Yesterday morning our CEO, Renaud Laplanche, appeared on Fox Business News and discussed how Lending Club is leading the charge in a rapidly growing peer-to-peer lending space.

Check out Renaud on Fox Business News >>

We all know peer-to-peer lending is a fast growing alternative for those looking for a personal loan. Lending Club offers an easy, confidential and secure way of getting a loan without involving your bank.

On the investors side, Lending Club notes average 9.66% net annualized returns. Lending Club notes are offered by prospectus filed with the SEC.

My favorite part of the interview was when Renaud points out that Lending Club is not an option for those with weak credit histories, but instead, Lending Club is an alternative for creditworthy borrowers. That is, smart borrowers looking to get rates that are often lower than those offered by banks or credit card companies.

Enjoy the interview!

Rob

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In part 1 of this interview, we met Adam Baker from one of the fastest growing personal finance blogs, Man Vs Debt. We discussed his lifestyle downgrades, ramifications of selling most of his possessions, and aspirations for his impending relocation abroad. Today’s topics include his financial mistakes, what he’s learned during his war on debt, his unconventional debt elimination strategy, and what the future holds. Here’s the conclusion of our conversation:

Mike Smith: Do you have any financial regrets?

Adam Baker: Sure. I regret going to college the way I did. I don't regret the experiences I had, but I went to college and took on loans when I wasn't serious at all. I had no chance of success and even if I had, I might have wanted to travel or open my own business, etc...

I regret ever getting used to the ease of credit cards and I regret initially financing my first car, instead of saving up cash. That all being said, we've done a great job of overcoming these hurdles and have luckily avoided what may have been our biggest regret... buying a house right after marriage.

MS: One could argue that your debt helped to make you the person you are today. Were the lessons you've learned worth accumulating that debt?

AB: I would say "Yes" at this point, but only because we didn't go too far overboard. In my mind, I got in just enough trouble to learn a lesson without doing some serious damage. I consider myself lucky in this aspect. I could have easily over extended myself into real estate, leased or purchased a new car, or any number of other financial mistakes that would have probably not been worth the lesson!

MS: Do you hope that sharing your experiences on ManVsDebt will allow others to benefit in a similar way, without having to experience the pain?

AB: That would be really awesome. Prevention is always the best solution to a problem. Whether people avoid some of the mistakes we did or simply have increased passion on their own battle against debt, this would be a major plus in my book!

MS: You advocate a different approach to debt reduction, which you call the Debt Tsunami. Can you briefly explain the idea and why it works better than other methods in certain cases?

AB: Briefly, the Debt Tsunami is a debt reduction method which has you prioritize your debts in order of their emotional impact. Many times in finance, it's good to remove emotions from the equation. Buying a house or investing a windfall, for example. However, for most people this theory doesn't work well for debt reduction.

My biggest problem with approaches like the snowball is that they assume that the lowest debt will always help you build the most momentum. This obviously isn't always true. Also, some personality types (although not the majority in my opinion) receive much more validation from paying off debts with the "logical" or "quickest" method. They tend to minimize the emotional impact altogether.

That's why I love the Debt Tsunami and why it has worked for us. It has the flexibility to incorporate both of the examples above. The hard part is connecting with each debt and being honest about its emotional impact.

[For more information, read ManVsDebt’s full post describing the Debt Tsunami.]

MS: You've also been building up savings while paying down debt. This method seems to have an emotional, rather than mathematical, motivation as well. Can you describe your thought process regarding this approach?

AB: The only reason we did this is because, we made the decision almost a year ago that we were going to relocate to Australia. Had we not made the decision to relocate, we would have kept our emergency fund low and continued to plow into debt. The decision to relocate was one that was much more emotional than mathematical, though.

It's about prioritizing your life. For us, we knew we had to eliminate non-student loan debt, as well as save substantially for the move. We prioritized it in that order, which is now followed by knocking out the remaining student debt.

MS: Your blog currently reports that you are about $52K in debt, with a net worth of about negative $33K. Where do expect your net worth to be in two months, two years, and two decades?

AB: In two months, I expect our net worth will actually be down a little bit. We will need to rely on our savings a little while we get set up in Australia, which has been the plan all along. We plan on concentrating on making this as short as possible in terms of time, though.

Two years down the road, our goal is to be completely debt-free. I'd be happy with a $0 net worth. Two decades, I'm not really sure at this point. I'm not worried about saving X amount of dollars, because I have no idea what our priorities will be. If we decide to extend our family, I'm sure we will focus more on building net worth, although we may decide to continue to travel and donate our time to worthy causes. Either way, we'd like to maintain a completely debt-free lifestyle!

Many thanks to Adam for taking my questions, especially so close to his move date. You can follow his interesting story at ManVsDebt or connect with him on Twitter. I know I’ll be watching his progress closely.

Would you consider extreme actions to eliminate your debt?

Adam Baker has been taking the personal finance community by storm. His blog, aptly named Man vs. Debt, has seen an unprecedented growth in popularity in its first two months of existence. His aggressive approach towards eliminating debt, coupled with his outgoing personality, make reading his blog both educational and entertaining.

The birth of his first child led him, along with his wife, to a series of decisions that included: selling their small business, leaving a stable career, declaring war on their debts (read his Declaration of War), selling all of their possessions, and heading off to Australia within 1 year. The plan has all come together and the move to Australia is set to take place this weekend. I had a chance to ask a few questions to better understand the man behind ManVsDebt. Here’s what he had to say just before heading out of the country:

Mike Smith: It seems as though the things that bring us the greatest success make us weak in the knees when we first consider them. Do you feel a healthy fear regarding your impending move?

Adam Baker: Actually, not really. I don't think it has actually set in yet. Plus we have been able to save up a $15k+ emergency fund (a lot for our lifestyle), so this really takes the edge off. Most importantly, we've done as best as we can to set our expectations and to have an open mindset. We are really viewing this as a stress-reliever more than anything! I'm thinking my tune will change after the long flight with the baby.

MS: Has selling your possessions been a sacrifice that feels limiting or a relief that feels liberating?

AB: On a small scale, it's been a sacrifice. There have been a couple things we've really struggled with parting with. However, once we got rolling the sacrifice "feeling" quickly got replaced with an overwhelming sense of liberation. Now it feels AWESOME! It's actually an addicting process. I continually want to eliminate more and more.

MS: Has downgrading your lifestyle been easy or hard? That is, are you making sacrifices that hurt or do the positive benefits make it seem worthwhile?

AB: Once again, the hardest part was really shifting our mindset early on. Luckily, the birth of our daughter gave us a ton of motivation to kick into high-gear. Unfortunately, it often times takes an event like this for us to overcome our "but we deserve it" attitude. Like eliminating our possessions, once we got rolling with a more limiting lifestyle it became easier and easier. It's almost like a game to us, seeing how minimal our lifestyle can be.

MS: Am I correct to assume that you have very few monthly bills, other than debt repayment? How can you live without the things most people consider 'necessary'?

AB: That would be a fairly accurate statement. Right now, I think people are really taking stock of what is necessary. For example, television. With so many online options it seems almost silly for computer-literate people to still pay these high cable bills, especially when they are eliminating debt. I don't want to beat a dead horse, but it comes down to your mindset. It only took me one week to get used to not having a TV. It went from "necessary" to "frivolous" in almost exactly 7 days.

MS: My year abroad brought me much more in life experiences than it did in financial success. Do you expect the same, or are you looking for a balance of the two (or a focus on financial success)?

AB: Well, we are certainly looking for a balance of some sort. Although, I will say we are much more concentrated on the life experience part of the equation. I'd like to eliminate the remainder of our student loan debt within a two-year time frame, which will still include us living on under 50% of our expected income. Frugal traveling is the name of the game for us right now! It's not an oxymoron!

MS: How will you manage your domestic obligations from abroad? Do you believe in automating your finances?

AB: We are almost exclusively online now. We've known the trip was coming up for nearly a year, so we've been minimizing our domestic obligations. Our mail will be going to a family member, which helps. We bank with ING Direct and do electronic payments for our student loan debt. Since we have no other U.S. bills, this system will be easy.

I believe in automation, but only to a point. I think often times people become too automated and thus lose touch with their finances. You should only be automated if you are completely in control and can maintain some intimacy.

In the conclusion of our interview, Adam will discuss the lessons he’s learned from his financial mistakes, his unconventional debt elimination strategy, and what the future holds.

In part 1 of this post, we met Pete from the spiritually-based personal finance blog, Bible Money Matters. He described why faith and finances go so well together, how his faith influences his finances, his use of the Bible and some financially relevant scripture. Today’s topics are somewhat more abstract, though the answers are equally interesting. Here’s the conclusion of the interview:

M: Do you believe in a world of scarcity, or a world of abundance? The former implies that for you to get ahead you'll need to take away from someone else, and the latter implies that we can all improve our lot in life.

P: Dave Ramsey's "Total Money Makeover" is a good one that mixes in some faith, while not being preachy - good for all audiences. Another good one that I read recently was called "Does Your Bag Have Holes" by Cameron C. Taylor. Anything by Jay Peroni is also good.

Again, thanks to Pete for sharing his thoughts on this subject. Interested readers can learn more at Bible Money Matters. Regardless of your own religious beliefs, sound financial principles, from any source, are worth integrating into your daily life.

Does your faith influence your financial decisions?

Many of our laws and customs have a spiritual basis, so it should come as no surprise that spiritual beliefs serve as a source for financial inspiration and guidance as well. To help understand the complex subject of spiritually-based financial advice, I enlisted the help of someone who deals in this niche topic every day.

Pete Anderson runs one of a growing number of spiritually-based personal finance blogs, Bible Money Matters. He started the site last year as a place to capture his thoughts on matters of his Christian faith and how it affects his finances. Pete graciously agreed to a question and answer session, which I’d like to share with you.

M: Why pair faith with finances?

In everything I did, I showed you that by this kind of hard work we must help the weak, remembering the words the Lord Jesus himself said: ‘It is more blessed to give than to receive [Acts 20:35].’ This reminds me that we are implored to help others, and that giving of ourselves and our money is of the utmost importance.

Now that we have a basic understanding of the topic, we’ll cover some more difficult subjects in the second part of this post. We’ll explore the world of scarcity versus world of abundance, the apparent conflict between spiritual advice and lofty financial goals, differences between spiritual and secular financial advice, and more.

How do you feel about the answers so far?