Remember the crossover point? The crossover point is my final investment goal--it is the point where the interest from your investments equals your income. Essentially, it is the point where you can retire and still be earning the same income.

After this topic received a lot of attention, one programmer took it upon himself to create a crossover point calculator. You can see the calculator at Ryan Stewart's What's My Crossover? This awesome calculator is incredibly simple. Just enter in some basic data like your income and investments, and it creates a graph that shows you when your investment returns and your income intersect!

For example, if you are 20 years old and are making 60,000 a year (with a 4% annual raise), and you promise to put away 25% each year, your crossover point for when your returns equal your expenses will be under the age of 40. The crossover point for when your returns equal your income is under the age of 45.

Try inputting some valid, reasonable numbers that you think you can achieve. If you are able to spend less than you earn, always pay off your debts, and invest the rest of your money, you will be able to retire much earlier than you might have thought possible. Your investments – P2P loans on Lending Club, mutual funds, etc. -- will help you live without the need for a salary. Should you choose to keep working, you can very quickly become very wealthy!

Remember, the trick is simply to spend less than you earn. Compound interest will do the rest. Good luck!

You know the costs of carrying a credit card balance can be overwhelming. You also know that consolidating debt through a P2P loan from Lending Club may be an affordable way to avoid carrying a balance month after month. Some consumers think that they’ve found an easier solution to the problem: they play the balance transfer game.

The balance transfer game is the practice of transferring your credit card balances to new cards with low teaser rates in the hope of saving on interest charges. I call this a game because it is a cost-saving activity that is occasionally won and often lost.

Here are the main problems with balance transfers:

• Interest rates on balance transfers are often temporary
• Payments are typically applied to the lowest interest rate first
• A late payment (or universal default) could instantly raise your interest rate
• Repeatedly opening new credit lines could adversely impact your credit score

With all of these caveats it’s easy to see why the balance transfer game is often a losing proposition. In order for it to be beneficial, you would have to very rarely play the game, not use the new card for other purchases, pay the bill on time, pay all of your other bills on time, and pay off the balance before the low rate expired.

Trying to save on interest, in an effort to reduce your debt, is a noble aspiration. Thinking that you can short-cut the process by playing a risky game like repeatedly using balance transfers is not the way to go. If you are truly looking to get out of debt and establish better credit, get off to a good start by consolidating in a responsible manner.

Are you cheap or frugal? Although everyone has different definitions for these words, here is how I use them:

• Being cheap - You are unwilling to spend money on anything. Even stuff you need. You go out of your way to save money, even when it might not be a great idea.

• Being frugal - You don't waste money. You spend it on things you need, and save it on things you don't.

Clearly, being frugal sounds better than being cheap--that's how I defined it. ☺ The problem with being cheap is that not spending money is actually hurting you or your finances, not helping you.

How can saving money hurt you? Well, take a look at this article from WiseBread. The writer's mom saves up ketchup packets, and when her ketchup bottle at home is empty, she cuts up each of the packets and refills the bottle.

That is being cheap, not frugal.

Now, maybe she enjoys cutting up the packets and she considers it fun and relaxing. That's a different story. But if she does it from a money-saving standpoint, well, that isn't very smart at all.

The money she saves by cutting up packets (what, maybe $2?) is not even close to being worth the time it takes to do it (1-2 hours, probably). In that time she could do a multitude of things that might make or save her money, like planning her finances, or working. However, even if she didn't do any of those things, she only saved $2 dollars. That amount of money isn't worth 1.5 hours of cutting and squeezing plastic packets.

The point of having money is to use it wisely. (On a side note, when the shampoo at my house gets to the bottom, my mom fills it with water and shakes it around and uses that. When I got to college, I was surprised that everybody didn't do that.)

Don't be cheap. Be frugal. Then take all the money you’ve saved and invest in P2P loans on Lending Club.

Janice Revell wrote a clever article on the lessons that could be learned from Britney Spears' spending habits. The article ties in nicely with a recurring theme on the Lending Club blog: your income doesn’t determine if you’re wealthy. Wealth is a measure of what you have left after your income and expenses are reconciled.

The article goes on to explain that despite a monthly income of about $737,000, Britney is not saving or investing. The details were revealed in recent court proceedings. While it’s hard to believe that someone making almost 9 million dollars a year isn’t wealthy, the fact remains that her spending habits are forcing her to live paycheck to paycheck.

We can all learn a lesson from this. In order to build wealth, you need to spend less than you earn. It’s a simple idea, but one that is rarely observed in our society. As I said in my post about saving your financial future, the average savings rate in our country is less than zero. That means that most people live beyond their means.

Savings comes in many forms. For some it’s stockpiling money into a bank account. For others it’s investing in P2P loans through Lending Club. Still others are funding their retirement accounts. For many, it’s a mixture of many types of savings vehicles. Depending on your age, you’ll likely choose a different mixture of ways to save.

Younger readers have the advantage of time. The point of the referenced article is that someone in their mid-20s can attain a nice retirement by saving about 8% of their income in a 401K or similar tax-advantaged way. That capability comes from the fact that their investments will have time to accumulate compounded interest over the years. Obviously some assumptions about rates of return, inflation, etc., were made for the calculations, but those assumptions were all reasonable.

Regardless of your age, and subsequently your preferred method of savings, you’ll only be able to save by keeping your spending below your income. Doing so will allow you to build your wealth more quickly than even some of the highest paid superstars of the day.

The value of your time isn’t necessarily the same as what your employer pays you. Knowing what your time is worth can be helpful in making tradeoffs between your time and your money.

I found a useful calculator for determining the value of your time. The calculator takes much more than just your income into account. It looks at where you live, what you pay in taxes, and your work expenses to determine your true net pay. Then it looks at how much time you spend on your job.

You spend more than just your working hours on your job, due to commuting and other work-related activities. Knowing your net pay and the amount of time it takes you to earn it gives your true net hourly wage.

Things get even more interesting when you enter in what you do in your non-work hours. Between sleep, household chores, the kids, and other essential weekly activities, you’re likely left with little free time. By analyzing the number of leisure hours you have relative to working hours, the calculator is able to determine how much you work for each leisure hour and determine what those hours cost you. As a simple example, if you worked 50 hours a week and had 25 hours of free time, then your time would be worth twice your net hourly wage.

Once you have your final number, you’ll know if it’s worth it to use your free time on a project, or pay someone to do it for you. In general, if someone is willing to do a job for less than the value of your time, you should pay for the work to be done. If you’re short on cash, you can always fund a project with a P2P loan from Lending Club. Whatever you decide to do, knowing what your time is worth will help you to make an informed decision.

Now that you know what your time is really worth, be sure to make the most of it!