get anywhere else at the moment. (Heck, even my condo is upside soon with all the condo foreclosures/short sales in my area. I checked what’s for sale in my building and I’m definitely upside down by those list prices.)

Though I’m feeling cold about the one borrower who is and has been late, I am willing to take on that risk. It’s up to you to decide your risk aversion. I’m not risk-averse when it comes to investing. I hold zero bonds. But I am extremely risk-averse about other things in life, like motorcycle riding. I wear full gear head to toe. If it’s too hot to wear it, it’s too hot to ride. Period.

So, only you can really answer the question of if it’s worth the hassle. Ask yourself what rate of return you want and if you think you can realistically get it from Propser lending.

Reader Mary asks:

I was considering putting some money into Prosper but was a little leery. I also feel like I should use whatever I can to pay off my credit cards - but I noticed you still have cc debt too, so I was wondering how you figure out how much you get to play around with investing?

Dear Mary,

If you read about investing, you’ll find that most places recommend utilizing no more than 10% of your investments for doing something like Prosper or buying and selling stocks. The other 90% of your portfolio should be in index funds, bonds and professionally managed stuff. I’m inclined to agree with that advice. Ask yourself what you have to invest or what your total investments are. If you have $10,000.00 sitting in a bank account, use only $1000.00 for investing.

I’ve written about this before, but let me reiterate, I have about $300 in Prosper. I have more money saved up in my emergency fund than that. Heck, my monthly dining bill is more than that. This money was never going to go to my credit cards. If so, I would have sent it in by now. If you have credit cards, you should probably pay that off first. That’s what conventional personal financial wisdom would tell you. (At 15%APR though, I was better off with Prosper. My highest credit card rate is 11%. You’d have to figure out what rate of return you needed to beat your credit card interest rate, figure in taxes, etc. Do your math.)

The investment in Prosper represents about 1% of my total savings/investments. It’s not a lot. I’m not sure where you are at, but if you’ve only got $1000 saved, you might not want to put it in Prosper. If you only have $50, again probably not a good idea because Prosper’s minimum lending amount is $50, and that would is a poor risk management strategy. (It’s called ‘putting all your eggs in one basket.’)

None of these questions are easy. That’s why this blog is marked as a Fiscal Challenge. I’m not that great at it either. If you’re looking for real professional advice, try writing in to a CNN/Money or Kiplinger’s, or go see a financial advisor who has a CFP or some sort of professional license. (Series 6 for stocks, Series 7 for insurance.)

Addressing the Calling Cards Mania

2008-07-17T02:31:00.001-07:00

There is no denying the growing popularity of calling cards across the world, among both residentials as well as from different sectors of the industry. Whether you want to call your long distance sweetheart or an overseas client, calling cards are the most beneficial solution. Using fixed line telephones end up costing you almost the double of what calling cards charge for long distance international calling. Add to this the trouble of finding a fixed line phone when in a different country with a different native language. Most of the hotels usually add a hefty service tax in your total billing amount thereby making the bill to shoot up higher.

On the other hand, international calling cards are not just one of the most cost effective and easy way of calling but they are available in every second grocery shop round the corner.

Who Uses Prepaid Phone Cards

Calling cards have got a vast market. Not just residentials but even corporates are utilising this cheap method of calling long distance. Whether you are out on a business trip or to want to call overseas prepaid calling cards is definitely the best way out.

Overview Of Phone Cards Business

Keeping in mind the high level of investment that goes into selling calling cards, number of IP telephony providers provide a fully equipped and ready to use calling card platform. This hugely cuts down on the level of investment and risk.

Selecting The Best Phone Calling Card Platform

One should always look for a provider who can help you to easily start selling the cards to your target audience. Sooner your provider can help you to start marketing, the better it would be for your business. The calling card platform essentially allows you to generate and manage PINS for the card. A feature to look out for, is the online billing panel. It gives you the benefit and the convenience to manage the accounts of your customers whenever you want 24x7.
Link

John Reese Has Done It Again…

2008-07-16T23:31:00.001-07:00

Internet Marketing pioneer, John Reese, has been somewhat quiet for the past few years...

And now I know why.

Many marketers remember John Reese's somewhat ‘famous' “Traffic Secrets” launch back in 2004.? You know, the one that created the “Million Dollar Day.”

And most remember the huge amount of success stories that were created from people that got the course and put it to use.

Well, little did most people know that John has been quietly testing hundreds of ALL-NEW traffic methods and strategies to take that original course to another level.

He wanted to take advantage of all the powerful opportunities of Social Media, Video Marketing, Content Syndication, and much, much more.

He just posted a new video that you need to go and watch RIGHT NOW:

http://www.trafficsecrets.com/lhayes

Aside from all the great content that he shares just check out the VIDEO STYLE itself.

One look at this video and you'll get a good idea of where the future of Video Marketing is headed.

It's really impressive.? Check it out:

http://www.trafficsecrets.com/lhayes

P.S.? You can actually go and watch TWO videos right now by visiting this link:

http://www.trafficsecrets.com/lhayes

Pros and Cons in Selling On Ebay

2008-07-16T20:31:00.001-07:00

The customary way of earning, which we’re been widely introduced, is the buying and selling of products. Before, for sellers, internet was only used for advertisement, marketing strategy or reference for their customers. But now, the Internet alone can be your shop and advertisement at the same time. You can now afford to just stay at home, wait for orders to come. That’s a lot easier. You even don’t have to use a mammoth PR to convince your customers. How good is that? These are the wonders of eBay.

eBay is the selling sphere in the internet. Everyday, huge number of sellers and buyers trade through eBay. But, before you jump on this online auction, take a look on the pros and cons of selling on eBay.

PROS
Easy to register and to create account
It’s as easy as the 1-2-3 step. Once you have created your eBay account, you can start listing your items.

Very Google-able
When you google your products, you can possibly find your item because of the popularity of eBay. And, even on the first page of your search, you could found the eBay Items.

Not too picky
You don’t need to sell those expensive and posh products. In fact, most of the products sell on eBay are pre-owned. It’s synonymous to easy access garage sale.

Easy transfer of payment via Paypal
Paypal is an e-commerce business allowing payments and money transfers to be made through the Internet. PayPal acts as the middleman between the buyer and seller, to finally execute their transaction. And, the good thing about PayPal, it is affiliated with eBay.

Develop your marketing skills
For beginners, regardless if you’re selling online or through actual retail stores, eBay is a training ground in enhancing your marketing strategies. How? By merely creating your market, gaining good feedbacks and loyal customers, definitely you’ve succeeded being an exceptional seller.

CONS

Huge world of competitors
Because of the accessibility of eBay around the globe, no wonder that large number of sellers will sell the same products you’re selling. This is the time you’ll use your marketing skills by offering the best service your customers will ever had.

Techie-challenged
Although you can use the normal text on selling on eBay, still, flamboyant ads will encourage more buyers to bid on your product. However, eBay requires the use of HTML which is not too friendly with those non-techies. The best way to resolve this is to download an HTML editor like Coffee Cup. If you have account in Multiply or Blogger, you can use them to convert your normal text to HTML codes.

Spammers/Joybidders/Bogus
Well, what can I say? These people are everywhere.

Fees to sell
In ebay.com, to be able to sell worldwide you have to pay for certain amount, which will be directly charged on your credit card. By the way, credit cards are definitely required to be able to sustain account on eBay. Although, the fee is relatively low as compared to rent fees you’ll pay in stalls, still, you have to focus on increasing your sales to compensate these fees.

Too early, too soon.
Since eBay is an online auction site, there will be number of days to end the auction. Although, it has the “Buy It Now” option, but only for those sellers who already made more than 7 feedbacks.

With the above pros and cons, it’s still up to you how to treat them in making it big on eBay. These are only points to remind you that earning money is easy, if you’ll put all your creativity, efforts and patience. eBay is actually doing a favor to us in making it as a medium in being and growing rich. One more thing I liked most with eBay, the customers are not always right here. The Sellers and Buyers compromise. So, start selling now.

Dollar Slides as US Housing Recession Deepens

2008-07-16T11:31:00.001-07:00

The lack of improvement in the housing sector continued to weigh on the US dollar, and kept traders from bidding the currency before the extended holiday weekend. Looking at price action, the low yielding Yen and Swiss franc rounded up the biggest gains against the US dollar. In turn the euro regained its footing and pushed back to yesterday highs just short of 1.58. The British Pound however held steady throughout the session as growth concerns led the currency to hold in the 1.98 range. The greenback also declined against the Australian and New Zealand dollar as commodity prices pushed higher - though the Canadian dollar didn't join the crowd as traders squared their books for the weekend.

On the economic front, the National Realtors Association's existing home sales report dampened hopes that the worst housing recession in a quarter century may be coming to an end. Sales fell 1.0 percent in April - posting its eighth consecutive decline in the past nine months. And, though this figure did have a positive side in that it was better than the 1.6 percent drop forecasted, the details of the report clearly spelled out a deteriorating market. Buyers continued to search out bargains though the median housing price dropped 8.0 percent from the same month a year ago. Interestingly enough, prices actually rose on a monthly basis for the second time, which may have in turn led inventories to rise to a new record high.

Rising commodity prices mixed with falling home prices pressed on the stock markets, and led investors to cutback on high risk-reward investments. As a result, the DJIA fell 145.99 points to 12,479.63 points, with 27 of the 30 components declining. The broader S&P500 also slipped 18.42 points to hold off at 1,375.93 points, with 172 stocks falling to a new 52 week low.

Heightened economic concerns fueled demands for US Treasuries, and led risk-adverse investors to seek the safe haven of risk-free bonds. As a result, the benchmark 10-Year yield fell to 3.852 percent from 3.911 percent, while the 2-Year yield plunged to 2.446 percent from 2.528 percent.

US capital markets will be closed through Monday due to the Memorial Day holiday; and the dollar will suffer from the low liquidity and could experience high volatility in turn. When US-based traders return to the markets, fundamentals will be there to meet them. Tuesday is packed with the S&P/Case-Shiller housing data, new home sales report and consumer confidence. Looking over the entire week's listings, there will be particular interest in the first quarter GDP revision which is expected to benefit from a boost in consumer spending and exports.

DailyFX

Foreclosure Fish

2008-07-16T08:32:00.001-07:00

8 May 2008 - This is one of the more interesting Wall Street Journal stories the Prince has seen this year.  Now if we could on find a fish that could eat up all that toxic mortgage paper and take out the pipeline of bridged leveraged loans.

Planning a vacation at home

2008-07-16T05:31:00.001-07:00

This post is part of a “Summer Fun Guide” group writing project by the Personal Finance Network. More articles on the subject are at the end of this post.

Summer fun doesn't have to include an expensive road trip, a long airplane flight after braving security lines, or endless choruses of “are we there yet?”. You can have fun by staying right at home, without the hassle. And with fuel prices being what they are, enjoying a staycation instead of a vacation is becoming a more and more attractive option. (Although it's always been an attractive option to my husband — those are his favorite kinds of vacations.)

You can choose to literally stay at home, not even leaving your house, or you can choose to play tourist in your own town by taking in the local sights or enjoying the pool and spa at a neighborhood hotel. Choosing to stay in the area will help save you money too. You won't have to pay for additional gas or expensive airfare, and if you stay in your own house you won't have to pay for lodging or pet and house sitting services. In either case, a little bit of planning will help to make your summer staycation fun.

Here are some things to keep in mind:

Treat it like a real vacation. Take off from work, and tell family & friends that you're on vacation and unavailable during that time period (unless they'll be vacationing with you.)

Unplug and disconnect. Don't be tempted to sit at the computer all day or constantly check email. Vow to either ignore the internet altogether, or designate 10 minutes once a day to do so if you just can't bear the thought of possibly missing something.

Pay all bills ahead of time, and have your mail held while you are “gone”. This will cut down on distractions and allow you to relax.

Plan out crock pot meals or restaurants to eat at ahead of time, so that you aren't stuck cooking instead of relaxing. Or take turns having each family member be responsible for a day's meals.

Contact your local tourist information office or AAA to get a list of area attractions. Another advantage of staycations is that residents often receive discounted admission to attractions. You can also scope out a hotel lobby for brochures and lists of upcoming events.

Use this opportunity to explore what your own area has to offer. So many times we pay a small fortune to go explore somewhere new, when there might be some gems right in our own neighborhood that we could see for signficantly less. (I realized once while on vacation in Germany that I'd never seen the Grand Canyon or Monument Valley, despite having lived within driving distance of both for many years.)

Most of all, relax and enjoy.

For more financially-fit ideas on having fun in the summer, take a look at these articles:

Tips for packing light, especially when flying with young kids

Money movies to watch this summer

10 Free Ways to get into Fitness this Summer

Cool frugal ideas to stay away from the heat

Frugal fun ideas for kids

Companies where P Note exposure is High !

2008-07-16T02:31:00.001-07:00

Fallout of P Notes continues to haunt the markets

Following are some of the companies where the P Note exposure is considered to be relatively higher and investor should keep above in mind while dealing in these shares. These stocks can witness bouts of unwinding (though not necessary at same time) and hence investors should be careful while taking a decision to invest or otherwise.

India Bulls Financial Services

ICICI Bank

HDFC

Bharti Airtel

Reliance Capital

Reliance Energy

Financial Technologies

SAIL

IVRCL Infra

Gateway Distripark

Aptech

BHEL

(Please note, this is not an exhaustive list)

Mission Accomplished: TheFinancialWhiz Starts a Financial Career

2008-07-15T23:31:00.001-07:00

In my post “Follow The Financial Whiz: The Countdown Begins Going from College to Career,” I set a goal to obtain a job offer by my graduation date of December 16, 2007. I am proud to say that I have achieved that goal.

I was offered positions with two very respectable firms, and both opportunities would have allowed me to continue dealing with investments. I have decided to join the Pennsylvania State Employees’ Retirement System as a Junior Investment Analyst specializing in private equity and venture capital investments. I feel that this position will allow me to continue to expand my knowledge into some of the most fascinating areas of investing. The position has me moving to the Harrisburg, PA area where I will be looking to continue to grow as an individual and as a professional.

The job opportunity was the direct result of the successful 8-month internship that I completed with the retirement system back in 2006. I felt that this opportunity would provide me with a workplace where I feel comfortable as I already know a lot of the expectations and procedures.

The decision was not an easy one to make, and anyone who has been around me the past two weeks can attest to this. The next couple of weeks will consist of me transitioning from my home here in Indiana, PA to my new home in Harrisburg, PA where I hope to settle in after the New Year.

I hope to post some updates from time to time as to my progress in the transition period, along with some new trading ideas that I have been cooking up in my head over the past couple months.

Thanks for all of the support that you, the readers, have shown me over the past 4 months to get to this point.

Bryan

Canadian Inflation Unexpectedly Rises

2008-07-15T17:31:00.001-07:00

Canadian annual inflation unexpectedly rose 1.7% in April from 1.4% the month prior, for the first time in six months. Consumers shelled out more money for gas, transportation and food. The core index, which is the focus of the BoC, to 1.5% from 1.3% in March, Record fuel costs may be helping the Canadian economy, but they are diminishing the purchasing power of consumers, as the energy component rose 4.9% from 2.7% the month prior. The MPC will now have to contend with inflation concerns and slow growth as its counterparts are across the globe. Growth in the region has remained resilient on the back of the commodity boom, which has spurred hiring. Therefore, the central bank may look to pause its easing policy as it assesses the risks of rising prices.

DailyFX

2008 CONUS COLA rates

2008-07-15T14:31:00.001-07:00

A few months ago, I posted about CONUS COLA, as it was a new entitlement for Mr. Dimes. For the uninitiated, CONUS COLA is a taxable income supplement for living expenses in an area (as opposed to housing expenses, which are covered by BAH). It increases or decreases every year, and can appear or disappear altogether for certain areas. For 2008, a handy calculator is available at this site. An official list of sites receiving COLA as well as the percentage rate can be found on this Pentagon site, where the list is a PDF file. If your location is not listed, you are not eligible to receive CONUS COLA. A handful of locations that were previously receiving it lost it for 2008, though they may get it again in future years.

Things will get better; it just takes time, expert says

2008-07-15T11:31:00.001-07:00

By Newsday
July 06, 2008 6:00 AM

The stock market has plummeted this year on high oil prices, a credit crunch, a weak housing market and rising unemployment. Paul Larson, editor of the Morningstar StockInvestor newsletter, spoke about these issues with Newsday:

Q: The Dow is down about 20 percent now, in real bear territory. Have we hit bottom here?

A: Your guess is as good as mine as to what the stock market is going to do short- to medium-term. But long-term, the market is undervalued and will go up.

Q: How did we get to where we are today?

A: Perhaps the thing that started this whole mess was the real-estate market popping. With real-estate values coming down, there was a contraction of available credit. That impacted consumer spending. When you combine this with high oil prices, which raises the cost of everything, that eats into consumer discretionary spending. Now you're seeing unemployment going up.

Q: How does all of this affect investors?

A: As in any economic situation, there are going to be winners and losers. Some companies do better than others, such as the oil companies. But then there are others not doing so hot, like those in the retail sector. But even within that sector, some are doing well, like Wal-Mart and Costco, as people trade down from luxury to just affordable.

Q.: Oil stocks would seem to be a good investment right now, if you can afford them.

A.: Well, you have to be cautious. ... There is some debate as to whether we are reaching peak in oil prices per barrel.

Q.: What sectors would you stay away from?

A.: Maybe the airlines. This is a sector that doesn't appear to have any competitive advantages at all. They're facing very difficult dynamics and huge cost increases because of the price of oil. There's going to be some capacity rationalization. Capacity rationalization is never pretty and always painful.

Q.: What has to happen to pick up the market?

A.: It all started with real estate, and it has to end with real estate. When real estate stabilizes, you're going to see credit losses at banks stabilize, and perhaps we'll even start to see an expansion of credit again. People may then start to spend a little more. This may give the Fed (Federal Reserve) a little more breathing room to raise interest rates and head off inflation.

Q.: What do you expect from the next Fed meeting?

A.: I would expect more of the same, no change in rates, but talking about inflation. Thus far this year, inflation has not been their primary worry. But they have finally acknowledged inflation is a problem and they're going to have to do something about it.

Q.: Then you think a rate increase would be a good thing?

A.: It would mean a strengthening of the dollar. If the dollar did regain some strength, that would also provide a little relief from oil prices.

How To Flub A Job Interview--Follow This Advice

2008-07-15T05:31:00.001-07:00

Personal finance columns drive me up a wall. Here is a doozy of bad advice. We'll take it point by point.

Five Ways to Flub a Job Interview

by Penelope Trunk

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