word!

By now you should know I like delving into interesting financial concepts, especially those online. Having a community based lending option has been intriguing as Prosper has shown.

Well Zopa has finally come into it’s own in the U.S. An import of the U.K. that has now also expanded into Italy and Japan. They were almost 2 years late in the coming to America. Oh, well, at least they made it and could give Prosper a run for it’s (lending) money.

Zopa is a somewhat different beast, but interesting none the least. It also lends out $ but these loans are based at local credit unions. They are associated with Affinity Plus, a credit union from the Cities that I had been acquainted with from my schooling at MSU, Mankato. But the loans are cool. If you get someone else to invest in a CD with Zopa, they can actually help you out. For every CD you purchase through Zopa (CDs are FDIC insured through the credit unions) you help someone out by reducing the rate they pay for their loan thru Zopa. Yes, you can even get your rate down to 0% (i.e. no loan payment) if you get enough help from other Zopa members. That is very cool.

Every CD you purchase is much like a CD at a local bank/credit union. Their current rates continually beat the pants off of local CD rates. These CDs are currently only for 1 yr terms, pretty common for most CD holders out there. With the purchase of a CD you get to apply what ever percent of your return on your money you want to your friend/family member through the site. Say the site offers 3.75% on your money, if you were real generous you could knock down your rate to say 3%, thus giving 0.75% as help to the person of your choosing or even stay at 3.75% and still help someone out a bit more minimally. You get a great rate on a CD and your money goes to help an actual person with their loan rate. Pretty cool.

So ready to help a man out. Check out the link to the left if you are so far interested. Otherwise, contact me and I’ll answer any questions you may have. Wouldn’t it be nice of you to help me pay less on the loan I’m taking out to help with wedding finances? I intend to pay this loan back shortly after festivities, it’s more of a cushion for me.

Thanks!

I love watching that crazy lady Suze Orman on PBS from time to time. She rants and raves at us like she’s rich… oh wait she is. But once in a while she throws us a golden bone. This particular book run of hers, she’s getting women (but men too) to start thinking for retirement.

With the SAVEYOURSELF one can start a retirement account with as little as $50/month for 1 year and get $100 bonus on the 13th month. Sounds like a lot better interest to me than the ol’ rich banker will give you up town. I’m in……

Oh, use code 701

Well, well. I’ve finally made it in life.

Having been keen on the blogging scene and having more than a passing interest in personal finance, I’ve been an avid reader of the back page of the Business Section in the daily Startribune. There is a younger reporter that actually writes about young adults and their finances, so this is always a very interesting section to peruse. Being the hip, young reporter she is, she has set up a Blog (Ka-Blog!) to go along with her articles.

So lo and behold, when she asked for opinions about tax refunds for this past filing season, I emailed her to tell her that I didn’t think giving the government a 1 year interest free loan was all that awesome. My little conversation was reduced to this blurb:

In the past, Michael Piotter, 26 of Gaylord, Minn., put refunds into Roth IRAs, but the microbiology technician does not look forward to getting money back. He’d rather owe a little than receive a refund, although he prefers that his tax bill be as close to zero as possible.

The rest can be read online at the StarTribune.

Not all that exciting of paragraph, but it seems like I’m one of few people that doesn’t trully appreciate a huge refund. But then again, wouldn’t you think that getting 15,000 back a year is a tad excessive as the lead individual gave out for his situation? And the guy helps others out at tax time? OUCH!

I can see the points if people don’t have money to pay their respective tax bills each spring, but they should feel guilty for consistantly recieving huge refunds. They must be the most loyal Americans, wiling to loan the US government their money for a year at a time. Not me.

Update: Scanned pages of said article:

Main Page

Inner Page

Having enjoyed the many ventures I’ve set out on with online banking, I’ve always been interested in the next new direction internet based banking has been going.

It seems that now personal, bankless loans are starting to become all the rage. After hearing about Zopa, a leading British-only online lending site, I heard that someone else has begun business here in the U.S. under the guise of Prosper.

Basically, both sites get people together that want to borrow money and those willing to lend it to them. Sounds easy enough. Pretty much just like borrowing someone a buck for a pop or candy, although a tad bigger scale. It might be of note that you don’t personally know these people, unlike your local bankers might. The only problem seems to be when those borrowing default partially or totatlly on the loan. Seems that Zopa counters this by spreading lenders money between numerous accounts and verification by a ‘risk managers’.
With Prosper one could borrow directly to a sole person or spread the ‘risk’ among numerous people. Also poor reports to the credit agencies and debt collectors will enter the fray upon defaults of loans. Both sites don’t guarantee your won’t lose money, but banks work the same way I guess.

And if you are borrowing money and aren’t happy with the rates the banks are forcing you to swallow, this may be a suitable backup plan.

Seems like an interesting field on finance to be invovled in, as well as keeping an eye on. It seems Zopa itself is entering the US market in late 2006 which should keep Prosper and others like it on their collective toes.

Not that I’m a big Paypal user, but I found an alarming problem in their structure that could make for some unpleasantries. About this time last year, I signed up for a hosting plan for a small website. It cost a few bucks, which was okay, but little did I know that it would be considered a reoccurring annual transaction or subscription.

So while reconciling my checking account, I notice an odd amount deducted that I can’t verify other than coming from Paypal. Seems that hosting company charged me this year too, again not a large amount, but they did charge me without my implicit approval.

Problem is that Paypal insists on using a checking account to link to. This causes problems if said checking account balance is less than charge which you are unaware that is going to be made to that account. Seems to me that a subscription should warn you a few days/weeks in advance the pending charge and then you can accept or deny it.

Otherwise, one could overdraft on an account for this silly reason and I’m sure given the trouble numerous people have reaching Paypal support, it would fall on deaf ears.