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How can you join the ranks of America's wealthy (defined as people whose net worth is over $1 million)? No, you don't need to win the lottery, become a pop idol or inherit their money. It's actually easier than that, according to Dr. Thomas J. Stanley and Dr. William D. Danko who wrote The Millionaire Next Door - The Surprising Secrets of America's Wealthy.

The two doctors spent 20 years surveying America's wealthy. As they started to conduct their research, they had some trouble locating the wealthy. The researchers were surprised to learn that many of the rich people they interviewed did not live in upscale neighborhoods. In fact, many people who live in expensive homes and drive luxury cars do not actually have much wealth.

As Maneesh Sethi discussed on an earlier Lending Club post, most millionaires in the United States are average people except they invest their money on a regular basis and live modest lives. Most millionaires drive regular cars that they bought used for less than $25,000, live in modest homes and work in unglamorous industries. As a matter of fact, most millionaires are entrepreneurs and own and operate their own small businesses.

According to Stanley and Danko, here are the seven factors common among the millionaires he interviewed:

1. They live well below their means – This is a common theme here on the Lending Club blog and, in my opinion the most important. Wealth is rarely about how much you make – it's about how much you spend.

2. They allocate their time, energy, and money efficiently, in ways conducive to building wealth – Millionaires build deliberate short- and long-term plans. They budget and invest and use the services of financial advisors and tax consultants.

3. They believe that financial independence is more important than displaying high social status – Lending Club blogger Mike Smith discussed this point extensively in an earlier post entitled Change in mindset.

4. Their parents did not provide economic outpatient care – When parents bail their children out of financial difficulties, it tends to create children who are dependent on their parents instead of self-sufficient. Psychologist Gary Buffone said, "Typically, the more dollars adult children receive, the fewer they accumulate, while those who are given fewer dollars accumulate more." That is one reason why many people look at peer to peer lending options like Lending Club to facilitate loans between family members. Through loans instead of handouts, parents can teach important financial lessons. MSN money explores the concept of economic outpatient care further in an article by Liz Weston, Should parents bail out their adult kids?

5. Their adult children are economically self-sufficient – This grows out of the above point. Financial goals need to be family goals.

6. They are proficient in targeting market opportunities – Many millionaires are small business owners and they often own several businesses.

7. They chose the right occupation – The most important part about choosing the right occupation is choosing one you truly enjoy. If you wake up and can't wait to get to the office to start your job, you are in the right occupation. If your job is something you enjoy doing, you are going to do it well.

I recently received an email from a lady in the Midwest who was the victim of an online lending scam. She found my blog about P2P lending and wanted to know if P2P lending was a scam or if she could use it to lift her out of her financial troubles. With her permission I'm sharing an excerpt from her letter:

"…my husband and I have not had very good financial luck in the past 3 - 4 years.

We are interested in borrowing money; however, anytime we have tried to borrow money, our credit rating holds us back. We have been scammed out of over $2,000.00 in funding costs by prospective lenders, and we really do not have any extra money to lose.

If we need to borrow money, but do not want to give out our private information for fear of being scammed again, how could we know if we could qualify…

We have fallen behind on several bills, paid several others, but really need about $20,000.00 to just take care of all the creditors we have in one consolidated loan. We want to build our credit so we can get back into a house to make it a home for our family.

Please let me know if there is a way to apply for a loan without giving up our checking information and any 'up front fees' before we find out if we could possibly qualify."

Peer to peer lending is a perfect option for her and others in her situation — particularly because there are no hidden charges, and fees are only charged as a result of an accepted and approved loan. Unfortunately, however, loan scams are quite common and can make people reluctant to seek loans online. In her words, here is what happened in this lending scam:

"I found a company online…they were out of Portland, Oregon. I spoke with 3 or 4 gentlemen (of which I did keep names and numbers) — they told me what information they needed and promised me that after they sent the legal forms, I signed and returned them, they would wire transfer the $25,000 into my account the next day.

…they called me later after I faxed the papers and said everything was a go, and gave me the information to Western Union the money. I got all the money together and sent $1,785.00 to the guy in Canada, plus another $125.00 in WU costs, and then called to let them know the money had been sent.

I waited until the next day to see if the money was in my account and nothing showed up. I called and got the man's answering machine, but no return phone call. I called the next day and the number had been disconnected. I called WU and told them I thought I had been scammed and faxed all the paperwork to them. It was a very difficult lesson to learn, so now I am paying the price every week to payday and title loans."

You should never pay an advance fee to secure a loan. Legitimate loans, like loans obtained through Lending Club, do not require an up-front payment. Here are tips from the Federal Trade Commission on how to avoid lending scams:

• Don't pay for the promise of a loan. It's illegal for companies doing business by phone in the U.S. to promise you a loan and ask you to pay for it before they deliver. Requiring advance fees for loans also is illegal in Canada

• Ignore any ad — or hang up on any caller — that guarantees a loan in exchange for a fee in advance

• Remember that legitimate lenders never guarantee or say that you will receive a loan before you apply, or before they have checked out your credit status or contacted your references, especially if you have bad credit or no credit record

• Don't give your credit card, bank account, or Social Security number on the telephone, by fax, or via the Internet unless you are familiar with the company and know why the information is necessary

• Don't make a payment to an individual for a loan; no legitimate lending organization would make such a request

• Don't wire money or send money orders for a loan through Western Union or similar companies. You have little recourse if there's a problem with a wire transaction. Legitimate lenders don't pressure you to wire funds

• If you are not absolutely sure who you are dealing with, get the company's number in the phone book or from directory assistance, and call it to make sure you're dealing with the company you think you are. Some scam artists have pretended to be the Better Business Bureau or another legitimate organization

• Check out questionable ads by calling Project Phonebusters in Canada toll-free at 1-888-495-8501. If you live in the U.S. and think you've been a victim of an advance-fee loan scam, report it to the FTC online at www.ftc.gov or by phone, toll-free, at 1-877-FTC-HELP (1-877-382-4357)

I can empathize with this lady who was scammed. I consider myself to be pretty financially savvy but I was also scammed out of several hundred dollars in a different situation years ago. Scams work because people generally trust each other and want to believe that they can make money quick or get out of the troublesome financial situation they are in. We here at Lending Club remind you that the best defense against these lending scams is to spread the word. Please pass this post on to anyone that may benefit.

As we celebrate Veterans Day this weekend our thoughts here at Lending Club turn to service members and their finances. Well over a million U.S. troops have deployed in support of Operation Enduring Freedom and Operation Iraqi Freedom since September 11th, 2001. Many of these soldiers and their families face unique financial challenges during operational deployments. The challenges can be especially disruptive to Reserve and National Guard troops who may leave a better paying civilian job behind.

From a financial perspective, however, there are several potential benefits soldiers can receive while deployed to Iraq or Afghanistan (and most other countries in the region supporting those operations). In fact, one Air Force officer was recently featured in the New York Times after he volunteered to deploy in an effort to help him get out of debt. He has kept a blog about his journey to Financial Freedom in Iraq.

Here are a few of the financial benefits available to deployed soldiers:

Soldiers' and Sailors' Civil Relief Act - Wartime deployments can make it very difficult to fulfill financial obligations and exercise legal rights. To help mitigate these challenges, Congress has enacted the SSCRA. The two most used provisions under the SSCRA are:

• Service members with deployment orders may terminate leases early without penalty

• Service members may cap the interest rates on any outstanding debts at 6%. This applies to any debts incurred prior to the service member coming on active duty

Savings Deposit Program - Service members deployed in combat zones, qualified hazardous duty areas, or certain contingency operations may deposit up to $10,000 into the SDP where interest will accrue at 10% during the deployment.

Tax-free income - Income earned in combat zones is excluded from federal and state income tax based on the Combat Zone Tax Exclusion. Enlisted soldiers who choose to extend their contract while in a combat zone also receive their re-enlistment bonus (sometimes as high as $30,000) tax-free.

Hazardous Duty Pay - $100/month (This extra pay is listed as SAVE pay on Leave and Earnings Statements.)

Per Diem - This is only $3.50/day for locations like Iraq and Afghanistan, but for a year-long deployment it will add up to more than a thousand dollars.

Increased potential savings - Many soldiers, especially single soldiers, can greatly reduce their expenses while deployed. Rent, food, utilities and other expenses can be minimized or eliminated. There are also limited opportunities to spend money. This gives many soldiers the opportunity to pay off debts or jump start their savings.

Hostile Fire/Imminent Danger Pay (HFP/IDP) - $225/month

Family Separation Allowance - $250/month for married soldiers

Assignment Incentive Pay – Recently, the Army announced most tours will be extended from 12 to 15 months. Those that are involuntarily deployed for more than 12 months receive $1,000 for each additional month or portion of a month served.

There are many organizations that support the military. One of these, the Non Commissioned Officers Association (NCOA), was established in 1960 to enhance and maintain the quality of life for non-commissioned officers in all branches of the Armed Forces, National Guard and Reserves.

Lending Club recently partnered with NCOA to provide additional services and benefits to service members and their families. Through this partnership, NCOA members can borrow and lend to each other directly and get better rates than those offered by banks or credit card companies.

This weekend we celebrate Veterans Day - an American holiday honoring military veterans for their contributions and sacrifices for national security. The holiday is also known as Remembrance Day or Armistice Day and celebrated by several other countries on November 11th as well. It is the day that marked the end of World War I in 1918.

When Lending Club asked me to author a Veterans Day post, I knew I wanted to share a song written by Terry Kelly eight years ago.

Kelly is a blind singer, songwriter, speaker and entertainer. On November 11, 1999 he was in a grocery store in Canada. At 10:55 AM an announcement came over the store's intercom asking customers who would still be on the premises at 11:00 AM to give two minutes of silence in respect to veterans.

When eleven o'clock arrived, an announcement was again made asking for the "two minutes of silence" to commence. All customers, with the exception of one man who was accompanied by his young child, showed their respect.

Terry's anger towards the father for trying to engage the store's clerk in conversation and for setting a poor example for his child was later channeled into the song called, "A Pittance of Time". (Watch the video on YouTube.)

Here's a selection of the lyrics:

But two minutes I will bide
It's a pittance of time
For the boys and the girls who went over
In peace may they rest, may we never forget why they died.
It's a pittance of time

Take two minutes, would you mind?
It's a pittance of time
For the boys and the girls who go over
In peacetime our best still don battle dress
And lay their lives on the line.
It's a pittance of time

Terry wrote this song before 9/11 when fewer soldiers were deployed. Now, well over a million U.S. soldiers have deployed in support of Operation Enduring Freedom and Operation Iraqi Freedom. I am in the Armed Forces and have recently returned from a third overseas deployment. I have seen up close the sacrifices that soldiers and their families have recently made. Our young veterans are joining a long line of those who have proudly served in our country's wars in an effort to make the world a better, safer place to live.

I want to thank Lending Club for the invitation to recognize our veterans on the blog and I join with them in thanking our servicemen and women and their families for their sacrifices.

Gary Hoffman is in the news after he seemingly won $1.6 million dollars playing nickel slots on an Indian reservation in New Mexico. He says he became 'ecstatic' when the machine said he had won $1,596,244. Those feelings quickly soured as the Sandia Resort and Casino claimed the machine malfunctioned and gave him $385 instead. He filed a lawsuit and told ABC News, "I won my money, fair and square and I've been cheated out of my winnings."

This is not the first time casinos have refused to pay winnings based on machine error. A casino in Winnipeg, Canada refused to pay two men $209,716 due to software error in the last year. In 2005, a man received only $1,199 instead of $11 million after a casino in Oklahoma said the machine also suffered from a software error. In one case in Pennsylvania, a casino gave a man two free meal coupons instead of $102,000 after the casino's computer system malfunctioned. They later changed their minds and awarded the man his winnings after an onslaught of bad press.

The controversy has centered on who is at fault – some blame the casino while others blame the machine manufacturers. In other situations, some have even faulted the slot machine players and tried to send them to jail.

The real story, however, is much less exciting and is buried on page 3 of the article. "As for Hoffman, Sandia officials say he has visited the casino more than 70 times in the first six months of 2007, a claim Hoffman did not dispute." Slot machines and gambling are good examples of those money suckers that Maneesh Sethi wrote about last week, here on the Lending Club blog. Regular visits to casinos can quickly drain your cash.

While gambling, it is easy to overlook how much money you are spending. There are several gambling fallacies that cause people to think they can come out ahead. For example, the availability error causes people to be more likely to remember positive events. The news stories of lotto winners cause us to think our odds are much better than they actually are. Statistics show a different story. For example, the odds in the California Lotto Jackpot are approximately 1 in 18 million. If you drive ten miles to buy a ticket, you are three times more likely to be killed in a car accident than to win the jackpot. Avoiding money-sucking games of chance like slot machines and lotteries will help you free up money to invest in person-to-person loans.

Look at it this way - every time you don't buy that lotto ticket you win a dollar.