I have been a member of the Lending Club for 3 years now. The Lending Club has been my saving grace and I think that’s because I have always been more cautious in my lending choices.
To make a long story short, I have been making a decent amount of money as an Lending Club member since 2006. I have always liked the idea of lending money to friends and family, but I just didn’t think I had the skillset to make good decisions with it. It took me a while to understand the difference between borrowing money from a friend versus buying something for myself. I am happy to see that I am finally starting to get to that point.
To be successful as an Lending Club member, you have to be able to make good decisions, and I am happy to see that I have a good understanding of this. Before I started making decent money as an Lending Club member, I would make bad loans simply because I didnt have the skillset to do it. It was important to me that I could trust my friends and loved ones with my money, but I just thought they could use it for their own agendas.
This is another thing I see a lot of people struggle with, where they can’t understand why they shouldn’t make the same mistakes they used to make. I get this a lot from the Lending Club members, but I’m also seeing it from friends of mine. I have a friend that would buy a new car simply because its only a few hundred dollars more, but when I ask him to show me the receipt, he refuses.
The point I was making is that the vast majority of people do not care about how much money they take out of the pool, or if they are being completely honest with themselves. If someone is lying to me, I don’t care. So if I tell my friend things like, “I want you to use that $1,000 or $2,000 or whatever to invest in a new home,” I am telling him that I care about myself first.
If this is about whether or not you should care about yourself, then yes, it is important to note that people can lie to other people. When I was in China, my friend asked me to buy him a new car because he would be traveling to Korea and he needed a new car. I was surprised at the price, but he was a good sport about it.
We do care about ourselves, and our own investments. We’re just a little more cautious about it. For example, at our recent investment meeting, a member of the group asked us what he should do to increase his ROI on his investments. I told him that he should buy a new car, but I was concerned that it wouldn’t get him far. I asked him what he would do if he didn’t have money to buy a new car.
I am sure we all have our individual “rules” about buying a new car. I’m sure that some of you probably have the “rule” that you can only have a new car if you have zero debt. Others probably have the “rule” that you should just buy a car from the local dealer.
This is the part where my face turns a bright shade of red. This can be a problem. The reason we talk about ROI in our research is because it is a great way to know how much you can afford to spend on a car.
ROI is simply the cost of driving from point A to B divided by the net revenue you might get from driving from point A to B. The net revenue is the amount of things you make the car for. For example, if I want a new car, I can save a lot of money and drive from A to B for a while. But I don’t need to pay for the gas in the meantime.
