LOW INTEREST RATES ARE REALLY A TAX
All we hear about now is the national debt and what it is going to take for Republicans and Obama to come to an agreement so they can raise the debt ceiling. The biggest point of contention is whether to raise taxes on the “rich” and whether that will be part of any agreement. Republicans say “no” to raising taxes, especially now when it will hurt any chance of a jobs recovery. Democrats always think it is the right time to raise taxes so their desire to raise more money with higher taxes is nothing new from them.
One thing no one ever mentions is that low interest rates are REALLY A TAX on people who have money! Take my Dad for instance: he used to be able to supplement his Social Security check by the 5% or so interest he earned from his Treasury bills and certificates of deposit investments. What does he get now? Next to nothing with interest rates so low.
Where he once had a retirement income of around $30,000 (including his social security checks), he now has an income of about $15,000 (including SS). That’s is a 50% decline in income just taken away from him in the form of lower interest rates.
Politicians always want to tax the rich and I’m sure there are a lot of definitions about what qualifies a person as “rich”. With so many people without work these days, a rich person could be considered anyone with a job! But my Dad most certainly isn’t rich and he worries all the time whether he has enough money to make it to the end of his life, especially now that he is making almost nothing with the money he does have.
Without a doubt, low interest rates like we have now hurt anyone who is not in debt and has savings. Low rates are a tax on the rich and a whole lot of other people who aren’t rich too. We certainly don’t need any more taxes on top of that!
GET THE BEST INTEREST RATES THROUGH LENDING CLUB
WOW! Interest rates are super low right now and that means it is impossible to make much with interest income. Is there somewhere you can go online that will give you better rates than the banks will? There is and that place is Lending Club.
For anyone that has savings that they would like to put to work and get interest income from, peer to peer lending (also called social lending) is where they will probably get the highest rate. Money put away in a bank certificate of deposit or a money market account will most likely not get more than 1% and maybe much less. With Lending Club though, it is possible to get a much higher rate and maybe as much as over 9%. But beware, that high interest rate won’t come without risk.
The Internet is full of great ideas and Lending Club is one of them for people who need to borrow money and for people who have money to loan. Peer to peer lending mostly bypasses the middleman and lets you loan your money directly to someone who needs it. By cutting out the middleman (bank or lending institution) both the borrower and lender can get interest rates that are better for them.
Never before have you been able to loan money to virtual strangers (like banks do) and get interest rates that are comparable to what banks get. It is an innovative principle that is only possible through the Internet and Lending Club is one of the leaders in this industry.
There is risk with this and you will need to choose who you loan money to very carefully. The Lending Club platform will help you with this as it only allows people who have a 660 FICO score to sign up for loans. You will have a large number of people who need money to choose from and you can pick only the one(s) you feel comfortable with. You will be able to read why all the borrowers need money and from their stories, you can choose who you would like to help out.
As there is never any 100% guarantee that any loan will be repaid though, it is smart to only loan what you can afford to lose. Many people try to reduce that risk by lending money to lots people at the same time. For instance, rather than loan $1,000 to one person, they prefer to make lots of small loans that will reduce their risk and help out more people. Once you join Lending Club, you will have your own portfolio of loans and be able to see the progress of each one. It can be fun and financially rewarding as the video below shows.
Disclaimer: I have never loaned money or gotten loans through Lending Club.
