Don’t Own Stocks? You Should (With Loyal3)

Aug. 04

This blog is all about careers in marketing. Why then, do I spend so much time on personal finance? First and foremost, I love personal finance. Second, I believe personal finance is key to your career (it’s a great topic to discuss with executives) and your longevity (invest wisely now and you could retire while still a relatively young marketing professional). I’m truly excited to introduce Loyal3 today, a disruptive game-changer.

What is Loyal3?

Invest

Loyal3 is an SIPC member stock broker that makes investing accessible to everyone (including you). Ever want to buy an individual stock but don’t want to pay commissions? Loyal3 charges no commissions by batching your order with others (they execute fewer trades this way), and receiving compensation from companies. Brands pay Loyal3 because smaller, loyal shareholders mean less volatility in share price and consumer brand loyalty. (Hmmm… Wait a minute, I think I have been drinking more Starbucks since I started purchasing SBUX via Loyal3. Loyal3, you got me!)

Ever want to buy stock but don’t have enough money to buy a single share (especially for more expensive issues like GOOG and AAPL)? Loyal3 allows you to buy fractional shares, starting at a minimum investment of $10 per trade. Ever want to buy stocks, but don’t know where to start? Loyal3 offers only the biggest and best brands (about 50 stocks are offered for purchase. (While some may see this as limiting, I see it as pure clarity. I’m personally all about the big brands that pay big, growing dividends. Maybe it’s because I’m a marketer and truly admire a great brand…)

In other words, Loyal3 removes all barriers that have ever kept you from owning individual stocks. In my opinion, no business professional should say, "I don’t own individual stocks", with this cool new invention called Loyal3.

Loyal3 also offers the ability for small investors to participate in IPOs. I wanted to call this out because it’s incredibly cool, but didn’t want it to be the focus of today’s post because I prefer a brand-driven, long-term strategy. (Many are in IPOs for a quick gain, only to sell the issue later.)

PPC Ian’s Personal Loyal3 Strategy

So how am I personally leveraging Loyal3? As a long-time investor and finance enthusiast, you may be thinking, "PPC Ian probably already has a broker. Does he really need another one?" My answer is, "Yes and yes!" Here’s why:

I can buy via credit card and earn rewards points. You read that correctly: Loyal3 allows investors to purchase stock commission-free via credit card. Due to the rewards points, not only am I avoiding commissions, but I’m essentially being compensated to buy stock in my favorite brands. Loyal3 limits credit card-based trades to $50, however you can execute as many as you like. I’m actually in the platform buying stock almost every single day, sometimes multiple times in one day. (I see this transaction size limit as another benefit, see my later point about dollar cost averaging.)

Before we move on, two incredibly important points about credit cards. First, always pay your balance in full each and every month. Leverage your card for points, but do it responsibly. You don’t want to go into debt to buy stock. If you’re in debt already, pay your debt off first.

Second, please don’t use Loyal3 as a churn-and-burn platform. I have read some blog posts about how some individuals are buying stock via credit card and then selling as quickly as possible. They are using Loyal3 to hit their spend thresholds to achieve sign-on bonuses for credit cards. I feel like this type of activity is against the charter of Loyal3 (creating loyal shareholders) and is a deceptive practice that could hurt this cool, little brokerage. Get those points, but only do it if you’re a real, long-term investor and plan on holding your stock. Let’s do the right thing here so this credit card option is around for a long, long time (for those of us who use it responsibly).

As hinted at above, another big aspect of my Loyal3 strategy is dollar cost averaging. It’s difficult (impossible perhaps) to accurately predict the future of the overall stock market, and individual stocks too. Dollar cost averaging is all about risk mitigation. With no commissions to hold you back, I like to buy many smaller lots on a very frequent, recurring basis. Odds are, I will be buying when prices are high, medium, and low (my favorite scenario). It’s the average that matters, and I’m not going to buy the absolute market top in one big lot this way. Moreover, dollar cost averaging creates discipline. I’m buying rain or shine. This is possible with traditional Internet-based discount brokerages on perhaps a weekly or monthly basis, but definitely not a daily basis, at least given the size of my investing budget. (The fees would be way too high Asa percentage of my dollars invested.)

The final pillar of my Loyal3 strategy is one of simplicity and record keeping. In other accounts, I already own some of the stocks that Loyal3 offers. I was very close doubling down and setting up some recurring buys in Loyal3 as well. However, I then realized the record keeping would get too intense: (Recurring) buys of the same stock across different brokerage accounts. I concluded to simply focus on stocks I wanted to own anyway, but didn’t already have in other accounts. Why not keep things easy on myself? While I don’t plan on selling, I’m very much an advocate of impeccable records.

In sum, I’m really excited about Loyal3. I guess I’m a finance geek at heart, with new innovations like Lending Club and Loyal3 topping my list of favorite inventions in the last few years. Now, combine a Loyal3 strategy (stocks) with a Lending Club strategy (loans), and you’ve got a really rockin’ portfolio strategy!

Disclaimer: Long SBUX
Disclaimer: I’m not a financial advisor. This is not investment advice. This is for entertainment purposes only. Please contact your financial advisor before making any investment decisions.
Image of invest © iStockPhoto – frankpeters

Lending Club and Digital Marketing Professionals

Jul. 14

For those who have been reading PPC Ian for a while, you know that I’m a fan of investing. Investing is a passion of mine, and it makes sense, it’s all about the numbers (just like customer acquisition marketing). Today, I wanted to write about Lending Club (affiliate link, I earn a commission and would be very grateful if you open a Lending Club account via my links), and why Lending Club is especially relevant to those of us in the digital marketing field. Disclaimer: I’m not a financial advisor and this is not financial advice. Please consult your own financial advisor before making any investment decisions.

First, an update…

I started writing about Lending Club back on February 26, 2012. Some of my historical Lending Club Posts:

Lending Club Net Annualized Return

When you look at my historical posts, I like to include a screenshot in each that shows my account stats, especially my net annualized return. Here’s how it’s trended:

  • Feb 26, 2012 Net Annualized Return: 13.16%
  • Apr 23, 2012 Net Annualized Return: 12.99%
  • July 3, 2012 Net Annualized Return: 10.76%

So what’s my current net annualized return after several years of investing via Lending Club? I’m at 7.64% as of July 13, 2014. This isn’t as good at the 13.16% from my first post over 2 years ago, but certainly isn’t bad given current interest rates available via other alternatives. Moreover, my net annualized return has been trending in the 7% range for a while now (I feel like it’s somewhat steady in its current range). I’m happy with my performance and expected it would even out in its current range for a few reasons:

  • New accounts have very few defaults because they are new. Over two years later, I have experienced a handful of defaults. These are to be expected and have lowered my overall return. We’re comparing a mature account to a brand new one.
  • My principal and interest reinvestments have largely been focused on lower-risk loans. These carry lower interest rates. I wanted to start building my portfolio with a low-risk base, and layer in higher risk loans once the base is established.
  • In today’s market (more on this later), 7.64% net annualized return is no joke, that’s a great number, one that can generate some serious returns when compounded over time for a number of years. I’m hoping it holds in this range for the long-term!

I’m adding to my Lending Club portfolio, and it complements my digital marketing career

These days, I’m focused on building my Lending Club portfolio for a multitude of reasons. I wanted to share why I think it’s great for digital marketing professionals and why I’m so focused on Lending Club.

  • Did you know that Google Invested In Lending Club? As a digital marketing professional, I watch Google very closely, not only their core Search business, but their investments across-the-board. Google’s investment in Lending Club makes Lending Club even more relevant for those in the digital marketing career, from the simple perspective that Lending Club is now partially Google-backed. Become a Lending Club investor and you have one more lunch/dinner conversation topic for your Google meetings as well. I’m a big fan of finding common topics of interest in networking and building one’s career. Lending Club is a great topic!
  • Did you know that one of my old bosses is on the management team Lending Club? As someone who was a really super boss (and someone who gets digital marketing), I put a lot of faith in the Lending Club platform for this reason. Lending Club has a solid management team. It’s all about the people, and I like to invest in great people and great management teams.
  • Lending Club offers financial flexibility via massive cashflow, more than most other investments I have experienced. Do you live in the SF Bay Area or another expensive area? Chances are “yes” if you work in enterprise-level customer acquisition. As someone who knows first-hand how expensive it is to live around here, I like investments that offer flexibility. Lending Club is just that. On a regular basis, you receive cash flow from Lending Club, both principal and interest. It’s up to you whether you want to reinvest that money or withdraw. If it’s a time where you need some extra cash, you can just withdraw the principal and interest as it’s paid out. The coolest part: You don’t have to sell any loans to access the cash flow. There have been times when I have needed some extra money and I have withdrawn from my cash flow. There are other times (like recently) where I have reinvested. For this reason, I view LendingClub as a very flexible vehicle.
  • There are not a lot of investment opportunities right now that offer superior levels of return. In the Bay Area, real estate prices are sky high. The stock market is at all time highs (although there are pockets of opportunity for savvy investors). By disintermediating the middle man, Lending Club has carved out a niche where you can still receive some great returns on your invested capital.
  • It’s really fun. I like to mine through data, as a data-driven digital marketer. Lending Club offers a ton of data and opportunity to get as detail-oriented as you want when choosing your strategy.
  • I like helping others! Each time I invest $25 in a Lending Club loan, I can sleep at night that I’m helping someone out. Lending Club offers great interest rates to borrowers and helps people in their time of need: Credit card debt consolidation, financing work on their home, funding medical expenses, and so many other scenarios. I feel like I’m investing in people. On the flip side, I feel like the borrowers know that and do their best to pay back the loans since their fellow peer is helping them out. Great returns come to those that help others.

As always, it makes sense to be financially prudent, and only invest what you can afford to lose. Why not start small and then add a little bit over time? I personally take advantage of recurring auto-deposits to my Lending Club account so I’m able to invest in a few new loans at a time, on a recurring basis. This spreads my risk (in case a group of bad loans are clumped together) and also since I’m only risking a little bit of money at a time.

Interested in trying it out? If you don’t already have an account, here’s my affiliate link: Sign Up For Lending Club Today (affiliate link). I will receive a commission if you sign up via my link and would be grateful because it helps support the costs of running PPC Ian. That said, no worries either way, and I thank you for reading!

Important Disclaimer: I’m not a financial advisor and this is not financial advice. This post is just for entertainment purposes. Please consult your own financial advisor before making any investment decisions.
Image in this post © PPCIan.com

How To Pick Lending Club Loans

Jul. 03

It’s one of my 2012 Goals to save money and invest wisely. Where have I been investing my savings? Several places including stocks, my savings account, and the topic of today’s post – Lending Club (affiliate link). I’ve already written two exciting posts about Lending Club that you may wish to check out:

Today, I’m thrilled to share greater context behind my overall Lending Club strategy, how I personally pick Lending Club loans. If you find this article helpful and are interested in signing up for Lending Club (affiliate link), I would truly appreciate if you signed up via my affiliate link. Your support helps pay the bills here at PPC Ian and is very much appreciated. Without further ado, here’s how I pick Lending Club loans worthy of investment.

  • Rule 1: Don’t let Lending Club pick loans for you. Rather, click the little link to “browse notes” so you have full control over the precise notes in which you invest. How do I sort through the notes? Check out the next few bullet points!
  • Rule 2: Invest in notes that don’t have many days left in their funding cycle. The more days you have your cash sitting around, the less interest you will earn. Also, loans closer to becoming fully funded are typically of higher quality (in my opinion). Why? Partially funded loans can always be reviewed by Lending Club staff and get rejected. If they’re closer to being fully funded, it’s likely they’ve been reviewed and are good loans. Moreover, you’re taking advantage of the collective intelligence of other investors. Go to the popular loans.
  • Rule 3: Invest in low dollar amount loans. It’s a lot easier to pay back a $3,000 loan versus a $30,000 one. Generally, I feel like those taking out smaller loans have a more targeted, specific need for the money. They are more likely legit people. I get a bit concerned when folks are taking out major loans. As such, I’m sticking with small loans these days.
  • Rule 4: Go with “A” and “B” loans. I’m a conservative investor and want to minimize loan defaults. I feel that it’s essential to stick with the top-rated loans to achieve this goal.
  • Rule 5: Stick with debt refinance loans. It’s a simple equation: You take a high interest rate and consolidate your debt into a lower interest rate with Lending Club (bypassing the middle man). As compared to loans for other purposes, I just feel safer going with debt refinance loans since they’re all about saving someone money and reducing their monthly expenses (as compared to increasing their expenses, the case with other loans).

These tips are definitely not the only criteria for evaluating Lending Club loans, but definitely should provide a great starting point. My strategy is constantly evolving and these rules mark some of my latest thinking. Do you invest in Lending Club? Any special strategies for investing in Lending Club notes?

Lending Club Strategy

Important Note: I’m not a financial advisor and this is not financial advice. Please consult your own financial advisor before making any investment decisions.
Image in this post © PPCIan.com

My Lending Club Investment Strategy

Apr. 23

If you’re in the world of online marketing (or any other career for that matter), it’s important to have both a short and long-term plan when it comes to your finances. This year, I set the goal to save money and invest wisely (you can check out my 2012 goals here). Each and every day, I try to remind myself to save as much money as possible.

In that spirit, I have been embracing some new investment vehicles, one of which is Lending Club (affiliate link). What is Lending Club? It’s a peer-to-peer lending platform that allows normal people like you and me to lend money to others. Those who need to borrow money (often for such purposes as consolidating debt) get a much lower interest rate than credit card companies. Those who lend the money, get a much higher interest rate than is available anywhere else. In short: Both lenders and borrowers win!

I started investing on Lending Club in October of 2011, wrote my first post on PPC Ian about Lending Club in late February (check it out here), and am now ready for another exciting update! As you can see in the screenshot below, my current net annualized return is 12.99%. I’m excited about that because it’s only down a little from 13.04% in late February. Since I’m newer to Lending Club, I expect my net annualized return to dip over time since some of my loans will default. In addition to my consistent high returns, I’m now invested in 173 loans (2 of which are in funding).

I wanted to briefly highlight my Lending Club strategy today because I feel that it will be core to my continued success with this peer-to-peer investment platform. The best way to illustrate my strategy is through numbers. My total Lending Club account value is $4,137.27. Of that amount, $4,048.66 is invested in 173 loans. If you divide $4,048.66 by 173 loans, I’ve got an average of $23.40 in each loan. However, if you’re new to Lending Club, you may know that the minimum you can invest is $25. That is absolutely true. However, the real magic here is that your loans get paid off each and every month. If you start small, consistently add more money, regularly reinvest your profits, and grow your portfolio over time, you will get into a sweet situation where you have less than $25 in each loan, on average.

It’s really as simple as that. You don’t want to drop down a large amount of money all at once. You want to invest slowly over time, also known as dollar cost averaging. As your loans get paid off, you want to invest the proceeds is more loans. Eventually, you will have diversified into many different notes, with different start dates, and will have less than $25 in each loan. It’s all about persistence, diversification, and longevity. It’s not rocket science, but it definitely works (based on my experience so far).

So, there you have it, my Lending Club investment strategy. If you are thinking of investing in Lending Club (affiliate link) and enjoy reading PPC Ian, I would truly appreciate it if you signed up via my affiliate link. Thanks so much and best of luck in your own investing! I’m looking forward to my next update.

Lending Club PPC Ian

Important Note: I’m not a financial advisor and this is not financial advice. Please consult your own financial advisor before making any investment decisions.
Image in this post © PPCIan.com

Where I’m Investing In 2012, Lending Club

Feb. 26

If you’ve been reading PPC Ian for a while, you know saving money and investing wisely is my number one goal for 2012. When it comes to investing, I’m a huge fan of dividends and also interest income. Today, I’d like to highlight one of my favorite places to invest: Lending Club (affiliate link).

My Personal Lending Club Account

Lending Club Account

Check out the screenshot to the right, that’s my personal Lending Club account. I started investing in August, 2011. Since then, I have been contributing money on a regular basis. All my investments have added up and I currently have $3,369.15 in my account. My net annualized return is 13.06%. That’s right. The same money in my savings account (or even high yield savings account) would be yielding less than 1%. Lending Club is bringing in a huge 13.06% return, sweet!

What Is Lending Club?

So what is Lending Club? It’s a really cool platform that facilitates peer to peer lending. Lending Club finds people who need to borrow money. A good amount of the borrowers need to borrow to consolidate credit card debt at a lower interest rate. They screen the individuals, assess their risk bucket, and then allow them to borrow money from Lending Club investors (like me). Bypassing the middleman (banks), Lending Club makes the borrowing/lending process much more efficient. Lending Club means better interest rates for borrowers and better interest rates for investors. Finally, investors like myself get to taste the good life like the big banks who have been making so much money all these years.

Diversify Across Many Lending Club Notes

Here’s my personal strategy: Lending Club lets you invest as little as $25 in each note. Therefore, I invest in as many notes as possible to spread my risk around. If any one note doesn’t work out, I don’t sweat it at all. I’m currently invested in 143 notes, with two more in funding. So far, four of my notes are fully paid and one is late by 16-30 days. I’m well diversified!

My Special Tip: Diversify By Time

In addition to diversifying across many notes, I also like to spread my risk by time. This is a unique strategy that I haven’t seen anywhere else when it comes to Lending Club. I’m talking about investing incremental amounts of money over time. I try to invest a few hundred dollars here and there. Since August, my investments have added up to a large amount, but it wasn’t always that way. By investing incremental amounts over time, I have hedged my risk even more in case loan default rates are linked to any one range of dates. If you sign up for Lending Club, I recommend this very strategy. Start small (maybe as little as $25) and add more and more money over time!

Start Now: It Only Takes $25 To Open An Account

At the end of the day, Lending Club is fundamental in my goal of saving and investing wisely. Also, it’s helping me give back to others (another one of my top goals this year). I’m lending money to people like you and me who need help. If you’re interested in earning a high interest rate, I highly recommend checking out Lending Club (affiliate link). It only takes $25 to start and invest in your first loan! If you sign up, I sincerely hope you consider clicking my affiliate link. This would truly mean a lot to me and help me pay the bills here at PPC Ian. I believe in Lending Club and am a proud affiliate who invests a growing amount of his own money at Lending Club.

Important Note: I’m not a financial advisor and this is not financial advice. Please consult your own financial advisor before making any investment decisions.
Image in this post © PPCIan.com