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With Google shooting through the $600 per-share price, ads on the radio promoting getting rich by investing online, and friends who whisper about others who hit the online investing jackpot, it’s no wonder that many people have started investing online.

For many people, online investing has provided them with more control and access to tools that were not previously available. But to others it has proven to be a stumbling block.

Research done by Barber and Odean in 20021 says that many investors do much worse when they invest online compared to offline investing approaches. According to the US SEC there are over 10,000 stocks available for trading and thousands more of mutual funds, making decisions difficult.

Looney and Associates (2006)2 researched how technology and investing are related. They found two things:

1) Your understanding of the Internet and related technologies can give you a biased understanding of investing. When you’re feeling in control because you know how to use the Internet, you might also feel overconfident about your investing capabilities.

TIP: Don’t confuse being confident using the Internet with being confident with your investing skills. They are separate, with investing requiring discipline and homework.

2) The availability of advanced tools and information might give you the feeling of being more in control of your investments. This might be even promoted by brokerages and other companies with statements like “You’re In Control.” Add to that the mountains of information and analysis available to investors that can lead to distorted views and expectations.

TIP: Use real world expectations about the homework that you have to do before investing and with respect to the results that you will receive from those investments.

Next time you hear about the hot stock tip or another revolutionary investing system, remember that investing requires real work and homework to be done in order for you to be successful. Also be sure that you are diversified in your investments, using such instruments as stocks, bonds, mutual funds, and P2P loan portfolios on Lending Club.

1 Barber,B.M.,& Odean,T.(2002).Online investors: Do the slow die first? Review
of Financial Studies, 15(2),455-487

2 Looney, C. A., Valacich, J. S., Todd, P. A., & Morris, M. G. (2006). Paradoxes of Online Investing: Testing the Influence of Technology on User Expectancies. Decision Sciences. 37(2), 205-246.

Getting out of debt can be such a long process that it often seems like the final destination. Unfortunately, once your debt is gone, some financial decisions may become more difficult. While you were working your way out of debt, the question of where to put any extra money that you could come up with was probably a no-brainer: pay down your debt. Without the obvious way to apply your money, you may be left wondering what to do once you’re debt-free.

Here are a few options to consider:

Fund Your Retirement
Contribute as much as you can afford to your retirement accounts. Depending on the type of plan that you have, there may be additional benefits, such as employer matching or tax-free earnings growth. Many people are becoming solely responsible for their financial well-being in retirement, so don’t short change yourself.

Invest
Let your money work for you by investing it. Investing takes on many forms, from stocks and bonds to real estate to Lending Club P2P loan portfolios. Consult with a financial advisor or trusted source before proceeding, particularly if you’re new to investing.

Build a Buffer to Prevent Future Debt
Savings accounts have their place in a solid financial plan. By routinely saving, you’ll be creating a funding source for purchases and unexpected expenses that previously would have been prime candidates for using your credit card.

Allow Yourself a Little Fun
After working hard to get out of debt, you deserve to have a little fun. So consider allowing yourself a small indulgence from time to time. Be mindful not to overdo it!

Keep Up Your Good Habits
The habits that get you out of debt can keep you out of debt, so keep up the good work. Falling back to your old ways will ensure that your debt-free life is short-lived.

Having more money then you know what to do with sounds like a problem we’d all like to have. The newly debt-free often find themselves with so many options that they have a hard time making good decisions. Now is the time to educate yourself about your options to ensure that you maximize the benefits of being debt-free.

In previous posts on the Lending Club blog, there have been warnings of things to watch out for when shopping online, such as phishing, and suggestions for ways to compare before buying to save money. In this post I want to look at three tips that will help you make better decisions when shopping online.

Lee and Associates1 conducted a study to see how people can avoid lemons when shopping online. They found that you should take into consideration three criteria to determine if it is safe to shop online on any particular site.

1. Unconditional Money Back Guarantee – The researchers found that merchants who wanted your business for a long time offered an unconditional money back guarantee, at least for a short time after a purchase.

Imagine searching for the new Apple iPod and upon finding what you think is a discount, you see that the site has either “All Sales Final” or “No Refunds” or even “25% restocking fee” as part of the order check-out information. All of these phrases should raise red flags in your mind, and if you see them you should think about going to a different online store.

2. Branding – Branding is the name of a shortcut in your mind that companies spend millions in developing. But branding also has its benefits for consumers. With branding, the company is investing in a long-term relationship with you. It is not focused on a one-time transaction.

For example, if you were shopping for an MP3 player and didn’t know much about them, it would make sense to go with one of the more “branded” ones, such as Microsoft Zune or Apple iPod. This way, although you might spend a little bit more, you will also know that millions of people already decided on the same brand.

3. Privacy Statement – Researchers in this study found that a Privacy Policy communicates a significant amount of trustworthiness. It should not be only thing you consider when shopping at a site, however, because it is more difficult to judge if a company is following that policy.

Based on this research, none of these criteria should used alone for making a purchase decision. However, we here at Lending Club suggest combining them to help you navigate online stores and avoid falling victim to any malicious merchants.

1Lee, B.-C., Ang, L., & Dubelaar, C. (2005). Lemons on the Web: A signaling approach to the problem of trust in Internet commerce. Journal of Economic Psychology. 26(5), 607-623.

As is true in so many areas of our lives, we all have enormous influence over the financial situations we find ourselves in. While it is sometimes difficult to admit, particularly when we come on tough times, we often control the reasons for our current financial state.

Taking personal financial responsibility is a liberating experience. It’s easy to blame high interest rates, a bad investment, or confusing mortgage terms for the cause of your troubles. The problem with such an approach is that things in the past are out of your control. When you take a hard look at where you are today and decide to take action, you regain the control.

It’s great to browse the P2P loan requests on Lending Club. I really enjoy reading about people who have made the decision to take back that control. Whether they’re refinancing high-interest credit cards, funding purchases at affordable rates, or financing their entrepreneurial aspirations, one thing is clear: they realize that their success or failure is in their own hands. While you might make mistakes along the way, denial and inaction rarely solves any problem.

If you’ve had enough of your finances always seeming out of control, do something about it! You have that power within you. If you need help getting started on the path to a better place financially, you’ve come to the right place. The Lending Club blog is constantly covering a wide range of financial topics to educate our readers. By staying informed about current financial events, consumer protection information, and even basic financial literacy, you will be well prepared to recognize and act upon opportunities as they present themselves to you.

Taking personal financial responsibility isn’t about blaming yourself for your problems. It’s about recognizing that while your financial past cannot be changed, a more promising financial future is entirely up to you.

Where is your money going? When you look at your bank account at the end of the month, do you know where all that money went? Unless you keep a detailed budget, you probably have no idea how your money went from 'yeaaa' to ‘yikes' in 30 days.

Where does your money go? A lot of times, your money is disappearing into the abyss of money suckers--- services and items that essentially take your money without returning great value. For example, think about the cup of fancy White Chocolate Mocha with hazelnut and soy milk. Sure, it's only 5 bucks for the drink (and it includes a free 500-calorie, heart-attack-inducing delicious pick-me up), but what happens when the habit moves from once a week to once a day? When you are suddenly paying 35 bucks a week for a morning coffee that you probably don't need, coffee has become a money sucker.

Why are they called money suckers? Well, they suck your money away. Also, you become kind of a sucker for subscribing to them. (Two levels, get it?) Some of these things add up and you can even forget how much you are paying for them.

To find your own money suckers, just look at your credit card statements and watch your spending for a month. Notice how much you are paying for your cell phone plan (do you use all your minutes?), for cable TV (do you watch all those channels?), for food and drinks, and for anything else that you buy on a consistent basis. Look at magazine subscriptions and other recurring payments in particular.

Recurring payments and addictive substances (like coffee or cigarettes) are the biggest money suckers. If you can do without them, your finances will be a whole lot better. Once you have some extra cash available from applying these savings techniques, try investing in some person-to-person loans on Lending Club.