The Dog Ate My Wallet

The Dog Ate My Wallet

Personal Finance in a World of Excuses


The Dog Ate My Wallet is no more

I realized a few months ago that one of the reasons I was not writing as much as I would have liked to was that a lot of the things I wanted to write about did not fit into the theme of one of my existing blogs – personal finances, pets, writing. Instead of starting a fourth blog to try and keep up with, I decided to consolidate everything into one general use blog.

If you miss The Dog Ate My Wallet, you can find what I am writing now over at Dear Alien Anthropologists.


A Housing Dilemma


I have a housing dilemma.

We learned in January that our long term (8 years) tenant in our out of state rental property will be moving. She’s been a fabulous tenant, and we are sad to see her go. While we have no problems being landlords, we don’t honestly want to be out of state landlords to a tenant we do not know, especially now that we do not have a built in property manager in my mom (since she has also left the area). So, we are selling the condo.

We own the condo free and clear, which means we should clear $50-60k after realtor fees and taxes. We are looking at taking that money and buying a nicer home where we are. We would prefer not to have to sell the house we are living in before buying a new home. We may choose to rent out the current house, but even if we do not, it will be just that much easier to get it ready for sale and to show it if we’re not currently living in it.

Talking to our mortgage guy, we have two options. One is more complex and would leave me feeling less financially secure, but puts our buying power at $100k more than the simpler option.
We also have three goals for moving. In order of priority, they are:
1) Better schools for our daughter/future children
2) A shorter commute for me
3) A bigger/nicer house

The bigger/nicer house option is lowest on the priority list because we could take that same $50-60k, and make some major renovations to our current home.

Our ideal area has great schools and a very short commute for me. However, for the most part, it would require us to go with the more complex, less financially secure option for the mortgage. There are some houses in the area we are looking at that meet our requirements and are in the price range for the simpler mortgage, but, while they may be bigger than our current house (as in have a second bathroom), they are not nicer. (These houses also sell within a week of coming on the market. Sadly, I am not exaggerating. Average time on market in the Seattle area right now is 17 days, and this include neighborhoods like mine, where houses are sitting on the market for months.)

If we went with one of those houses- ideal neighborhood, simple mortgage price range –the plan would be to then do the basic cleanup needed on our current house, sell it, and immediately use the $30k or so we’d get from that to do renovations on the new house. That puts us with the double inconvenience of going through escrow (twice) and renovations.
That has us talking seriously about staying put and just doing the renovations needed for our house. While no renovations pay for themselves completely, some of them (like adding a 4th bedroom and 2nd bathroom) would certainly add to the value of our home.

731326_0A house I LOVE has come on the market. This house has been on and off the market since 2007, though never sold. At this point, it seems to come on the market for a few months, not sell, and then go off. I am not certain why (there have been a couple of inspections, so there might be something really wrong with it), or it might just be that the owners are not willing to lower their price.

We first saw the house as an open house, probably in 2007 or 2008, when we were first considering moving my late MIL in with us. I fell in love with the house then. And now, it is back on the market, in the simple mortgage price range. Fate?

And here is my dilemma. This house is only half a mile from our current home. Not only would our daughter not move to a better school district, she would even be on the exact same bus she takes now, just a different stop. My commute would, obviously, not improve. That means that of our 3 reasons for moving, we would only be hitting one of them.

Though it would be hitting that reason big time. The house is considerably bigger (5bd/3.5ba vs 3bd/1ba) than our current home and is much nicer. Because it is the simpler mortgage, without a need to instantly sink more money into renovations, it would make keeping our current house and turning it into a rental financially viable. And location wise, that would also be incredibly convenient, with C only being a half mile away for any property management that needed to be done.

But, and I keep coming back to this but, our daughter remains in a school that is rated a 2 (on a scale of 1-10) instead of moving to a school that’s rated an 8 or 9. Still, this would be true if we just renovated our current house.

We have an appointment to view the house later this week. Maybe we will see it now and not love it as much we did before. Maybe we will be able to find out why the sale has not gone through after a couple of inspections and realize we do not want to deal with that. Or maybe we will remain in love with the house, in love enough that we will really have to review our priorities for moving. It is a dilemma.


No Matter Who You Know, Your Resume MATTERS

We’re all familiar with the phrase “It’s not what you know, but who you know” when talking about job hunting. In many (maybe even most) cases, people get jobs based on knowing someone in the organization, having someone with influence speaking for them.
But a word of advice (at least when it comes to large organizations) – no matter who you know, your resume still matters. Do not neglect your resume. I recently made a hire, a hire based very much on a “who you know” situation, and yet, the candidate almost did not get the job because his resume could not make it out of our HR system.

Let me explain. My department had a position open. We had interviewed two people and were not super excited about either. College norms say we need to hire at least three people, so we were looking for a third person to interview. Enter my candidate.
He was a former student employee in our department. He was interested in the position and qualified. However, our recruitment at the time was limited to current employees only. Based on a (unanimous) staff vote, we opened the position to non-employees specifically so this candidate could apply.
Then, due to some staff vacations and tight timelines, we set up an interview for this candidate the day the position officially closed, without ever having gotten his resume through our automated hiring system. (We only get resumes on the day the position closes.)
We had the interview. I will be honest. It was not a great interview, but it also was not awful. It certainly was not worse than the previous interviews we had done for the same position. And I was willing to give this candidate some leeway as this will be his first post college graduation position. He has only ever been a student employee or intern, so he does not have a lot of practice at interviewing.
After the interview, the hiring team sat down to make our final decision. We chose the candidate, based, honestly, more on the excitement of the rest of the staff to bringing this person on board than the actual interview. (Please note, I am not saying the candidate is not qualified or cannot do the work. He is, and I believe he can. But if the rest of the staff had not been excited about working with him again, his interview was not good enough for me to have been excited about making the job offer.)
I contacted him and got his references- two former employees of my department (including my predecessor) who were both very complimentary and thought very highly of the candidate.

Then, the resumes got pushed through our HR system. His was not among them. I contacted my HR person, saying, I know this person applied, why don’t I have his resume.
My HR person said he had gone through all the resumes and sent me anyone with any scheduling or academic experience at all. I responded that based on academic experience, I knew this person qualified because he had worked for our department for two years as a student. My HR went back and reviewed his resume again.
And still, based on what was submitted into our system and the fact that this was a union position, he could not forward the candidate on to me, because the experience was just not reflected in the resume.
This left me with a candidate my staff very much wanted to have hired, that I absolutely could not hire, because he could not make it past our HR screens.

Again, this candidate was lucky. Because my staff (and, I should add, faculty) all liked the candidate, I went back to my HR representative to ask what we could do. And my HR representative, knowing that our college has a bias toward employing our own graduates, agreed to give my candidate a second chance.
He would have the opportunity to go back into our hiring system and update his resume and the rep would then re-review it- all this despite the fact that the position was now closed. My HR rep even gave me some general guidelines about what needed to make it on the resume.
I then contacted the candidate and told him, in general terms, what the situation was. I explained that I knew he had the needed experience from our conversations and from his previous job duties with the department. I made very specific recommendations for what needed to go in the resume.

In the end, the candidate updated his resume. My HR rep approved the new resume, and I was able to make the hire.

Did who this candidate knew make a difference? Absolutely. In every step of the process, from being even being able to apply to the job all the way to the moment I was able to officially make an offer. He never would have gotten anywhere without WHO he knew.
At the same time, his resume MATTERED. Mattered to the point that without people really willing to go to bat for him, he would not have gotten the job. Without knowing people in the department, I would never have even known he had applied.


What is Your Time Worth? Picking a Commuting Option

When I last worked at the University, I heard how much the parking pass was for my building (which wasn’t part of the University parking systems) and simply determined I would take the bus.

At first I took the light rail into downtown. There’s a light rail station just a couple of minutes from my house, and during commute hours, trains run every eight minutes. I then caught an express bus from downtown to the University district and walked a couple of blocks to work. I did the reverse in the evening. On this route, my commute regularly took 90-100 minutes.

Then, I discovered an express bus that I could catch and take the whole way. I would get on in the morning at a park and ride about 7 miles south of my house. (I work north.) Based on the scheduled commute time, this route would take me only about 75-85 minutes each way, and I got to stay in one place, reading my book.

There ended up being some problems, like the bus running routinely late in the mornings, so I started to show up in time to catch an earlier bus, just to make sure I got to work on time. And on nights when traffic was bad, it could take me over 2 hours to get home, partly because of those 7 miles past my house the bus had to go on the freeway, and that I then had to drive back.


Now, I am back at the University. For my first week, I drove every day, and paid the $15 in parking. I knew that $15/day was not sustainable, but for the first week, getting back into the swing of things, it was worth it. And I started timing my commute.

Driving, my commute has been about 50 minutes each way.

On the bus or bus/train, I was never home before 6pm. The first week, I was home before 6pm every night but one- when there was an accident on the freeway, with most of the backup happening before the carpool lanes even start. (So the bus would have been just as caught in traffic as I was.) There was about 15 minutes from the time the carpool lanes started to when I passed the accident, so the bus only would have saved me some of that 15 minutes. (And I was still home by 6:15.) In fact, even with the accident, even with it taking me almost 50 minutes just to get to the carpool lanes, I was still home in 75 minutes- the shortest of the commute times I had on the bus.


This means that driving saves me roughly 1 hour every day, and gives me a flexibility that just isn’t possible with public transportation.


So, I ran the numbers for University transportation options.


Bus Passes are $44/month ($528/yr)


A single occupancy vehicle parking pass is $141/month ($1,692/yr). It INCLUDES the bus pass, which means I can still take the train to events downtown or even take public transportation to work, for no additional costs, when that option makes the most sense. So we’re looking at a difference of $97/month or $1,164/year for just the parking pass part.


A motorcycle parking pass is $47/month. It also INCLUDES the bus pass. So in that case, it would be $3/month or $36/year.

The difference between the car pass and the motorcycle pass is $94/month or $1,128/year.


The best deal is obviously a motorcycle pass. Sadly, my dream motorcycle (Can-Am Spyder) is about $11,500 used. So, it would take roughly 10 years of motorcycle pass vs car pass to pay for itself.


However, I could get a used, highway capable scooter for around $2,000-3,000, which would pay for itself in 2-3 years.

Either way, I’d also have to take a motorcycle riding course, and we would have another vehicle to insure. Plus, it would essentially be a “me only” vehicle, with no real ability to transport anyone else.


Going back to the car parking pass, assuming there are 20 working days a month, driving would save me 20 hours a month. At the cost of $97/month, that works out to $4.85/hr. On the job, I make about $41.50/hr.

Driving does mean gas and upkeep costs, but C is no longer driving 50 miles south every day for class, so I think our car costs may still actually go down from what they were last year. And there are no upfront costs or increased insurance premiums.


The question is, what is my non-working time worth?


I purchased the parking pass.


Deciding What to Wear

With my new job comes many new challenges. One I was not quite expecting was the challenge of deciding what to wear. I am not talking about not liking what I have in my closet or having so many things I like that I am paralyzed by choice (though I do have more things than I probably need and should work on paring myself back down). No, I have the new challenge of setting my own dress code.

Here at the University, each department is pretty much free to set their own dress code. When I worked for the School of Medicine, one of the directors nicely let me know that, despite working alongside people who were dressed in jeans and flip flops, I would do best to err on the business side of business casual. That was because I was part of the Dean’s Office, and the Dean’s Office was overall more formal.

Now, I am in an actual academic department. To go along with that, I am in an engineering department. But it’s a hippie engineering department. My boss, our department Chair, wears jeans and short sleeved, button down, print shirts (think Hawaiian shirts, but the prints aren’t floral) every day.

Every other member of the staff wears jeans and a business casual style top- at least most of the time. (On Friday I saw a couple t-shirts and sweatshirts.) This includes the four staff that report to me.

Let me be clear that I have no intention of trying to change the office dress code. A casual environment is certainly one of the perks of working for an engineering department, and I have no doubt the staff value that. However, I am not a member of the staff.

I am the Administrator, the business manager, the non-academic head of the department. And I am not certain that casual is the right dress code for me, at least not most of the time. In many senses, I am the professional image of the department.

This means that for the most part, I am going to aim for business casual dress that often may err on the side of business. Part of this is because that’s the work wardrobe I have, but part is also because that’s how I want to present myself and represent the department.

I am going to allow myself casual Fridays. My Chair isn’t in the office on Fridays. (He’s off doing research.) We do not have any classes on Fridays, so there are fewer students and faculty around. So on Fridays, I will allow myself nice jeans and a business casual top.

But most of the week, if you want to find me, I’ll be the person in slacks or a skirt, with a blouse and a jacket, or maybe a nice sweater.


Interviewing Tips

Congratulations! You have landed an interview, an in-person, go and meet people face to face interview. This is exciting! It can also be incredibly nerve wracking. Below are a list of tips that can help you make it through the process. It is not exhaustive, as that would be a way longer post than I want to write, let alone what anyone wants to read. But hopefully these will help.


If they give you a choice of days or times, pick the one that works best for you. I know of no studies that say it’s better to be the first or last or whatever person interviewed (and you really have no idea if other people were offered other times, anyway), so don’t worry about that. Pick the time that honestly works best for you, because your chances of getting the job are always better if you’re not running late/stressed/worried about how long it will take.


Know how you’re going to get there and how long it will take. Think about the time of day you’ll be traveling. Print out your directions the night before.  Allow extra time for getting lost, finding parking, or that random accident on the freeway.


Know what you are wearing. Choose your outfit carefully the night before, allowing for time to do any last minute laundering needed. If it’s the first time you would wear that outfit, try it on, make sure it looks the way you want it to.


Dress for the company. I don’t care if you are applying for a job as a mail clerk, if the office dress code is business professional, show up in a suit and tie. At the same time, if you’re applying for the COO position at an internet start-up founded by an early 20s college drop-out, you may want to lean more toward the business casual side of things.


Dress for the job. Most companies now a days are business casual. If you’re applying for an hourly position, you should be able to interview in business casual dress (though don’t lean too heavily on the casual side). However, if you’re applying for a salaried position, lean more toward business. The higher level the position, the further on the business side you should be.

Sometimes how you dress should be based on the division of the organization you are applying to. Sales guys will typically dress differently than IT staff. An example from my own life, people at the School of Medicine dress differently than those in the College of Engineering, despite both being part of the same University.


Be polite and friendly to all support staff (receptionists, security guards, admins). Being rude to any of these people can easily cost you the job, no matter how much you hit it off with the person actually interviewing you.


Make intelligent eye contact. If you are interviewing with only one person, don’t make them feel like you are staring. Take time to blink, or glance around your surroundings. If you are interviewing with a panel, focus most of your eye contact on the person who asked the question, but make sure to look around the room, at all members of the panel, at least once per question. (Their body language will be able to tell you a lot.)


Pay attention to your body language. Try not to fidget, but if you’re a fidget-er, try to do so intelligently – lean forward when being asked a question, lean back when considering your answer, sit up when giving your answer. Try not to cross your arms (this is the toughest thing for me), as it makes you seem closed off. Doodle or take pretend notes to give your hands/arms something to do that isn’t being crossed in front of you.


Take actual notes. Many questions, especially in “behavioral” interviews have multiple parts. Don’t expect to be able to remember the 4th part after having answered the first 3. Jot them down, double check to make sure you have all the parts right in your notes before you start answering.

Notes can also help you keep your answers on point and make sure you don’t leave something out. I know a number of brilliant people who can tangent off anything. Jotting down a couple of quick notes before they start answering a question can help them stay on track.


Know your answers to standard interview questions. Know why you want to work for that company/in that department. Have stories prepared regarding times when you had difficulty with a co-worker, what your greatest accomplishments were, a time when you felt you failed (and what you learned from it).


Do NOT try to game the questions. If you are asked for what you think your biggest weakness is, don’t try to present your weakness as a strength. No one is perfect. Hiring managers know this. They need staff members who are aware of their own weaknesses, and they need to be aware of those weaknesses, as well.  Now, no one wants to talk about what they are bad at in an interview, I get that, but self-awareness goes a long way. Talk honestly about your weaknesses, then follow that up with the skills you have learned to mitigate those weaknesses. That shows the hiring manager you’re honest about your abilities and also able to be proactive.


Take a moment before answering questions. Even if it is a question you have answered a million times or have prepared the perfect answer for, don’t start talking the second the last syllable has left the interviewer’s mouth. Take a breath, show that you’re considering the question, and then try to speak slowly and evenly.


Know what questions you want to ask. And yes, you MUST ask questions when given the chance. You can have a few basic ones of your own prepared. I always like to ask what the interviewer hopes to the person in the position they are hiring for will accomplish in the first six months to a year. If a lot of the interview has hinged on what the last person did (and you get the feeling that maybe it wasn’t enough) change the question to say “forgetting about what has been done in the past, in your ideal world, what would this position do”. Another favorite of mine is to ask people what their favorite thing about working for that company (or in that department) is.


Ask about timelines and next steps. If at all possible, never leave an interview not knowing what should be happening next and when it should be happening. Sometimes those answers will be vague, but at least you have an idea. Knowing timelines gives you more power, especially if you are interviewing for multiple positions.


Follow up with a thank you note. Yes, a thank you note. Alright, if after the interview you realize you really don’t want the job, you can skip the thank you note. But otherwise, take the time to write a few words in an email to the folks you interviewed with. Say you enjoyed meeting them and learning more about the position/department/company. Mention one thing in particular that you are interested in/excited about. Tell them you hope to be hearing from them again about [next step] or in [timeline]. And always end it by saying you are available for any additional questions should they have any. Make sure your contact information is in that thank you note.


First Day at the New Job

I had meant for their to be a post up today with interviewing tips. However, the weekend ended up being busier, with more important things than blog posts to think about, than originally planned. AND today is my first day at the new job.

So please bear with me through jut a little bit more sporadic posting, and hopefully we’ll be back on schedule soon.


Phone Interview Tips


Phone interviews have been pretty common in my job search history, but I have spoken with people for whom they are not ordinary, and others who get extra nervous about them. So I put together this set of quick tips for shining through the phone interview stage.

In my experience, there are two kinds of phone interviews. The first I refer to as a phone screening. It is conducted by HR, not the hiring manager. HR asks some standard questions and provides a sheet to the hiring manager. In my old company, they did not give an opinion, just wrote down the answers and left it for the hiring manager/their helper to make the decision.

One of the important things to remember for these cases is that the person who screens the candidate is not actually involved in the hiring process, so the fact that it may seem to go well had no real impact on the decision to move the candidate to the next level.

A phone interview is actually conducted with the hiring manager or members of the team doing the hiring. It will also likely have some standard questions, but they will be more along the lines of behavioral interviewing, much like a first, in person interview would.

In either case, the purpose of a phone interview is to narrow down candidates. Right now, a single position often receives literally hundreds of applicants. And even if only 25% are actually qualified, no one has time to interview that many people in person. Phone interviews allow you to interview more people, give a chance to people who are maybe not quite “perfect” to impress you on the phone. They are a standard first step in the interview process.

So here are my tips for making it past the phone screen and the phone interview.

Phone screenings (unscheduled, HR person calls and says “do you have time to talk”):
Do some research on every organization before you apply or immediately after. Know at that time the answer to the questions “Why do you want to work here?” “What about this position interests you?” “What do you know about our company/organization?”
If you figure that out at the time you apply, when you are called randomly while at the dog park, you can answer those questions with some confidence.

Phone interviews (scheduled, w/ hiring manager):
-Make sure you are in a comfortable place where you won’t be fidgeting.
-Limit distractions.
-If possible, have your computer in front of you.
-Have the job posting up.
-Have the company website up.
-As people, we are very used to visual clues and body language, and you don’t have that over the phone. Because that can be very disconcerting, you might try closing your eyes when not actually looking at something in front of you.
-Remember that the person you are talking to is trying to write or type notes as you speak. Try to speak slowly and calmly.
-Do NOT be afraid of silence on the other end. Sometimes they are just trying to catch up.
-Try not to use too many acronyms or jargon, especially if you’re talking to an HR person- they don’t know what that means, and often won’t translate what you say exactly right. So try to keep it simple.
-Be confident in yourself.
-If possible, have a sleeping Beagle cuddled next to you (or something else that helps you relax)


Job Hunting Tips

Now that I once again have a job, a friend asked me to put together some tips based on my 9 months (11 months, if you want to go back to last May) of recent job searching. Here’s the list of tips for job hunting. Come back on Friday for a list of interviewing tips.

Tailor your resume to the job. Use phrasing or industry words from the job posting in your bullet points. Almost every company uses an applicant tracking system that reviews all resumes before a person ever sees them. The algorithms in that software search for matching points between the job posting and the resume and then spits out those that have a certain threshold match. It doesn’t matter how perfect you are for the job, if the computer can’t see the connection, no human is ever going to have a chance to.

PROOFREAD YOUR RESUME. Then proofread it again. Send it to multiple friends and ask them for suggestions. Be open to making changes on format, changing wording, or making statements stronger, but most importantly, look for spelling mistakes and consistency. And also know that you are going to miss something. (I had typos that no one caught on my resume for months- verb tense agreement, inconsistency in capitalization of an industry term, etc.) So continually proofread your resume. And when you find a mistake, make sure to fix it on all the versions of your resume that you have.

Your cover letter should be short, just a couple of paragraphs, really, nothing longer than half a page, and can be quite generic. There are people who are advocating for getting rid of the cover letter altogether, and some applicant tracking systems that don’t even ask for them. So don’t panic if you forget to add, or don’t have a place to put a cover letter. (caveat: If the job posting asks for a one page letter detailing how you meet the job requirements, actually write that.)
However, this does not just mean you should have one and only one cover letter. If you are open to a variety of types of job, you should have different cover letters that address each type of job specifically. In some cases, you may want a cover letter that addresses a specific company (say if you were previously employed there), or at least ones that address specific industries, especially if you have had experience in multiple industries.

Do your research on the company BEFORE you apply. This way, you know you are interested in the job and the company. Also, if you get a phone call when you’re out and about (like at the dog park) and the HR person asks if you have a few moments, you are prepared to answer standard phone screening questions like “why are you interested in this job/this company?”

Don’t waste your time applying for a position you wouldn’t want or at a company you wouldn’t want to work for. My big one was that I wouldn’t apply at Catholic healthcare organizations, but I also avoided banking, cell phone companies, and janitorial firms (I HATE cleaning).

Be open to possibilities. Your skill set can probably be applied in lots of different kinds of jobs, so if the job title sounds interesting, look at the posting. If you think you can do the job, even if the title is way off from your previous titles, apply anyway. Just make sure to tailor your resume to highlight your experience that is similar to what this job is asking for. The job titles of the last 5 jobs I interviewed for were: Business Systems Analyst, Business Process Analyst, Executive Assistant, Director of Operations, and Administrator.

Keep a log of jobs you have applied to. You have to do this when you are on unemployment, but even if you aren’t, it’s still a good idea. For one, it prevents you from applying to the same job twice with an identical resume (if you have updated your resume, go ahead and apply a second time). It also gives you a good idea of how long it takes between a company posting a job and them moving forward. If it’s a job with a closing date, make a note of that on your log, so you have an idea of when you might be contacted. If you also use the log to track call backs and interviews, you’ll get a good feedback loop for if your current resume is working, or if you need to revamp it.

TELL YOUR FRIENDS. Most people still get jobs based on who they know, not what they know. I am not saying unqualified people get hired, but a resume that doesn’t get pushed through by the applicant tracking system can still be forced through the system if the hiring manager knows to ask for it. A resume can get moved to the top of a pile because of the recommendation of someone who already works there.
To go along with this, though, do NOT ask your friends to speak to things they can’t speak to. If you have never worked with them, don’t ask them to be a professional reference, don’t ask them to speak about your work skills. I would ask them to say- hey, she’s good people, or we’ve played games together and she’s a great team player, has some really out of the box problem solving skills, etc. I also always tell them that if they aren’t comfortable doing any of that, it’s okay. Some people have been really burned by recommending someone in the past and just don’t want to do it again, or they may know enough about the job to actually think it wouldn’t be a good fit for you. So always give them an out.

Network. This is more than telling your friends. Find professional groups on LinkedIn. Go to professional society meetings. Talk to people. Be generous in sharing your knowledge with those you meet; help them if you can. Show yourself to be knowledgeable and helpful to people in your industry or to other professionals you meet. People remember those things, and will therefore think of you when they hear about jobs through their networks.

Ask for informational interviews. If there is an organization whose work you are really interested in, a place you would love to work, etc., reach out to them. Contact HR and ask for an informational interview. Tell them you’ve looked at their jobs, and it doesn’t seem like there’s something that is a good fit for you right now, but you love what they do and would like to talk to them. This creates a relationship. It makes you come to the top of a recruiter’s mind when a new job comes available. It associates your name and resume with someone who is interested enough in their company to be proactive. And trust me, recruiters and hiring managers like proactive.

Find a support group. I very much did NOT want to share all of my frustrations about the job hunt on FaceBook because my family is there. My parents did not need to see everything that was going on, nor did I want to hear platitudes from family and friends most of the time. I am very lucky to be involved on a personal finance message board where I was able to vent my frustrations and seek advice. I had great support, but also people who were willing to ask me questions about items that might have been harming me, or give me advice on my communication style. C and my family are great, and I had plenty of support from them, but being able to share the downs of the situation without worrying about whether my worries would make them worry was invaluable.


Peer to Peer Lending – 2014 Annual Prosper Report


It’s time for my annual Prosper check in. Like many things in my life, this year was not as good a year when it came to our peer to peer lending. Unlike many other things in my life, I can tell you exactly why- lack of diversity. When you only have 5-6 active loans and two of them default, even if they default at having paid at least 75% back, it makes a big impact. However, in order to get better diversity, I would need to invest more money into the process, and this year, at least, that has not been an option.

I guess I can feel good about the fact that we never felt the need to take money out of the Prosper account this year, unlike when C lost his job. At the same time, we had $3,000 invested back in 2009 and now only have a little over $200. Our available balances to be transferred out were never big enough that it would have mattered.


Account Total Overall Rate of Return One Year Rate of Return Two Year Rate of Return Three Year Rate of Return


$  135.00



$  172.50 (9.5%)



$  226.00 (7.6%) 31.0%



$  206.17 (8.4%) (8.8%) 19.5%



This year, our two year returns seem a bit more sustainable, and our three year returns are nice. We did have a loss over the last year, but as I said, that doesn’t take a whole lot when you have as little invested as we do.

And sometimes, it helps to celebrate successes as well as losses. While we did have two more loans charged off this year, we also had one paid in full. And enough money from interest in order to invest in two more loans.

Year Charge Offs Paid In Full Active Loans
2011 26 28 3
2012 26 28 5
2013 26 29 6
2014 28 30 5

The one thing I CAN do to help my diversity is to start checking in more often (now I remember to check the Prosper account maybe one or two times a year besides when I do this report) and invest smaller amounts in more loans. For example, the last loan I invested in, I invested $70. You can invest as little as $25, so I might be better targeting $25 as the amount I invest in any loan. Because I would then have more loans, with less invested in each loan, I would lessen the risk I face from any one loan being charged off.

The key is, then, to remember that I have come up with this strategy. I say that because my strategy in the past was to stick to B and HR loans, and especially avoid the D rated loans, because my own numbers have shown those to have the greatest risk. And yet, that $70 I recently invested- D rated loan.

Original Loan Amount Interest Rate Amount Paid Prosper Credit Rating Term Ends
$    70.00 20.85% $           - D Sep-19
$    25.00 13.35% $       5.10 B Dec-18
$    75.00 15.20% $    21.28 B Sep-18
$    30.00 30.77% $    24.69 HR Jan-16
$    40.00 17.45% $    30.94 B Feb-17
$  240.00 19.52% $    82.01


(Remember, don’t try to make the numbers add up. Some money that has come in has been reinvested.)

Last year at this time, I had $275 invested at a greater than 22% interest rate. This year, I am down $35 and a few percentage points. I am mostly okay with that because I have chosen to invest in a number of the B rated loans, which don’t have the highest pay offs, but have traditionally been my safest investments. And since I took a loss last year, having a slightly less risky portfolio this year feels okay.

The other thing I need to start paying more attention to is the term of the loans. Right now, I only have one 3 year loan. The rest are 5 year loans. I think I may want to try and keep those numbers a little more even, or, if I lean a certain direction, to start leaning toward the 3 year term loans.


So that’s this year’s Prosper/Peer to Peer lending report. Not as rosy as last year’s but probably more realistic in terms of long term rates of return, and still, not too bad. I’ve spent $35 on a lot worse “investments” over the years.