Archives for July 2008

WaMu Savings 3.75% APY: Should I Stay With A Struggling Bank?

While logging on to my WaMu account I noticed (as did reader Alvin) that the WaMu savings account* is now paying 3.75% APY as of 7/31. Some pages still say 3.30%, but my account details confirm the 3.75% APY. (Login and click on “About this account”.) Or, click here and hit Apply Today, and you should see this:

Of course, if you read the news, you’ll know that Washington Mutual stock is being battered right now. Is this move a sign of desperation? If so, is this rate increase good news or bad news?

It’s All About The FDIC Limits
Well, if you have money over the FDIC insurance limits of $100,000 per titled account, I strongly suggest you stop reading right now and spread it out immediately. Your money is at risk. Here are some good options.

If you are under the limits, then your money is safe. The main things left to worry about are (1) easy access to money, (2) crediting of current interest earned, and (3) future interest rates. But hey, we already have two examples of struggling banks that give us an idea of what we might be in store for.

IndyMac Bank CD Example (FDIC takeover)
I believe that IndyMac failed on a Friday, and branches were closed that day. Over the weekend, branches were closed and the website was down. ATMs and debit cards still worked. By Monday, all the branches were open and the website was back up. Direct deposits, electronic transfers, and written checks went through uninterrupted.

All interest earned in accounts (under the limits) was still credited. Before the failure, IndyMac Bank also had some high interest rates on certificates of deposit (CDs). Upon takeover by the FDIC, an ideal scenario actually happened. For one, you had the option to withdraw your money from a CD with no early withdrawal penalty. Or, if you liked the rate, your CDs could continue to earn the same interest until maturity. This is an even better deal than if IndyMac stayed intact.

Countrywide Example (Bought by Bank of America)
Another struggling bank, this time merged with another existing bank. Currently they are still separate websites, with their own interest rates and products. Nothing really changed from the customer’s point of view. There was no downtime, or lost liquidity. You use the same checks, same debit cards, same website. CD rates and other terms remained the same. A slight bonus was that Countrywide customers could now withdraw money from Bank of America ATMs with no fees. [Merger Info]

So, Will WaMu Fail?
I have no clue. My PTI-style Toss-Up Percentage: 25% Fail, 75% No Fail. But even if it does, given it’s size, I can’t see it disappearing overnight like a small local bank might. It would have to be taken over by another (probably large) bank. In addition, there are so many moving parts that it will probably keeping run as-is for several months even if it does get taken over.

Taking all this into account, I will be sticking with Washington Mutual and happily take the increased interest rate.

* Reminder: This 3.75% rate is only available if you apply online and open a Free Checking account at the same time. If you go into a physical branch, they will deny deny deny! However, after opening you can use it at a branch just like any other savings account. More details.

A Modest Proposal For Hopeful Stock and Fund Pickers

I believe in holding a diversified, low-cost, passive investment portfolio. However, at the same time there is so much financial hype out there that I understand the natural tendency of people (especially intelligent, hard-working, competitive people) to actively manage their investments. They may think they can pick the best growth stocks like AAPL or GOOG, they may be Buffett disciples and search for durable competitive advantages, or they may be stable dividend seekers. Or maybe they just want to pick the best fund managers instead.

But what if you suck at it? By investing in low-cost index funds, you are essentially guaranteeing yourself to be somewhat above average every year. Wander off-course, and you could do great, or more likely you could crash and burn.

Many people decide mitigate this risk by doing some form of Core and Explore investing, where you keep most of your money in passive funds and gamble a bit with the rest. Since I do this myself to a (very) small degree, I’ve been toying with an idea that takes this one step further.

1. Start Out Small
Let’s say you are young and aggressive, and want your portfolio 100% stocks. Let’s say you carve out 5% of that, throw it into a cheap discount broker, and start trying some ideas out.

2. Track Your Performance Honestly

Thinking you’re doing well at stock-picking without knowing your relative performance is like running around the track alone with no stopwatch and saying “Gee, I’m fast!”. To gauge your self properly, you need to:

  1. Keep track of all investment inflows and outflows. This means keeping track of all your contributions, buys, sells, and fees/commissions paid.
  2. Account for uninvested cash. If you would have put $1,000 into an index fund, but instead bought $500 of GE, that means you also have $500 of idle cash earning 0-4%.
  3. Calculate your return properly, taking into account the information from the previous two steps. Here are two ways, one provides an estimate while the other gives more accurate numbers.
  4. Pick the appropriate passive benchmark portfolio. For example, the S&P 500 only works if you are investing in large, US-based companies.

3. Adjust Based On Your Relative Performance
You should run a comparison with your benchmark regularly. Each year that you beat your benchmark, you can increase the percentage of your portfolio which you actively manage. If you lag behind the benchmark, you must decrease the percentage of your portfolio which you actively manage. A really crude rule might be simply to increase or decrease the active amount by 2% each year based on performance.

If you are truly horrible, you’ll be out of stock-picking completely in a few years. For most people, you’ll probably be out of it within a decade or so, having learned a valuable lesson. If you are the proper mix of skillful and lucky, then soon you’ll be controlling the entire portfolio.

Sound reasonable?

Marriage & Money Quiz by Money Magazine: Did We Pass?

weddingMoney magazine has an article this month about how many married folks don’t know the details about their spouse’s finances. In one study, half of the pairs questioned came up with completely different answers when asked to estimate their family’s income and net worth. Are you and your partner similar? A quiz was included that is designed for each partner to take separately. Here are the quiz questions, as well as the answers that my wife and I gave.

How much money did your spouse make last year, including salary, bonuses, commissions, and freelance pay?

Me: I did the taxes, so I got this one correct.

Her: She was about 20% below my actual gross income last year. She reads this blog, so she know the after-tax and after-spending results, but I guess she underestimated how much in taxes we get hit with. Also, I have variable side-income which is not easy to track.

What’s the last big purchase (more than $100) your spouse made, and how much did it cost?

This is a tricky question. Is this a purchase meant solely for ourselves? Although it’s not like we never spend money, we both had a hard time remembering the last time we bought a $100+ item for ourselves, like a purse or a gadget.

Me: I remembered that she bought a plane ticket for work-related opportunity for $300 yesterday.

Her: She noted that I gave a $100 gift for a friend’s wedding (from the both of us) last week.

How much does your spouse owe, counting credit card balances, car loans and another other debt, aside from your mortgage?

Me: Nothing (correct).

Her: Nothing (effectively correct, if you ignore making money with 0% balance transfers).

What is the current value of your spouse’s 401(k) or other principal retirement account?

Me: About $15,000. This is actually incorrect – it is more like $25,000. I forgot that she had been working at this job for two years already. Oops! This is kind of sad, considering I actually check and record the balance every month in a spreadsheet for our net worth updates.

Her: $15,000. My Solo 401k is actually around $23,000. She admits that this was a wild guess.

If your spouse passes away, how much will you collect in life insurance (counting both workplace and individual policies)?

Me & Her:: We both currently have ~$300,000 each in mostly-subsidized life insurance through work. We have been discussing life insurance in general recently and were looking into getting individual term life insurance policies, although we’ve been “looking” for months now. ๐Ÿ™

Overall self-grade as a couple: B. We weren’t completely clueless, but there is a lot of room for improvement. I think there is a good chance that a lot of people who read this blog have significant others who are not quite as interested in finances as they are. So why not give them this quiz and see how they do? It definitely helped us get closer to being on the same page.

Update: Best Savings Account and CD Interest Rates, 4%+ APY

It seems that one small silver lining of these ongoing bank troubles is that well, banks need more money in order to keep afloat. This means they are more willing to pay us more $$$ for the privilege of holding onto ours. ๐Ÿ™‚ Even the big banks are starting to play along. Thanks to Brian and John for their respective updates.

Big Banks
If you have a decent balance and are willing to lock up your month for a while, below are some nice rates with terms of a year or less. Interest rates might be going back up soon to combat inflation, so locking in a CD longer than that might not be the best idea.

  • Bank of America has a 7-month CD paying 4.11% APY. $5,000 minimum.
  • Washington Mutual has a 8-month CD paying 4.25% APY. $1,000 minimum. They still offer their no-minimum liquid savings account at 3.30% APY.
  • Wachovia has a 12-month CD paying 4.25% APY, as well as a 7-month CD paying 4% APY. $5,000 minimum.

Online Banks
The online bank arena remains the place to be if you want high yields and minimal restrictions, including the ability to withdraw money at any time. All are still FDIC insured.

  • HSBC Direct is offering 3.50% APY with no fees and no minimum balance requirements, guaranteed until 9/15.
  • FNBO Direct is offering 0.85% APY with no fees and no minimum balance requirements, and has maintained a decent track record of consistently high rates.
  • Everbank also has a savings account that offers a nice 4.65% APY for the first 3 months, and then 3.51% APY afterwards. Not bad, considering even the non-special rate is very competitive. I guess that is why they call it the Yield Pledge Money Market account, since it “pledges” to stay amongst the top 5% of competitive banks. There is a minimum balance requirement of $1,500 to avoid fees.

Free Access to Entertainment Book Online Coupons

I’m usually not a big fan of paying for coupon books since I always forget to use them, but here is a way to get free access to Entertainment Book Online. Just visit this page, and enter the Access Code OPADINE08 (looks expired), or try OPADINE. You don’t need to provide a name or credit card number. Via SD.

After joining, you are allowed to print coupons for 10 “Premium Discounts” per month, which is often something like Buy-1-Entree-Get-1-Free or 20% off your bill at participating restaurants. I never seem to like any of these restaurants, but it’s worth a quick search by zip code. They seem to restrict the easy searches to Dining, but you can go to their regular page and find all their offers. Then go back and run a text search.

One option is to run a search for “blockbuster”, where you can print out a coupon for a free 12-month membership to the Blockbuster Rewards program. Retail value is ~$10, and includes one free Non-New Release Movie rental coupon each month.

Added: You can get another 3 Premium Discounts per month at this page. You’ll need to sign up as a new member again, but it is easier to search through non-Dining offers on this page for some reason.

$10 Off at Amazon.com + Free Amazon Prime Trial

Free Trial Screencap

Right now you can get $10 off your next Amazon.com order when you sign up for a free 1-month trial of Amazon Prime. Amazon Prime gives you free 2-day shipping on any purchase with no minimum order, so you don’t even need to get to $25 for the usual Super Saver Shipping. For example, you could order something priced at $12 for only $2 with free 2-day shipping. Via SD.

Promotional offer valid until July 28, 2008. Customer must sign up for a new Amazon Prime Free Trial by July 28th, 2008 and redeem promotional credit before August 28, 2008.

This offer is for accounts who have never signed up for Amazon Prime, trial or not. So if you are already logged in under another account on your computer, you may not see this offer. You will need to logout and either login into a different valid account or open up a new account. The cool part about Amazon Prime trials is that you can set it not to auto-renew ahead of time, so you don’t have to remember to cancel. Here’s how:

  1. Click on Your Account.
  2. If you’re not there yet, scroll down and click on Subscriptions Management > Manage Your Amazon Prime Membership.
  3. Look for green text. Click on the Do Not Upgrade button and you won’t automatically be charged $79 anymore. You’ll still get the entire 1st month of free Amazon Prime shipping.

Better Example Against Double-Taxation Of 401(k) Loans

Okay, so I view my last post on 401k loans as a failure. I tried to use as little math as possible in explaining why 401k loans are not a bad idea due to the incorrect concept of “double taxation”. Instead, I probably managed to confuse many of you all further. I have tried to come up with a better example with the math thrown back in, and think I have found one. Please give me another chance! ๐Ÿ™‚

The Method

If double-taxation really occurs in 401k loans, that would mean that taking out such a loan somehow negates the inherent tax-advantages of the 401(k) plan. Certainly, taking a loan and paying it back would be worse than just leaving the 401(k) completely alone, right? I am going to walk slowly through three scenarios that will show that this is simply not true. The three hypothetical scenarios:

  1. Elton contributes $10,000 to a 401(k) and does nothing. He does not take any loans of any type. He waits a year and pays for his $10,000 wedding in cash.
  2. Elton contributes $10,000 to a 401(k). He then takes out a 401(k) loan of $10,000 to pay for his wedding, and then repays the $10,000 a year later using after-tax money earned from his job.
  3. Elton contributes $10,000 to a 401(k). He then takes out a credit card loan of $10,000 to pay for his wedding, and then repays the $10,000 a year later using after-tax money earned from his job.

Very Simple Assumptions

Annual gross salary is $20,000. Income tax is 25% of gross income. There is no interest charged on any loans, as I’m just trying to isolate the issue of double-taxation. There is no growth in the funds, either. He doesn’t need to eat or sleep, so no other expenses. ๐Ÿ˜‰ (And yes, 401(k) loans are usually capped at 50% of total balances.)

The Results

Scenario #1: No Loans

  1. In Year 1, Elton makes a total of $20k gross. He contributes $10k pre-tax to his 401k, and pays taxes on the remaining $10k.
  2. In Year 2, he again makes $20k gross and does not make any additional 401k contributions.
  3. He spends $10k on his wedding. The 401k stays at $10,000 the whole time.

Scenario #2: 401k Loan

  1. In Year 1, Elton makes a total of $20k gross. He contributes $10k pre-tax to his 401k, and pays taxes on the remaining $10k.
  2. He then takes a $10k 401k loan out, and puts the $10k in his bank.
  3. He spends $10k on his wedding, and his bank balance goes down accordingly.
  4. In Year 2, he again makes $20k gross and does not make any additional 401k contributions.
  5. Finally, he pays back the borrowed $10,000 back into his 401k using the money he earned in Year 2.

Scenario #3: Credit Card Loan

  1. In Year 1, Elton makes a total of $20k gross. He contributes $10k pre-tax to his 401k, and pays taxes on the remaining $10k.
  2. He then borrows $10k via his credit card.
  3. He spends $10k on his wedding.
  4. In Year 2, he again makes $20k gross and does not make any additional 401k contributions.
  5. Finally, he pays back the borrowed $10,000 back into his credit card using the money he earned in Year 2. The 401k stays at $10,000 the whole time.

Recap
In all three scenarios, the amount of taxes paid is the same, and the final result is the same. Total taxable income over two years is $30k in all 3 cases. Final taxes paid: 25% of $30k, or $7,500. You end up with a 401k with $10,000 of pre-tax money in all 3 cases. No additional taxes are paid by taking out a 401(k) loan.

It does not matter even if he spends the $10,000 borrowed and pays it back later with after-tax money! Thus, I still conclude that there is no “double-taxation” on 401k loan principal.

Double Taxation and the Real Reasons 401(k) Loans Are Bad

I have noticed an increasing amount of discussion regarding 401(k) loans. While almost all sources denounce this as a bad idea, I take issue with one of the supposed reasons why: double taxation. Suze Orman explains it her way:

Suze says when you put money in a 401(k), it goes in with pre-tax dollarsโ€”you add from your wages before the government takes any income tax out. When you take a loan out of your 401(k), you’ll usually have to pay it back in five yearsโ€”with other money that has been taxed. Then, when you get older and you take money out of your 401(k) plan again, you’ll pay taxes again. “You have just volunteered for double taxation. Why would you want to do that?” Suze says. “Do not ever take a loan from a 401(k) plan.”

So does MSN Money:

Whether you repay the 401(k) loan out of your salary or from a bank account, those payments are all made back into the 401(k) with after-tax dollars. So, let’s say your monthly interest payment is $300 and you’re in the 28% tax bracket. You’ll have to make $416 in gross earnings to make the $300 payment. Then, when you retire and take withdrawals, you pay taxes yet again.

I see this double-taxation argument over and over… These quotes seem to suggest that you’ll lose something like 25% of your principal (or whatever your tax rate is) if you dare take out a 401(k) loan. Why are such trusted sources still spreading this misleading information?

Let’s say you want to borrow $10,000 from your 401(k) plan for a year. Your plan charges an interest rate of Prime + 1% = 6%, which you must pay back to yourself. That $10,000 was a pre-tax contribution, so you never paid income taxes on it. You take it all out, leaving yourself with $10,000 in cash. You haven’t paid any taxes on that $10,000. You leave it under your mattress, and a year later pay back the same $10,000 plus $600 in interest. Still haven’t paid taxes on the $10,000. When you eventually withdraw the money, then finally must you pay taxes. So what was the only thing taxed twice? The part attributable to the $600. Not the $10,000.

Question: Does it matter if it turns out someone took your original 10,000 and then replaced it without you knowing? The answer is no. As long as you pay back the $10,000, that is all that matters.

The only part that is taxed twice is the interest. And since you are paying yourself the interest, this small double-tax is really the only cost of doing this loan. Using the example above and assuming a 25% marginal tax bracket, that means you only got taxed an extra $150 on that $10,000 loan. This is the same as getting a regular loan with a 1.5% interest rate. Dealing purely with the effective interest rate paid and assuming you pay back the loan in a timely manner, a 401(k) loan is actually quite a good deal.

This leaves you with the real reasons not to take a 401(k) loan:

  1. If you lose your job, you will have to repay the loan within 60 days or it will be considered an unqualified withdrawal. This means you lose any future tax advantages on that amount, and you will be subject to income tax plus a 10% penalty on the amount. This would boost your effective interest rate dramatically.
  2. 401(k) funds are protected from creditors, even in the event of bankruptcy. If you borrowed money on a credit card and don’t pay it back, your credit score will tank but nobody will take money out of your hands. Just like how home equity loans can be dangerous because you are risking your home, unsecured debt is always better than secured debt. If something is so bad that you need to sacrifice your retirement savings, then bankruptcy may not be that far-fetched. Is this a one-time need, or are you just putting off the inevitable?
  3. Some 401k loans do not allow new contributions if you have loan outstanding. So you could be losing out on some 401k matching contributions. This loss would also drive up the effective cost of a 401k loan.

Summary
401(k) loans can indeed offer you a very low effective interest rate given optimum conditions. However, there are important potential catches, enough that I would still personally take out an unsecured loan first if at all possible. Before taking on any debt, you should carefully examine your reasons for doing so. I think that only those with really bad credit (unable to get loan otherwise) and a short-term need with a quick payback schedule should take out a 401(k) loan.

Update: A lot of people still think double-taxation still occurs. As opposed to editing this post, I went ahead an made up a better example against the theory of double-taxation. Please check it out before making up your mind.

Another Free Schick Quattro Razor Sample

To get your free Schick Quattro Razor, visit ShaveRyanNyquist.com, click to Enter the site, and vote on which facial hair design you want him to have. When they ask you if you want a free razor sample as well, click on “Sure Man”. If it tells you “Sorry, no more samples. Next time pedal faster”, try again later or with a different web browser. It appears to be a little hit and miss, but should come through eventually. Via FW.

First a razor giveaway involving a weird pillow fight video, now one where you get to influence an X-games athlete’s facial hair. Where do they get these ideas? I almost want to tell them to lay off the pot.

Entrepreneur Interview: Dan of SuperiorTitanium.com

A few months ago, Dan of SuperiorTitanium.com approached me about advertising rates for his website selling titanium money clips. Although money clips are somewhat financially related, I thought it would be an even better fit to do an interview with him in exchange for some publicity. (No money changed hands at all.)

I’m always interested in the what I call micro-businesses run by one or two people, especially those selling physical products. Mainly, this is because I’ve always been turned off by selling physical goods, and have preferred to make money by either selling advertising online or by performing services. Let’s get to the interview:

Where did you get the idea to sell titanium money clips? Why titanium?

I’m an mechanical engineer and I’ve always had an interest in all things mechanical. Titanium itself is a very interesting metal, especially; since it is never found in it’s pure form and is basically a black sand prior to processing. To me it is pretty amazing that we even have titanium as a metal now and it was truly a major feat of engineering to get the process for refining titanium figured out.

I used to carry a leather wallet around, but it was pretty bulky and uncomfortable to have in my pocket all the time. I decided to make a money clip out of titanium, since it is very springy and will not fatigue and break over time like steel will. Titanium also allows the money clip to hold more and still spring back to its original form allowing me to hold my bills and credit cards along with my drivers license! The money clip worked very well for me and my friends liked it and they bought some.

I decided to try and sell them online with a very basic website and using Paypal to accept payments. I tried some advertising with Google Adwords to get traffic to the site and happily people purchased the titanium money clips and there were repeat buyers who were buying them for their friends. This inspired me to keep selling them and to not only improve on the design, but to add in different variations to suit different tastes. Of course sales were very few at first, but I stuck it out and it has paid off in the long run.

Your site looks very professional. Did you design it yourself or hire somebody?

The current website is designed by a very capable website design company and represents A LOT of work over time by myself and the designers. It was very important to find a company who was very good to work and fast to respond to questions, etc.

Is this your first online business?

This is my first online business although it is the 4th website design. I have a lot of different ideas, but I’m trying to stay focused in order to really build the business and not get spread too thin.

How long have you been running this site? Do you have others?

This site has been running for about 5 years now and although I’ve had many other product ideas I’m sticking to this one for now. My other ideas would require new websites, so there will likely be more sites in the next year or two.

Is this your full-time job? How many hours a week does it take to maintain and run?

It’s not a full time job and is run on 10 to 15 hours per week (with help), although the more time spent promoting the website the better the sales are, so I usually spend more time than that.

Do you dropship or do you hold your own inventory?

We manufacture our own money clips and hold lots of inventory, since everything is now made in batches for efficiency. This allows us to tightly control quality, delivery and all aspects of the business. I believe this is key to a strong business and quality products.

Can you give a range into the gross annual income of your website? (Ex. $1,000-$10000 or $10k-$50k or $50-$200k)

(declined to answer)

What has been the most difficult challenge in your venture?

The biggest challenge has been making people aware of the existence of titanium money clips and the benefits over traditional money clips and wallets.

What advice would you give to someone who wants to start a business selling consumer products online?

Do something you love to do because it will take passion to make your business a success and it is true that it doesn’t really feel like work (well 90% of the time it doesn’t!). You will also need to accept that it will take a long time to make money especially if you have a new product that people are not aware of. The money will come, but you will need patience and determination.

Any other tips?

Listen to your customers, since they are the ones who are putting/keeping you in business. I always try to be fair and reasonable because every satisfied customer is like a sales person out there and over time it is a powerful force working in your favor.

— end of interview —

Recap
I want to thank Dan for the interview. Here are the main take-aways for me:

  1. Had an idea within personal sphere of expertise (mechanical engineering), and made a prototype.
  2. Tried selling to friends first, then expanded.
  3. Keeps trying to improve website.
  4. Make product himself, and controls inventory directly.
  5. Not a full time job.
  6. Most time is now spent on marketing, not product development.

Now that I write this, I have some additional follow-up questions like what shopping cart backend software he uses. If you have some questions as well, please leave them in the comments and I’ll try to get them answered if they aren’t trade secrets. I haven’t had a chance to try out the product myself yet, but be on the look out for an upcoming titanium money clip giveaway. ๐Ÿ™‚

If you liked this entrepreneur interview, also check out this interview with Dennis of OneGreekStore, a custom apparel store for the college Greek community. Finally, if you’re an entrepreneur with a unique story and would like to be interviewed here as well, please feel free to contact me.

Wanted: Loyal Reader With VirtualBank Account

I am currently out of VirtualBank referrals to give out to people. (Both referrer and referrer get $20 if you open an account.) As such, I am looking for a loyal and participating reader of My Money Blog to give out their referrals and make some easy money. If you have (1) made at least 3 comments here before today with the same working e-mail address (I will run a search), (2) have a VirtualBank account with available referrals, and (3) can make a promise to deliver referrals promptly, please contact me or leave a comment using the e-mail. I think I have enough for a while, thanks! I do not want anything in return. First come, first served. Thanks!

Links: Dark Knight Edition

Saw Batman today (the free movie tickets worked!). I’m not much of a graphic novel guy, but it turned out to be one of the best movies I’ve seen all year. Side thought: Is it really impressive that a movie broke a box-office revenue record when even a matinee costs $8 now? If the goal is to compare popularity, shouldn’t they just count the number of tickets sold instead? Here are some other personal finance articles from my weekend reading:

The Finance Buff has a guide on buying TIPS directly from the government at auction.

J of BudgetsAreSexy bought himself a frugal Cadillac. Oxymoron? This reminded me that I still want an old Jeep Wrangler. If I view the Jeep as one step closer to being a beach bum, does that mean J secretly wants to be a pimp in his DeVille? ๐Ÿ˜‰

Punny Money asks (using hilarious stick figures) if one should buy or rent a tuxedo. For a long time, a small part of my beach bum dream lifestyle was to die having never worn a tuxedo. I managed to avoid having to wear one at my wedding. Alas, I had to wear one last year while being a groomsman for a friend (all your fault, Joe!). But never shall I buy a tuxedo!

JLP of AllFinancialMatters shares his opinions on brown-bagging lunch as well, and his readers chime in.

As SUVs everywhere are being traded in, The Digerati Life explores the MPG illusion. Saving money on gas by switching cars may not as beneficial as you think.

Lazy Man offers to sell his endorsement at Prosper Lending, and starts a lively debate. Given the losses that many other lenders have been experiencing, I’m quite happy with the estimated 10% ROI on my tiny portfolio.

Boston Gal remarks that you know the economy is bad when the Wall Street Journal pushes libraries. From her commenter Sean of Financial Ramblings – “If CNBC starts running specials on clipping coupons, Colbert will have to raise the threat level.” Ha!