Toro!! Don't dodge the bull market

Etoro got its start in 2007, and has since been called the "Zynga for men." Its goal is to make investing fun and social. The trading platform supports in commodity, currency, and index markets only.

There are two options to "socially investing" on Etoro: trading accounts and practice accounts.  A fringe benefit to having a trading account, weekly trading challenges where the winners receive reward bonuses(in cash).

Here's the kicker, Etoro offers not only in-house trading guides and tutorials on the website. It offers the ability to follow better performers, as well as ask more experienced traders for investment counsel.  The personal trading coaches (for beginners) and the personal account managers (for professionals) are also a nice touch in winning over potential users.

Etoro currently has 1.5million users, and employees spanning four different countries. There's nothing like making something as stressful and hair-pulling as investing, fun and social.

Become the banks, without all the economic meltdown "stuff"

Peer-to-peer lending is one potential investment opportunity that many financial professionals don't include in a client's portfolio. But why? Any client can lend their money at as much as 21.64% APR, where else can you get a definite 20% return on your initial investment?  There are some risks of default but it's very rare on this site considering that borrowers have to show, and update their credit scores.

The two major lending sites are Prosper and Lending Club. These two companies have taken advantage of the fact that banks have dried up most of the resources for consumers, and entrepreneurs to borrow money.  In a lot of cases, these two sites serve as a place where average consumers can borrow money at a lower interest rate to pay off other debts.  A refinance of sorts, but for consumer debt.  They each have a collections process in case an account becomes delinquent, and Lending Club even has an in-house "No-fee" IRA account option. 

For the investor, the sky is the limit with these two companies.  With both internal and external collections agencies on call, they are able to make sure that the principal is returned to the lender.  Where Prosper has claims of ROI's high as 16%, Lending Club offers risky loans as high as 20%.  Of course this wouldn't be a blog post of ours if there wasn't a way to creatively implement an investment portfolio at a no-cost basis. How would it sound if you can potential borrow at 6% from Lending Club, then turning around and lending that cash out at 20% (with only 0.7% going to processing). How does a 13.3% return sound with no cash coming out of your pockets? We can hear the cash registers ringing in your head.

As with all of our creative investment processes that we present to our clients, there is a caveat. We would not recommend going through with any kind of lending procedure without consulting a lawyer to make sure the "terms of use" are fully understood by all parties involved. Also, an accountant wouldn't hurt either. They would serve to help you realize what this could do to your taxes come 2011. You wouldn't want to make just enough cash to bump you up into the next bracket, while still having the same income.  Lastly, due diligence is always the key to your investment success. Vet all options and make sure that the lender you choose is reliable. Even with each company having a collections agency on tap, there's still a chance of delinquency

Want to learn more about creative investment opportunities? E-mail a consultant at info@cloud9-financial.com for any questions.

Leveraging A Credit Card

We recently came across an article from MyBankTracker, concerning four steps to avoid credit card debt and decided to post a small "blurb" on the subject.

At many different financial consulting/counseling companies they don't approve of debt leveraging, or using debt positively due to its enticing features.  The most notable enticing features are the ability to borrow more than you actually can pay back on a loan, and being able to spend up to your credit card limit when you have low funds in other accounts.  This is the wrong way to go about debt leveraging.

The right way to take advantage of leveraging debt, is to consider all cons along with the pros. Yes, you have pretty much free money. And if used effectively you can make that money go to work for you.  For example...say you take out a $1000 cash advance on your Bank of America credit card. Bank of America typically charges a 4% transaction fee on the principal withdrawn, and interest rates accrues daily from the time of withdrawal. If you can find investments that have a higher return than the interest rate(and the initial 4%), you will effectively be earning free money. If you pay back your advance within the allotted time period, you could possibly raise your credit score in the meantime.

In reality, investments like these don't occur very often. But when they do, we recommend sound due diligence before any investing decision is made. Above, we explained just one way to leverage the established line of credit on your cards. As long as you pay the lender back, the more creative the uses, the higher the reward.  With that statement comes a caveat: the higher the reward, the higher the risk.

Cloud 9 consultants would only recommend creating unproven leveraging techniques if you are experienced in the field of financing.

Recognizable Financial Start-ups

Today, we want to cover two fairly new start-ups that have the potential to positively impact your bank accounts.  At Cloud 9 Financial Consulting, we like to explore different options that may not be proven opportunities. Actually, the two companies that we are going to cover today were finalists in a disruptive competition (for start-ups) that happened in May. We think that they can help you in your goal of retiring, millionaires.

First up to the plate is, Plantly.  According to their website, "Plantly is a web application that creates a diversified investment plan for you." It allows even the most common Internet users create customizable solutions for your investing needs.  They start out by asking a few basic, but core foundation questions. Then proceed to finding investment vehicles that suit your answers. Plantly is originally meant for everyone and provides a sense of control even though they recommend investments by name.  Their site is currently in Beta, and is not wide-open to the public just yet.

On deck is the groundbreaking, Betterment.  Betterment, allows users a very non-confusing account, that accomplishes its goal of simplifying the investment process.  It aims to revolutionize the current model of the institutional "savings account."  To do this, the user can choose their asset allocation using a simple meter, and the back-end of the site purchases and sells securities according to your choice of allocation.  Unlike Plantly, Betterment is a FINRA certified brokerage of investment securities. Meaning, that it sells instruments (stocks, bonds, mutual funds, etc.) through its site; Plantly makes you link accounts to an external brokerage firm.  Our major con to Betterment is that users cannot personally choose what securities their portfolio consists of.  However, with the returns that Betterment are promising, we don't see it as a major problem. Betterment does its job as a substitute for your savings account.  With no hidden fees, no minimum balances, and the simplicity of its user interface, Betterment can easily blow-up into a multi-million dollar company.

We love the ideas behind both sites, and see potential for their future relevance as long as they hold true to their core values.

New Volunteer/Networking Community

So, unbeknownst to most of the world, Tech Crunch Disrupt went down last weekend. One of the events there is the hack-a-thon. The hack-a-thon brings together some of the country's best hackers to pull an all-nighter, sponsored by Red Bull.

Out of this hack-a-thon came a website, Iwannavolunteer.org. We at Cloud 9, found out about this website while looking for new hot start-ups exhibiting at TC Disrupt (gotta keep up with modern tech).
Iwannavolunteer.org was born of Patriot Media, LLC, headquartered in Avon, Connecticut. Here's their brief description,"Instantly find volunteer opportunities near you! Search today, this week, this month... Put your extra time to good use wherever you may be." The service is made for organizations, or individuals that can post localized volunteer opportunities; then volunteers log on to see what new ways they can serve their communities.

We at Cloud 9 always advocate community services and charitable giving. We believe that giving away money is just as important as saving and investing it. It helps others that aren't as privileged as we are, and it provides financial perspective about our own financial means. Check out this site, it's brand new and we support it. I Wanna Volunteer

Free credit score...numbers included

For awhile now we've heard friends, family, colleagues, coworkers, mentors, authors, singers, acto....okay you get the point.  Anyways, there's always a complaint that getting your credit report is not the same as getting your credit score. And when getting your actual score, companies hound you to sign up for their service to keep your credit score available. Well no more...

Earlier this week the Senate voted to pass the enormous financial reform and in it, an amendment that requires credit reports to include numerical credit scores.  Now you'll be able to see exactly what number that loan officer will see when you apply for a business loan.  Or the mortgage broker that chooses whether or not to refinance your house. Most importantly, you'll have an idea of how much to save before attempting to leverage equity with debt.

When applying for a loan you never really know what your actual credit score is, although you can usually "guesstimate" and get within the ball park.  Now individuals will be able to correctly assess how much cash, or liquid assets, you will need in order to match the criteria for large and small loans. Even with the advent of the credit crunch and the crackdown on passing out loans and credit cards like candy;  you can still get to the "sweet-spot" on a banks' "yes" list.

When, better stay politically correct...if the reform passes, the people serious about getting loans will simply have to look at their credit score, ask for a loan quote, and then focus on improving their personal financial statements.  When the credit score changes after 4-8 months, ask for another quote to see if you are now a more favorable "risk" to lending institutions.  We would imagine an individual could in fact shop around to other banks to see who will be the best at the age old game, "who can give me the lowest interest rate."

A new start-up referred to simply as, Bank Simple, is in the running to change the way you bank.  It wants to make the relationship between your money and the institution itself, less....web like.  Where you never really know where your money is that you deposited for completing online surveys; because it's currently being lent at a 12% premium to the return you're getting on it in the first place.  All of these shadowy ways that banks make money on consumer deposits and risk of defaults is part of the reason that our global economy is in the state it is currently in. But, Bank Simple is here to alleviate that problem with transparency and ease.

Bank Simple is unique because it motto is, "don't suck."  This alone is reason enough for me as an consumer to lend an ear to what they are attempting to accomplish.  They are shooting for a bank that doesn't charge you hidden fees, or have lengthy and unreasonable customer service policies, a bank that realizes that if it takes extreme care of it's customers, money will undoubtedly come streaming in. 

In taking care of the everyday human being, Bank Simple offers no overdaft fees, no complicated and hidden product costs. It gives you one card that allows you to pull from checking or savings, or make purchases on a credit basis.  And makes it easy for you to deposit checks by allowing you to simply take a picture of it with your phone.

Bank Simple