Do you ever remember depositing your gold coins in any of the Super Mario games? I sure don't. Sure, 100 coins would get you another life, but what if you wanted to save or spend those coins? Where would Mario keep his gold coins? Where should we keep our gold coins? Let's examine the options.

Where to keep our "coins"

1. Under the mattress: It's possible that Mario was a conservative gold coin investor, and wanted to keep his shiny coins close to his mushroom home. Not the smartest move financially, but hey, this guy jumps on turtles and willingly goes down dark drain pipes.

2. At the local Mushroom Kingdom Bank: If Mario was a little smarter, he might have deposited his loot into a savings account at his local bank. Here he can at least earn a few percentage points of interest on his coins.

3. At the virtual Mushroom Kingdom Bank: On a hot tip from Yoshi, Mario might have deposited his coins at those new online banks that have been sprouting up in the mushroom kingdom. Earning 5% on his coins, Mario thinks this sounds pretty good.

Where Mario Really Should Keep His Coins

4. Lending Club: When Mario heard that Luigi got a loan from Lending Club to purchase a new Kart, he took a closer look at social lending. Upon learning he could earn an even higher interest rate by lending his money responsibly to other Mushroom Kingdom residents through Lending Club he was so excited he nearly ran into a random cannonball!

Mario wouldn't keep his shiny coins earning nothing under his mattress or in a checking account. Diversify your cash investments and consider becoming a lender with Lending Club. Plus, you'll make the Princess's day when you show her the interest rates you could be earning!

It’s amazing how quickly your financial situation can change. One minute you’re sailing along smoothly, making good progress towards your goals, and the next you’re in a downward spiral with little chance for recovery. Many times, there’s a single event that triggers the change. Preparing for that event can significantly reduce its impact.

Typical triggering events can be an unexpected expense, an interruption of income, or simply unlucky timing of when a bill comes relative to your paycheck. All of these triggering events tend to be temporary setbacks. You would be fine if you could just buy a little time to get past them. The way that I suggest getting through these difficult times is to make them part of your plan.

When you are building your budget, include unexpected items as well. While it might be hard to anticipate the frequency or amounts of such occurrences, putting something in your budget is still a good idea. If you overestimate, then you’ll have extra money at the end of the year. If you underestimate, then you’ll still have to come up with the difference, but the impact will be less, since you already have some funds earmarked for this situation.

A general rule of thumb for handling unexpected expenses and temporary setbacks is to save three months’ worth of expenses in cash equivalents outside of your retirement assets. You then have plenty of money available to handle most situations. Once you reach the three-month goal, you can extend it to six months’ worth for even greater protection. In order to reach these goals, you will need to know what your monthly expenses are. This is another reason that having a budget is so important.

P2P loans from Lending Club are an affordable way to refinance credit card debt and finance large purchases, but they are great for handling unexpected expenses as well. While budgeting for unexpected items and building up expense reserves works too, if you need a little help before you’ve reached those goals, Lending Club may be the solution that you’re looking for.

Going beyond Facebook has sparked quite a lot of press and the interest of more users, most of whom are unfamiliar with P2P Lending. Along with the opening of our website, we have also received several requests to expose raw data and performance statistics about loans and lenders. We believe this is very important in order to maintain full transparency and allow users to see the benefits of Lending Club for themselves. While we work on ways of exposing this information in a private, secure and efficient manner, we have already taken some steps in this direction. Here are some datasets we have made available:

Top Lenders by Performance

The Lender Rankings page contains a list of the top 100 performing portfolios (one per lender) containing at least $50, in order of estimated return on investment. Lenders are identified by screen name to protect their privacy. The table displays the following information:

• Portfolio rank

• Lender screen name

• Portfolio name

• Amount of initial investment

• Estimated return on investment

Click to Enlarge Image

Calculation of estimated return on investment

The estimated return on investment is calculated by taking the average interest rate of a portfolio and deducting the Lending Club servicing fee, defaults and late loans expected to default.

• The average interest rate excludes the origination fee for each loan (origination fee varies according to each loan grade)

• The late loan amount is calculated by deducting monthly payments already made from the principal

• Loans more than 1 month late are estimated to default at a 50% clip

• Default losses (projected defaults for late loans and actual defaults) are calculated using a 90% clip (10% recovery rate) for default loans

• Paid/repurchased loans are included in the current average interest rate calculation. This may change in the future

• The late/default rates are projected out to one year

• Lending Club servicing fees are 1% for all loans

• All loans are included in the calculation for late/default rates in the formula regardless of age

Formula:

Estimated ROI = Average Interest Rate - (Loss due to Late Loans - Loss due to Default Loans) - Lending Club Servicing Fee

Where:

• Loss due to Late Loans = Sum(50% * (unpaid percentage) * (interest rate of the late loan))

• Loss due to Default Loans = Sum(90% * (unpaid percentage) * (interest rate of the default loan))

• Lending Club Servicing Fee = 1% / 3 years = 0.33%

For those that want to use this information as input to other computations, we also expose this information via a downloadable XML file (available here) that gets updated daily.

Member Map

Available directly on our homepage, this feature displays information about current lenders, borrowers and issued loans plotted on a Google Map. Members are identified by screen name, and location is based on zip code only (with a certain level of Geocode randomization) to ensure members’ privacy. When an icon is clicked, a call-out displays the following information:

Borrowers / Issued Loans	Lenders
• Screen name	• Screen name
• Title / Link to the loan page	• Amount of portfolio initial investment
• Amount of the Loan	• Location (city, state)
• Amount left to fund
• Location (city, state)
Click to Enlarge Image	Click to Enlarge Image

This information is also available in XML format for external consumption here, and the file is updated on a daily basis.

As noted, we will be releasing additional data in the near future. Meanwhile, we hope the above information will be helpful to those who are evaluating Lending Club.

Better Rates. Together.

... told you to jump off a bridge, would you?

Almost weekly I see a new article that talks about things you should buy used. Why weekly? Because bloggers love to repeat what others have said.

But you're in for a treat.

Here is a great example of these articles: A list of everything you should ALWAYS buy used. Don't ever buy new jewelry! Don't buy new movies! And DON'T BUY A NEW CAR.

I completely understand where these articles are coming from. Yes, from most monetary standpoints, it makes sense to buy used jewelry and used movies. But these should be considered recommendations, not firm guidelines. There are other things to take into account.

My brother Ramit, over at IWillTeachYouToBeRich, wrote a great article about this issue. What's more important: the cost of the item or the value? Ramit put down several criteria for why he chose to buy a new car. Reliability was one of his reasons. But, after reading the article and talking to him, what was one of his most significant reasons? The new car smell.

My brother makes enough to afford a new car. He really wanted one that looked good and smelled good. He budgeted, planned, and found that it was well within his means. As I stated before, budgeting doesn't mean buying nothing. Personal finance isn't about living as a pauper, it's about getting the most out of your money today so that you'll still have enough in the future.

Next time you want to watch a movie and you're at Costco, don't skip the movies section simply because they don't sell them used. If you can afford a $7.44 movie or $9.66 for 2 movies or $20 for 1,343 movies (man I love Costco), consider buying them. If it doesn't break the bank, treat yourself to a good evening. And send me the movie when you are done.

With Lending Club’s recent expansion beyond Facebook, a new set of users has emerged. To coincide with that event, I’d like to discuss my personal finance philosophy and recurring themes from my previous posts to introduce myself to new users and give them an idea of what to expect from me.

Welcome
First and foremost, I would like to welcome our newest members. Facebook will continue to be an important aspect of the Lending Club community, but I am excited to see users joining Lending Club from outside of Facebook as well. Lending Club’s great rates for borrowers and lenders can now be enjoyed by an even wider user base, which is a positive change for everyone involved.

My Recurring Themes
As a regular contributor to the Lending Club blog, I discuss a wide array of topics. My posts can generally be categorized as current events, consumer protection, and basic finance. At the core of all of these categories is my desire to educate the reader. I do not attempt to make decisions for you. Rather, I try to give you an unbiased view of the topic so that you are better informed to make decisions for yourself. I advocate taking active control of your own finances, fiscal conservatism, and a common sense approach to money.

Going Forward
With the broader audience that will be using Lending Club due to the recent expansion, I will be modifying my approach slightly. While many of my posts will fall in line with my previous methodology, I will also be adding more Lending Club specific content as well. I believe strongly that Lending Club provides a superior alternative to traditional financial institutions for many people.

The Lending Club expansion is an exciting event in the world of P2P lending. Bringing affordable funding alternatives to the masses is a worthy goal. I am pleased to be a part of this movement and hope to add value to your Lending Club experience with my contributions to our blog.