I’m excited and proud to announce that our new crowdfunding website is finally up and ready and we already have two live campaigns! Please visit our site, and spread the word about extraFUNDS with all your friends! With your help, we can make a huge difference in people’s lives!
“More than half of American households with someone 55 or older have no retirement savings, and many will have only Social Security benefits to live on after they stop working, according to a study by the Government Accountability Office.” (Read Full Story Here)
Social Security is a government savings program intended to be a financial safety net for people retiring. However the average person is only able to receive $14,000 per year from Social Security and many experts are saying the program itself is not sustainable and will likely go bankrupt, especially if taxes are not raised for that purpose.
Here’s my two cents for those of us not currently saving money or preparing for emergencies.
1) First and foremost, do not rely upon the government to be your retirement plan.
2) Set money aside every month, no matter how bad things are. Everyone can spare $10 each. Try to add more when times are good. Make it a rule to not touch these extra funds.
3) Be cautious of the Stock Market. Have at least one account that is not linked to stocks. A traditional savings account. Put at least half your savings into this account. This way if the markets really take a hit, at least a portion of your savings will be safe.
4) Invest in commodities. More specifically invest in a long term food storage plan. You can find dry pack meals that are quite delicious that have a 20 year shelf life. Here’s one company that specializes in such items. They also sell other emergency preparedness supplies that are worth having around if you have a few extra dollars at the end of the month. Our local grocery store sells dry pack cans of wheat and other long term storage items. I will buy a 5 gallon bucket or a few cans every month or so. Having some drinking water in storage in your basement is a good idea too. Owning, guns, gold, silver, bullets, and tools are often good to have around. If nothing else, they hold value and if things ever get really bad they can be traded.
Obviously it’s not easy to be prepared. Our culture is one of waste and convenience. Being financially and physically prepared takes time and practice.
That’s why I recommend people start preparing today. But, more than that, let’s try to become more self reliant. ExtraFunds seeks to expand its resources to help people achieve this goal, to be more financially prepared.
So if you’re like most Americans, you probably own a lot of stuff. It’s an interesting fact that many of us are living from check to check and have less than $400 in savings BUT we all have storage units filled with things we usually don’t need or stuff lying around the house or yard. It’s kind of the American way isn’t it.
Well, if you are wondering when it might be a good time to sell some of those items, keep on reading! 🙂
But first let me provide some disclaimers. I own a business that helps connect online borrowers to online lenders (extrafunds.com). We of course like what we do and love to help people use credit to their benefit. But, we also love to help people get a hold of their finances and encourage borrowers to exhaust other resources before applying for any small dollar loan.
One great way to avoid getting a costly installment loan is to look at whatever assets you have that you can liquidate. The best time do this is when you are not desperate to sell.
So here’s a friendly bit of advice. Avoid pawn shops and anything like unto them. Play It Again Sports, for example, is not a great place to get good value for what you may own. First try a friend, if you’re selling a bicycle for example. Play It Again’s goal is to buy as low as possible and sell as high as possible. Since they are selling used items and are looking to be a better value than a normal retailer, you will get beat up when trying to sell to them. Same goes for used car dealers, pawn shops, etc. Try Craigslist first or the local paper or radio. You’ll even have better luck at your own garage sale.
You might be really surprised at how much money you can get by selling things you don’t need anymore. And I guarantee you’ll feel better. Something amazing happens inside when you de-clutter your life.
My recommendation for when you are swimming in cash is to pay off bad debt. When I say bad debt, I mean high interest loans, old credit card balances, friends, old doctor bills… all the stuff that causes you to lose sleep at night. I’ve said this before but it’s worth repeating. Don’t feel like you need to make minimum payments on everything – sometimes that’s a waste of hard earned money. Pay off as much as you can when you can. For example if you have an extra $1000 and you owe $5,000 on credit cards and your balances are $250, $1,000, $500, and $3250. Your minimum payment is say $50 on each card. I’d recommend taking your $1,000 and paying OFF the $250 and $500. Make minimum payments on your $1,000 and $3250 plus whatever is leftover, pay down one of the balances. Then I’d make sure I NOT use those cards again if I can help it. Or at least only use them responsibly.
If you own a home and have any potential value in it, NOW is the time to refinance or sell. Interest rates will NEVER get any lower and I think we are nearing the top of the real estate market in most areas of the country. Remember that economic cycles typically last 7 years. The last market correction came in the fall of 2008 so 2015 could be our year.
The Fed is also already talking about raising interest rates this fall. Rates rising might also quickly spike demand in real estate and/or cause people to refi or sell, or buy before the rates go back up. This could be great for you if you’re looking to sell and make more money. But, either way, the safe bet, if you are thinking about taking advantage of any asset value in your home, is to start looking at this option now.
I have a friend who just refinanced his home. He was able to lock in a lower rate for 30 years and get $30,000 out to pay off credit cards. He’s closing those credit accounts and he’s saving $800 per month! Smart move.
Well, the best time to sell stuff is today. Don’t put it off if you’re feeling like you’re wasting money and space and could use the cash to get out of debt.
Thanks for reading and continued success in working towards getting your house in order!
In today’s world it’s hard to know what to do to get your house in order. It’s especially hard to think about these kinds of things when you’re struggling to make ends meet.
But, financial wellness is a mindset, and it’s never too early to start planning. I know far too many “wealthy” people who are terrible with their finances and as a result, are never ready for life’s financial setbacks. They too, believe it or not, live paycheck to paycheck and often resort to short term loans to make ends meet.
Here are a few recommendations:
1) Truly wealthy people count pennies. You’ve heard this before. To me this simply means, learn to be frugal. Learn to shop around. Don’t spend money unnecessarily. Never spend more than you have or more than you have to. Be slow to use credit for things that lose their value or don’t make money. Don’t blow money on expensive clothes, jewelry and cars, etc. Learn to be satisfied in things that have a longer shelf life: family, alone time, hikes, leisure activities, service.
2) Pay off debt. When you do use credit, or get a loan, pay it off quickly, especially when it’s small dollar credit. In other words, if you have 10 creditors, pay off the smallest ones first. Don’t be as concerned about which one has the highest interest rate, pay of the smallest first and work your way up. This creates a debt elimination mindset that will become infectious.
3) Live within your means and try to increase your income. Too many of us simply spend what we make, never saving, and often never seeking to make more, while spending less. I’ve blogged before about creative ways to earn money on the side. But, most importantly, train yourself to live within your means.
I will conclude with a thought I share often. Always remember that money isn’t everything, but when your finances control you it’s often hard to find peace in life. Make changes today. Think big! And don’t give up.
We are very excited to have been featured in Beehive Startups this last week! We want to thank Christopher Rawle for his very professional coverage. He is an excellent writer and is definitely a friend to Utah start ups! I’m including his article on us below:
If you’ve traveled the winding path of financial destitution and reached its end with literally nothing left in your pockets, then you’ve probably applied for a short-term loan (known within the industry as installment loans).
Everybody’s reasons for seeking installment loans are different. Maybe you need some money to buy groceries for your family, maybe you just want to go spend $20 on candy bars. I don’t know, I don’t care, I’m not here to judge.
The point is, if you’ve sought an installment loan through traditional methods (see: banks), the process can be inefficient and time-consuming, a problem when you need a short-term loan. This is why the online lending marketplace, a much faster and efficient alternative to the banking route, is beginning to explode.
Among the companies taking advantage of this online explosion is Logan-based ExtraFunds. Founded in early 2010 and owned by Ottawa Capital, ExtraFunds specializes as a servicing and marketing company within the online lending marketplace.
“Our current niche has been with lenders who do online installment loans,” CEO Aaron Bishop said. “For many people, it’s going to be a last resort loan. Some people have damaged credit, no credit, or they don’t have a good banking relationship. They will look online for one of our lending partners, we will actually service the loan and solicit those customers to try to connect them to the lender.”
ExtraFunds doesn’t supply the money required for a loan, but connects the borrower with the best possible lender via the online marketplace. Bishop gave the best comparison — ExtraFunds is to installment loans as Netflix is to movies. They don’t give you the money, Netflix doesn’t make the movies, but both provide customers a way to access each particular service.
So just like can’t get mad at Netflix when you watch another Spiderman and want to bash your head against the nearest table, don’t drag ExtraFunds under the bus for failing to get the money you desire.
“We understand that people looking for a small-dollar loan are often coming to us because they’ve exhausted other resources, so we really, really go out of our way to be that friendly lending partner,” Bishop said. “The biggest advantage we have is that we do everything we can to work with our customers. They like our friendly service. If they ever need a small dollar loan again, rather than kind of going back through the funnel, they come straight to us.”
Before it was cool to seek loans through the online marketplace, ExtraFunds has worked with customers to provide unique online opportunities, the business equivalent of an ugly girl without a prom date, forced to juggle her way through a variety of questionable suitors.
As the installment loan world has shifted into a more modernized and online space, ExtraFunds now welcomes droves of people with open arms, the business equivalent of a formerly ugly, now stunning model who posts all of her pictures to Instagram and then basks in the glow of the comment section.
“It seemed like things were going online, including all different kinds of loan opportunities — short-term credit or installment loans, mortgage loans, consolidation credit, education financing,” Bishop said. “So early on, we saw the opportunity of potentially taking advantage of a trend in that direction. One of the main reasons someone would go online, they don’t have time to go through the process of going to a bank and presenting their case. And they really don’t need that much money, maybe just $500 to help them get back on track. So why deal with ExtraFunds? Convenience, security, privacy.”
With the marketplace growing exponentially, ExtraFunds plans to grow along with it. Already home to roughly 25 call center employees, Bishop is looking to increase operations. To do this, ExtraFunds is raising money through Crowdfunder — $765,000 has already been committed, with the round closing in July.
“Traditionally, we have gone the VC route and raised capital very successfully that way,” Bishop said. “We’ve been able to offer great returns to investors. So we’re really excited about the opportunity to do so with crowdfunding and take advantage of a lot of investors, rather than just a dozen or so. Because we think that as we grow, the volume lead will be there.”
If you think that ExtraFund’s growth stops with this raise, you’re wrong. When opportunity knocks, you listen. Because as Eminem taught us, opportunity comes once in a lifetime.
“I anticipate us doing this probably 3-4 times at that same range,” Bishop said. “We certainly could have need for 5-10 million dollars over the next 24 months for growth capital and growing the loan portfolios that we manage.”
We are excited to announce our new membership with the Cache Chamber of Commerce. We look forward to meeting other members and to what we believe will be a long and prosperous relationship.
You can see our buildings in the above video 3 minutes and 43 seconds in. We are proud to be a Logan-based company and to be serving thousands of customers across the country who have consumer financial needs.
We are also excited to grow our business in Cache Valley all while continuing to restore the beauty of our late 19th century buildings on historic downtown Main Street.
Many people are now wondering if Marketplace Lending is here to stay. The response from this year’s LendIt conference in New York was a resounding YES! Here’s a little taste from the recent event:
Nobody is a bigger champion of the emerging online lending industry than venture capitalist Charles Moldow.
A general partner at Silicon Valley firm Foundation Capital, Moldow was an early backer of LendingClub and OnDeck Capital, which both held initial public offerings in December. And last year, he published a white paper that’s been widely cited on the trillion-dollar market opportunity in what he termed marketplace lending.
So when an entrepreneur who wants to crack the fast-growing online debt market gets a dinner invite from Moldow, attendance is a no-brainer—especially when many of the industry’s biggest names will also be at the table.
To read the rest of the article you can go here.
According to CNBC, investor funds are literally pouring into our sector! Now is a good time to invest and ExtraFunds is well poised as a strong young player in the industry.
If you’re like most people, you second guess your career choice. I remember going through periods of my own life, where I would constantly research new career options. Here are a few interesting facts from an article by blogger Anna Vital of Funders and Founders. You can read the entire article here:
People Sleep 1/3 of Their Lives
The one activity people spend the most time on is sleep. If you live 78 years, 28.3 of those you will be asleep. So what? If your startup finds a way to improve sleep, your customers will be using your product every day, for 1/3 of their lives. If you improve the quality of their sleep, help them get rid of nightmares, you can say you have served humanity well.
People Spend 6 Years of Life Unhappily- Doing chores.
Who likes doing chores? A startup that mops your floor, washes the dishes, etc. could save you 6 years of life.
People Spend 9 Years Entertaining Themselves.
If people play almost as much as they work even though they are getting paid for work but not for play, there is something that can be done to make work more fun. This starts with education – a person who loves their job often finds it as satisfying as playing. But not everyone does. Far from that. It does not have to be this way if you help more people find the job that they would really like.
Almost Half of World Population Don’t Have a Job
The largest single group of people, kids, are too young to work. How will our world change once these kids grow up in a few years and add almost two billion brains to the global workforce? Will the price of labor go down? Will they be doing new jobs that don’t exist yet? Or will they even have any skills that would make them employable?
Every Fifth Human is Still Farming
Having a job was not always the default way to make money. 100 years ago farming was the default thing to do in life. Today every fifth human is still doing it. It makes sense because someone does need to grow the food we eat. But as more robots drive agricultural growth, humans could not and would not want to compete. So what will they do?
Almost Half a Billion Entrepreneurs
If having a job is the current default way to make money, you have got to ask what will be the next? One group of humans stands out – the 400 million entrepreneurs. These are anyone from a fruit stand entrepreneur to a founder of a bank. One thing they have in common is that they did not look for a job, they created one for themselves. This is likely the future way of living. Most people who can create a job for themselves will, and others will look for one. Of course the world will not look like 10 billion one-person startups, but the ratio we see now will change.
What Can You Do Today?
These images are a snapshot of the world today. It will not stay this way. So if you are learning something, getting a degree, building a startup, or getting a job, a good question to ask is: Am I learning and building for tomorrow’s world or for today’s?
Thanks for the great info-graphics and the great article Anna!
I came across a very cool website that calculates how rich you are compared to others in the world based on your income. President Obama for example, if you take his presidential salary alone of $400,000 puts him in the top .02% as the 1.3rd million richest man on earth. If you take Bill Clinton who made $17M in 2012 in speaking engagements alone, he is in the top .0001% and is richer than all but 4,228 people in the entire world. Wow! Public service may be the way to go after all!
Even U.S. public school teachers just starting out at $30,000 per year fare pretty well. They are in the top 1.23% with roughly 73,000,000 people of the world’s population of 7 billion.
It’s interesting how wealth is a matter perspective. Most of us do not have an income problem as much as an outcome problem. Especially in America, where convenience and opportunity usually abound. But, good people still find themselves more often than not, confronting financial concerns.
Did you know that 76% of the U.S. population lives from paycheck to paycheck? A recent article on betterment.com shows how even the “rich” live from check to check in our country.
Their research concludes that spending more money even leads to less happiness each year.
I have to agree. So often people believe the answer to their financial problems is simply “more money.” But, in my view the answer is not more money, the answer is better money management. Too many of us spend money we simply don’t have. Or have, but that we should set aside for a rainy day. Instead when we have money, we spend it.
This crisis certainly keeps our lending partners in business, but as a loan servicing company our goal is to help customers use financial products wisely. Everyone needs credit at some point.
Credit is not necessarily bad. In fact, it’s interesting that no one seems to care when a person is overcharged on a luxury item such as a car, a purse, or a watch. No one will be suing Rolex anytime soon for charging a person who can’t afford it or who has bad credit, $25,000 for a watch that only cost them say, $500 to make.
No one will be suing 7-11 for charging too much for milk or soda for that matter, nor will anyone punish you for making shopping decisions out of convenience.
All of us as consumers make decisions on a daily basis that we can each evaluate to decide what changes we may want to make.
Life is after all, a balance between satisfying our needs and our wants. My recommendation is for people to try to better live within their means, myself included. Use debt and credit to try to get ahead. Set money aside when you can for a rainy day. Avoid spending everything and learn how to make investments so that you too earn interest.
I also recommend trying to keep things in perspective. For most of us, even on our worst financial days, we are still very “wealthy.” Make changes today, little by little, that will help gradually improve your financial situation.
If you do in fact, need more money, invest in yourself if you can. Go back to school. Start a small business on the side. Team up with family members, find a support group. And remember it’s just money.
At ExtraFunds, we aim to continue providing leadership in financial wellness education. Thanks for your interest and support!
I was first exposed to online lending in 2008. It led to an interest in raising capital and eventually managing a loan portfolio on behalf of a lending partner.
Since 2008, a lot has changed in the industry. Online lending has become more mainstream and more secure. Regulators have played an important role in making sure lead companies, lenders, and servicing companies adhere to industry best practices. Players such as Lending Club have emerged.
We are thrilled to be a part of an exciting and growing industry. Our niche at ExtraFunds is that we not only know how to make and service loans for our lending partners, but we do so with great respect and courtesy. With our lending partners, we have firmly decided to never sell our customers’ debt. We believe in never reporting negative payment history to credit bureaus. We never secure debt or garnish wages or harass customers.
Simply put, our niche is that we really believe in trying to help our customers. For some, this may be hard to believe, since online installment lending is sometimes viewed controversially and is associated with high interest. But, most people for and against such loans, all seem to continue to agree — there is a need and a demand for the product.
You may be surprised to know that we agree that installment loans are often too expensive. This is why we recommend that our customers always seek alternative, cheaper forms of credit first, IF they have access.
One reason installment loans cost more is because it costs an average of $105 for us to find a new customer. Our first loans are usually $300 or less. A certain percentage of our customers default on their loans at various points throughout their repayment payment cycle. All of this unfortunately increases our overall costs.
Our goal is to continue to lower the costs of loan products in order to lower the costs to borrowers. We will work with our lending partners until we are successful in this goal!
We are also committed to continuing to assist borrowers in any way we can to help them graduate to better financial products at lower interest rates.
If you’re new to ExtraFunds, thanks for reading and for considering a relationship with us whether as a borrower or as an investor. Either way, we are committed to your success!