It's been far too long since I uploaded photos and videos. I'm happy to say that everything is up to date now:
Photos: http://www.flickr.com/photos/zhunzi/
Videos: http://youtube.com/profile_videos?user=zhunzi
In other news fronts, I'm nearly done with my an adwords experiment. It's not going as well as I liked, and I'll write more about that later. I've been reading a few books, trying to soak up as much information about time management and making money as possible.
The reading list:
Jim Cramer - Real Money (currently reading)
Robert Kiyosaki - Who Took My Money
Robert Kiyosaki - Choose to Be Rich
Tim Ferriss - The Four Hour Work Week
Thursday, May 29, 2008
Saturday, April 19, 2008
Prosper Arbitrage?
First off, if you haven't seen Prosper.com yet, you should. I get absolutely no commission for telling you that.
When I first saw prosper, I thought it was great. I deposited $50 and lent out my first partial loan at 19%. I'm still getting payments from the person, and they're on target to pay me back the complete $50+interest at around $1.80/mo. My only complaint about the company is that you get locked into these 3 year loans. There aren't any means for folks to take out various term lengths, so that you could essentially stack your money as you would in CD investments. The only way to have a constant flow of funds that can be available immediately is to just continually fund small portions of loans each month over the next 3 years. That's kind of annoying.
All that being said, I work for a large bank, and I know how they make money. One of the main ways is to lend money on one side, and convince folks to deposit money (usually by paying them interest) on the other side. They always lend for more than they pay. It's pure arbitrage. I also know that there is often very little margin in it for banks. They need LOTS of customers to make it work. So I got to thinking, could an individual make arbitrage work at Prosper? I searched around and sure enough, there are plenty of folks lending money at 5-6% in order to then lend that money out again at 15-20% to make a profit. Unfortunately, I'm not sure it's a great living. Look at the chart I created below based on $5000 being borrowed at 6%. You need to get a very high return (which is hard, because the higher the rate, the riskier the customer).
So if you could borrow at 6% and lend at 18% with no mishaps, you would make roughly $18.18/mo off a $5000 arbitrage after taxes. To be honest, managing between 10-100 loans (depending on how large your contributions per loan is) is not going to be worth $18.18 of your time. Not unless you say live in a seriously deprived location where that might buy you a royal lifestyle for the week. In which case, you probably don't have good credit, nor access to the internet. The numbers scale linerally, so if you wanted to aim for making $1818/mo you'd need to lend 100x the $5000 or $500,000 to be exact. Now that to me, looks like A LOT of risk!
My thoughts: Arbitrage doesn't work at Prosper.
When I first saw prosper, I thought it was great. I deposited $50 and lent out my first partial loan at 19%. I'm still getting payments from the person, and they're on target to pay me back the complete $50+interest at around $1.80/mo. My only complaint about the company is that you get locked into these 3 year loans. There aren't any means for folks to take out various term lengths, so that you could essentially stack your money as you would in CD investments. The only way to have a constant flow of funds that can be available immediately is to just continually fund small portions of loans each month over the next 3 years. That's kind of annoying.
All that being said, I work for a large bank, and I know how they make money. One of the main ways is to lend money on one side, and convince folks to deposit money (usually by paying them interest) on the other side. They always lend for more than they pay. It's pure arbitrage. I also know that there is often very little margin in it for banks. They need LOTS of customers to make it work. So I got to thinking, could an individual make arbitrage work at Prosper? I searched around and sure enough, there are plenty of folks lending money at 5-6% in order to then lend that money out again at 15-20% to make a profit. Unfortunately, I'm not sure it's a great living. Look at the chart I created below based on $5000 being borrowed at 6%. You need to get a very high return (which is hard, because the higher the rate, the riskier the customer).
| $5000 Arbitrage | Personal Loan @ 6% | Lend Out @ 12% | Lend Out @ 18% |
| Interest + is in, - is out | -475.96 | 978.6 | 1507.46 |
| Income minus Expenses | 502.64 | 1031.5 | |
| Income minus Expenses / 36 months | 13.96 | 28.65 | |
| Income minus Taxes (25%) minus Expenses | 257.99 | 654.64 | |
| Income minus Taxes (25%) minus Expenses / 36 | 7.16 | 18.18 |
So if you could borrow at 6% and lend at 18% with no mishaps, you would make roughly $18.18/mo off a $5000 arbitrage after taxes. To be honest, managing between 10-100 loans (depending on how large your contributions per loan is) is not going to be worth $18.18 of your time. Not unless you say live in a seriously deprived location where that might buy you a royal lifestyle for the week. In which case, you probably don't have good credit, nor access to the internet. The numbers scale linerally, so if you wanted to aim for making $1818/mo you'd need to lend 100x the $5000 or $500,000 to be exact. Now that to me, looks like A LOT of risk!
My thoughts: Arbitrage doesn't work at Prosper.
googhydr-20, who are you?
I've been researching different ways to make money on the web using arbitrage. I've used credit card arbitrage for a long time (it's how I paid off my 6 years of college debt in 2 years, but that's a story for another day). Credit Card arbitrage is getting harder to do because too many people know about it, and because the prime rate is so low and cards rarely offer free balance transfers anymore, so what you can make per month on it is nominal and not worth my time anymore. So I've started looking for a new slight of hand to make a few extra bucks here and there.
The thing I've read a lot about recently and have been doing some research on is adwords arbitrage using google adwords. In doing some various tests, there seems to be someone out there that is a step ahead of me at every turn. With the big ole internet, I'm pretty used to that. In fact, there are usually thousands ahead of me. Everywhere I turn I keep seeing one particular amazon associate id (googhydr-20, and of also googhydr-21 on amazon.co.uk). This person seems to have tagged every single amazon product and nearly ever possible google search keyword! I'm amazed! I can only guess that this person, whoever they are have managed to amass a large fortune for themselves.
Oddly enough, nobody else has written about this person that I can tell. I googled googhydr and googhydr-20 just to confirm, and all I can find is 3 pages of links where folks have copy/pasted the URL into their blog to talk about a product. They're all random folks too so I don't think they even realize they're giving this person some free press. So it makes me start to wonder... [tinkly music should play here, but I was too lazy to search for some in creative commons] Is this possibly Google's ID? Are they getting amazon referral fees for forwarding traffic to amazon (probably at the tick of 8-10% per amazon transaction)? I tried to figure out what the tracking ID stood for, but the best I can come up with for googhydr is "Google Hider."
In any case, I found this amazing, and since nobody has managed to write about it, I decided it was my time.
More on my forays in arbitrage to come.
Oh, and if you want to help me out. Click on the Amazon spinner below. I picked out a few interesting songs that I'd heard today, and I thought you might like as well. Amazon has an amazing MP3 store now with DRM-Free music (can I hear a wooo hooo?) priced at a great price (.89-.99 per track). And even better, I get 10% commission if I can point people to go there and buy.
The thing I've read a lot about recently and have been doing some research on is adwords arbitrage using google adwords. In doing some various tests, there seems to be someone out there that is a step ahead of me at every turn. With the big ole internet, I'm pretty used to that. In fact, there are usually thousands ahead of me. Everywhere I turn I keep seeing one particular amazon associate id (googhydr-20, and of also googhydr-21 on amazon.co.uk). This person seems to have tagged every single amazon product and nearly ever possible google search keyword! I'm amazed! I can only guess that this person, whoever they are have managed to amass a large fortune for themselves.
Oddly enough, nobody else has written about this person that I can tell. I googled googhydr and googhydr-20 just to confirm, and all I can find is 3 pages of links where folks have copy/pasted the URL into their blog to talk about a product. They're all random folks too so I don't think they even realize they're giving this person some free press. So it makes me start to wonder... [tinkly music should play here, but I was too lazy to search for some in creative commons] Is this possibly Google's ID? Are they getting amazon referral fees for forwarding traffic to amazon (probably at the tick of 8-10% per amazon transaction)? I tried to figure out what the tracking ID stood for, but the best I can come up with for googhydr is "Google Hider."
In any case, I found this amazing, and since nobody has managed to write about it, I decided it was my time.
More on my forays in arbitrage to come.
Oh, and if you want to help me out. Click on the Amazon spinner below. I picked out a few interesting songs that I'd heard today, and I thought you might like as well. Amazon has an amazing MP3 store now with DRM-Free music (can I hear a wooo hooo?) priced at a great price (.89-.99 per track). And even better, I get 10% commission if I can point people to go there and buy.
Thursday, February 28, 2008
Charlotte Plans to spray Foray 48B on the city!
I just submitted the story to digg, but I can't believe that Charlotte is planning on spraying a pesticide all over the city!
Digg Link
Digg Link
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