Money Blue Book

Borrow Money Or Invest In Interest Earning P2P Loans With Lending Club

With the lowering of interest rates by the Federal Reserve in response to the current economic climate to the lowest levels we have seen in years, the interest rates offered by high yield savings accounts and high interest certificate of deposits are now simply not as attractive as they once were, only a few years ago. With the stock market still suffering from unstable price swings and massive volatility across all sectors, it makes present day sense to look towards alternative investment ideas to make some money.

While I have been a quiet Lending Club member for a few years now since the online company opens its doors to loan investors, I haven’t felt the need to review the program until now. Until recently, the top high yield savings account and best CD rates at most banking institutions offered a reliably consistent rate of return on deposits. But with market turmoil ever present and the specter of worsening bank failures looming, I’ve begun to turn my attention to other investment possibilities in an attempt to diversify my portfolio risk and seek a higher rate of return. The ability to earn a reasonably competitive interest income with the added ability to diversify risk via peer to peer lending networks like Lending Club and Prosper is becoming more and more attractive. At the very least, P2P lending programs offer potential profit seeking investors like myself the ability to play the role of the banker and help people out with their loan needs, while at the same time earning interest income that’s higher than what’s currently available in a regular savings account or bank CD.

What Is Lending Club and What’s P2P Lending and Borrowing All About?

Lending Club is a person to person, also known as a peer-to-peer, lending website that matches ordinary borrowers with ordinary local lenders (who are ordinary people themselves) through a pairing system that combines social networking, a computerized search algorithm, and manual credit worthiness checks. Essentially, Lending Club is a way to offer low interest loan rates to borrowers with good credit, while at the same time offering willing potential lenders like you and I the ability to earn a reasonably high interest rate of return with a relatively low risk of default on the loans that we extend to these borrowers. It’s an alternative way (that’s growing in popularity) for ordinary Americans to borrow money, get qualified, and get funded for loans expediently without the complex hassles of applying for traditional bank loans or having to deal with the riskier side of 0% balance transfer credit card offers or getting mired into the clutches of payday loans. On the whole, Lending Club offers borrowers better interest rates than can be obtained from any credit card offer, even those that purport to be low interest.

The whole business concept behind P2P lending networks like Lending Club is built on the premise that borrowers will be less likely to default to members of their own local communities. The Lending Club online system offers anonymous borrowers and local micro loan lenders a way to find each other and get matched up based on personal preferential demographic factors like geographic location, educational and professional background, and activity within a particular social network like Facebook (the social networking site where Lending Club had its upstart roots).

Still don’t believe Lending Club or peer to peer lending and borrowing programs are legit? Just take a look at a recent article from the Harvard Business Review, which notes the remarkable rise of peer to peer lending programs and documents the rise of such emerging programs as the next big wave of important financial innovations in the coming years, especially in light of the ongoing economic recession and the collapse of traditional lending institutions. It looks like P2P lending is here to stay, one way or another.

My Lending Club Experience – Investing In High Interest Bearing Loans

As a person who’s always up for trying out new financial products, I signed up for Lending Club when it first came out and have been using the online service ever since. So far, my Lending Club experience has been pretty positive, yielding fairly respectable returns in the process. Currently, my entire Lending Club participation has only been that of a lender and I have yet to participate as a borrower. However, while I can’t comment on Lending Club through my own personal experiences as a borrower, I have had numerous extended online conversations with actual people who have used the Lending Club service for their borrowing needs, primarily to help pay down existing high interest debt. Most of the Lending Club borrowers I’ve come into contact with have been pretty receptive to the user-friendliness of the Lending Club online platform and pleased with the convenient access to reasonably priced loans that the website affords, particularly when compared to last ditch lending alternatives like car title loans or payday cash advances.

One of the reasons why I slightly prefer Lending Club over other peer to peer lending networks – is its non-eBay auction-like nature. Having to engage in a convoluted bidding process for loan offers or loan investment prospects would inject too much complexity into an online loan matching process that’s trying to cater to the ordinary masses. Fortunately for investors in particular, Lending Club offers its loans on a take it or leave it store front basis. If you find a loan and the credit characteristics and interest rate of return strikes your fancy, you can buy it on the spot, or pass.

As primarily an experimental investor and cautious lender, I have mostly sought out high quality, lower risk of default type loans. As a relatively risk adverse lender with an infrequent appetite for riskier loans, I am not to keen on the prospect of any of my loan investments ever defaulting. However, at the same time, I understand that it’s a trade off – safer loans generally yield much lower interest rates of return, while riskier loans almost always yield much higher rates of return to compensate for the higher risk of default and nonpayment. The vast majority of my Lending Club loans as a lender have been A-grade, personally-chosen loan investments. Thus far, I have stayed away from using Lending Club’s computerized LendingMatch program to pair me with desired loans. I guess I have confidence in my own ability and prefer to retain control, rather than let some computer software do the leg work for me.

Currently, I have a little more than $800 invested into numerous micro loans with local borrowers. I’m always on the look out for high quality, attractive loan prospects but unfortunately, they are not always available. When they do become available, I try to snap them up quickly. These A-grade Lending Club loans have become quite a set of high yielding cash cows for me. Thus far, I’ve been very lucky and relatively fortunate as none of the Lending Club loans that I’ve extended have been significantly late or have entered default. Intriguingly, my Lending Club loans have earned me a steady interest rate of almost 8%, which is 2-3 times higher than what I earn with my best CD rates, best high yield savings, and even best money market accounts. As Lending Club continues to grow in popularity, its borrower base will inevitably grow larger in size, and the volume of attractive loan investments are bound to increase. If my default-free track record holds, I may decide to dabble in slightly riskier Lending Club loans in the near future to see if I can snag a higher rate of return but still maintain my default-free streak. Stay tuned!

For those wondering about the prospect of income taxes levied on the earnings off of Lending Club loans – yes, you are personally responsible for paying ordinary income taxes on all interest income that your Lending Club investing activities generate (you are issued a handy 1099 form at tax time).

Setting Up A New Lending Club Account Is Free and Quick

Opening an account with Lending Club is easy and efficient, and as expedient as opening a new online bank account. To open an account and start lending money through Lending Club, you simply submit your personal information, bank name and bank transfer account numbers, along with some optional background information. Thereafter, the account registration process wraps up with the obligatory bank test deposits to verify true bank account ownership

Opening a new Lending Club account for borrowing purposes on the other hand entails a stricter registration process that necessitates that the applicant provide a Social Security Number and other identifying information for a full credit report and  FICO credit score background check (try looking up your own free FICO credit score beforehand). Though Lending Club imposes a rather strict set of prime standards for borrowers, this attention to credit quality over mere quantity ultimately ensures a better experience and loan exchange for both lenders and borrowers in the long run.

Borrowing Money and Getting A Loan From Lending Club

For prospective qualified borrowers, Lending Club offers an attractive way to obtain a loan at comparatively affordable rates – offers that beat out most personal bank loans and credit card interest rates. However, do be forewarned that Lending Club’s qualification standards for borrowers are high grade and rather stringent. Lending Club pretty much only wants prime, or near prime borrowers with good to excellent credit. Those with very bad or subprime credit are probably out of luck when it comes to Lending Club, and will probably have to resort to less than advisable, bottom tier loan alternatives such as bad credit credit cards or payday loan borrowing.

The process of applying for a Lending Club loan is surprisingly straightforward. Approved Lending Club borrowers get a 3 year unsecured fixed interest rate loan, with repayment obligations managed by Lending Club. There is no haggling or negotiations to contend with as you simply submit an application for a loan, and based on your FICO credit score, credit report, and background check, you are offered a fixed interest rate loan to accept or reject. At Lending Club, you can borrow anywhere from $1,000 to $25,000 as an unsecured loan, to be used for just about any purpose, including but not limited to, high interest credit card repayment or small business financing.

To get started as a Lending Club borrower, simply open a new Lending Club account as a borrower, and submit a loan application. At the time of registration, Lending Club will obtain a credit report and FICO credit score check of the borrower in order to rate and assign a credit risk grade (ranging from A thru G) and determine the appropriate interest rate the borrower can solicit on the site. Once approved, the borrower is free to list his or her loan request on Lending Club for prospective lenders to review and examine. During the credit risk scoring process, particular attention is paid to the borrower’s credit rating history, the amount of the desired loan balance, and the borrower’s current debt to income ratio.

Lending Club’s standards for borrowers are high and the program only currently accepts members who can meet the followings status and credit history requirements:

• Must be a U.S. resident.
• Must have a FICO credit score of at least 660, with a debt to income ratio (excluding mortgage) below 25%.
• Credit history report must indicate that you are a responsible borrower.
• Have at least 1 year of credit history, showing no current delinquencies, recent bankruptcies (7 years), open tax liens, charge-offs or collection accounts in the past 12 months.
• Must have no more than 10 inquiries on your credit report in the last 6 months.
• Must have a revolving credit utilization of less than 100%.
• Must have more than 3 accounts in your credit report, of which more than 2 are currently open.

For their middle man loan matching services, LendingClub charges a processing fee (ranging from 0.75% to 3.50% based on Lending Club’s assessed credit risk grade), which is included in the annual percentage rate (APR) and is subtracted from the loan proceeds prior to disbursement to the borrower.

Lending Money and Earning A Comparatively High Interest Rate On Lending Club Loans

To qualify as a Lending Club loan investor, you must meet and satisfy certain preliminary state and financial suitability conditions – translation: you must belong to an approved state and/or pass certain income and net worth requirements. With exemptions for certain states such as California, you generally must have an annual gross income of $70,000 or a networth (including your home) of at least $250,000.

As for the state residency requirement, you must be a resident of one of the following states below. Your state not on the list? Fear not – Lending Club has submitted proposals to all states and new ones are being added as they are approved.

• California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Louisiana, Minnesota, Mississippi, Montana, New Hampshire, Nevada,New York, Rhode Island, South Carolina, South Dakota, Utah, Virginia, Washington, Wisconsin, West Virginia, and Wyoming.

As a prospective Lending Club loan investor, you can start with as little or as much money as you’d like. Once you have opened a Lending  Club account and transferred in the appropriate funds for lending purposes, you will be asked to indicate your level of risk tolerance (credit risk ratings that range from A – G) and prompted to search for loans either manually, or get matched up with prospective loans with the aid of Lending Club’s computer algorithm based LendingMatch software. The Lending Match program generates a suggested loan portfolio based on your level of risk desired and your connections with the borrowers in your account. As mentioned above, I have chosen to stick with manual loan evaluations (with great success thus far) as I feel more comfortable with my own ability to assess loan prospects than entrust that duty to a random computer program.

Those who are new to peer to peer lending may wish to start with small incremental investments and tinker a bit with the seesaw effect of risk and interest rate of return, before diving into larger denominational investments. Those who get the hang of it may actually find the loan investment hunting and evaluation process rather interesting and personally rewarding (remember, you are potentially helping out someone who is in desperate need of a loan to get his or her life going again).

There are two loan components that will be of paramount importance to prospective Lending Club loan investors – the interest rate of return offered, and the rate of default risk. The current range of interest rates that Lending Club lenders and investors can potentially earn varies from 7.37% to 20.11% (depending on how risky the loan is in terms of risk of default, as determined by the automatically assigned Lending Club loan grade.

The worst case scenario for any Lending Club loan lender or investor is the dreaded loan default, which occurs when the borrower refuses or is unable to fulfill the obligations of his or her loan principle and interest rate repayment. Lending Club’s website indicates that the current overall default rate is less than 3%. However, and probably due to my personal strict and stingy loan evaluation tactics, I have yet to experience a loan default on my Lending Club loan investments. On the downside, I probably earn a much lower interest rate of return on my loan investments than I would be able to garner if I opted to invest in slightly more riskier B and C grade loans.

As a Lending Club loan investor, one of the general statistics and trends I track closely is the company’s continuously generated performance stats for all loans. As you can see from the current Lending Club loan stats, Lending Club does a pretty commendable and transparent job of providing updated statistics relating to all late and defaulted loans for all members to review and assess. As the updated loan default statistics demonstrate, rather surprisingly perhaps, the vast majority of loans (particularly the A graded ones) are current and not late or in default. The B and C loans are also not as horrendous in terms of late payments or defaults as one may have assumed. Those who are into mathematics and willing to play the odds of probability may find it worth the slight risk of partial loan default to capture the higher interest rate of return on their investments. As always, smart Lending Club investors ought to spread their loan investments around to minimize the chances that one unexpected loan default will torpedo their entire Lending Club portfolio.

Lending Club Loans Are Now More Liquid Than Ever And Can Be Traded Like Securities

As Lending Club has completed the SEC registration process, all Lending Club notes and loans issued on or after October 14, 2008 can now be purchased and sold as securities, as they now represent Lending Club security investments rather than direct loan obligations of the underlying Lending Club borrower.

Now instead of waiting for the 3 year locked in loan commitment notes to reach maturity, they can now be traded on the secondary market through Lending Club’s trading platform agreement with FOLIOfn Investments Inc, greatly enhancing their liquidity and versatility as investments. While only loans and notes issued after Lending Club’s October 14, 2008 SEC registration date may be traded, in due time, it is reasonable to expect the number of trade-able notes to balloon in the coming future.

For those concerned about the safety and security of their invested loan funds as a lender in the event of a Lending Club failure or bankruptcy, Lending Club actually addresses this issue on their webpage. According to Lending Club, in the event the company, for whatever reason goes out of business or is no longer able to continue servicing loans, in order to ensure continuity, Lending Club has a backup servicing and successor agreement with Portfolio Financial Servicing Corporation (www.pfsc.com) for PFSC to take over loan servicing.

While the Lending Club business entity itself is still burning through venture capital cash like it’s going out of style, particularly as it focuses on promoting the growth and adoption of peer to peer lending, I personally think the concept of P2P social network lending is here to stay. Whether companies like Prosper or Lending Club will be around forever, or whether they ultimately will be bought out by more traditional banks eager for a piece of the peer lending pie, remains to be seen.

Updated List Of the Top Certificate Of Deposit Deals and Offers

If you’re searching for a definitive and regularly updated list of the best CD rates currently available in the market, you’ve come to the right place. In the CD rate table below, I’ve compiled a list of the top nationally available certificate of deposit bank offers featuring the highest annual percentage yields (APY). While CD rates and certificate of deposit offers rise and fall with market interest changes, they tend to promote much higher interest rates of return than other forms of bank or credit union deposits, such as high yield savings or money market accounts. The trade off in order to enjoy the higher interest rates that CDs afford, is a certain degree of liquidity and access to your money. When you put your savings in a CD account, the money is momentarily locked up for the duration of an agreed upon fixed CD term period. In exchange, banks are willing to pay you a much higher interest rate for your savings than they’d otherwise compensate you for a regular savings account. Typically for certificate of deposits, the longer the CD term you are willing to lock yourself into, the higher the CD interest rate you will receive in return.

For the sake of brevity, I have chosen to only list the best CD rates for 12 month certificate of deposits. Along with the top CD rates, I have also provided comparative rate offers from popular brick and mortar retail banks as well, since many consumers have a lazy tendency to automatically buy CDs from their local banks or credit unions rather than take the time to conduct a thorough online search for better deals. One thing to note when it comes to CDs is that the best CD rates are rarely offered by large retail banking giants like Citibank, Bank of America, JP Morgan Chase, or even Wells Fargo. Usually it’s the small to medium size, or even online banks that market the best CD rate offers.

Comparison Shop For The Best CD Rates and High Yield Savings Accounts

While I believe the updated CD rate chart below reflects the best CD rates available, I also believe in the importance of thorough price comparisons and digestion of all CD rate reviews and bank rate alternatives. Currently there is a rather highly touted online service that’s growing in popularity called – Lending Club, where consumers can engage in peer to peer lending and potentially qualify for interest rate earnings in excess of 9.60% APY. While not fully protected by the FDIC the way ordinary bank CD’s are, the impressive rates of return of Lending Club are at the very least worth some consideration by CD rate chasers.

List Of The Highest Yield Bank CD Rates For 12 Month Deposits (1 Year)

High Yield CDs and Savings Accounts Are Protected By FDIC Insurance

CDs and certificate of deposits are sought out by savvy investors primarily because of the higher interest rate of return that they offer in comparison to other types of bank account deposits. While investments such as stocks and mutual funds usually offer higher rates of return over the long haul during ideal economic times, during periods of major recession or credit-crisis-induced financial turmoil, the benefits of FDIC insured bank deposits really shine. Bank deposits and CD accounts are fully protected from loss in the event of a catastrophic bank failure by the federal government’s FDIC insurance up to the current individual maximum FDIC coverage limit of $250,000 per bank. Backed by the full faith and credit of the U.S. government, bank savings and CDs offer the maximum amount of financial protection afforded in the market today.

Keep Your CD Deposits Accessible and Liquid By Setting Up A CD Ladder

As is generally the case, the longer you are willing to have your CD investment locked up, the higher the CD interest rate your bank will offer you. When you buy a certificate of deposit through a bank or credit union, you transfer money into a CD savings account for a fixed amount of time and agree not to pull the amount out until the time period matures or expires. In the event of a premature CD withdraw before the term limit is up, there is a hefty penalty fee you must pay to the bank. So long as there’s no early CD pullout though, upon maturation, you are free to withdraw your money out along with the accrued interest and decide whether you want to roll it over into another CD deposit or walk away.

However, the best way to maximize your CD rate of return and ensure a reasonable degree of accessibility to your CD money is to set up a CD ladder. A CD ladder is simply an expense-free investment strategy used to manage CDs that both maximizes liquidity and interest rate (by managing multiple long duration CDs utilizing smaller amounts), and at the same time minimizes risk and the potential drawbacks of freezing up your savings for an extended period of time. The process of laddering CDs requires the bank account holder to initially purchase multiple CD’s with different term limits so that they ultimately mature at fixed regular intervals. By staggering multiple CD deposits so that each individual CD account matures at set intervals, this affords the deposit holder additional liquidity, allowing him or her to take advantage of rising interest rates and still be able to continuously seek out the best banks with the highest CD rates possible.

Review of MonaVie and The Acai Berry Fruit Juice Company’s Health and Marketing Claims

MonaVie. Mona Vie. The word actually sounds like a spin off of some french phrase (mon ami), but when I hear the name, two things immediately come to mind – acai berry juice and multi level marketing pyramid scheme. The MLM business scheme or pyramid marketing concept usually elicits a series of red alert alarm bells in my brain’s BS scam detector, however, I’m willing to take a closer look at MonaVie before rendering my personal critique and verdict. After having tried out and actually tasted the MonaVie acai berry fruit drink, I have to admit, it’s a rather sweet and tasty beverage – sort of a crisp combination of grape juice, blue berries, black berries, and a hint of dark chocolate. There’s not much negative commentary I can sling at the MonaVie product in terms of taste alone, but the outrageously expensive price tag and the rather suspicious marketing approach of the company leave much to be desired.

As an ordinary American consumer and a casual observer, I’m not sure what to make of this whole MonaVie acai berry fruit juice craze that seems to be sweeping the health and fitness world. The product’s been featured on the Food Network and on daytime talk shows for women like the Rachel Ray show, and eagerly touted by popular television hosts like Oprah Winfrey as the ultimate nectar of the gods. At least several medical commentators have appeared on The Oprah Winfrey Show recently to promote the acai berry as an invaluable source of super food nutrients and as a magical method to promote youth and bodily rejuvenation. While most of the on-air health commentators were on the Oprah show to promote their individual books, even Oprah herself seemed to jump on the acai berry bandwagon, endorsing the nutritional claims of the tiny purple berry in her own boisterous way.

And it’s not just celebrity women either (who in my sexist opinion tend to be very ultra health conscious). Even celebrity guys seem to be getting in on the acai super fruit craze as well. There are numerous photos floating around on the internet of well known celebrities (both male and female) photographed with  their MonaVie acai juice bottles. I’ve seen hip hop stars and motor sport athletes on MTV’s Cribs show opening up their refrigerator doors for the camera to proudly display their prized rows of ultra-expensive MonaVie branded acai juice bottles. To top it off, when the Boston Red Sox won the Major League Baseball World Series in 2007, you even had several pitchers and players publicly thanking the Mona Vie company and attributing their athletic success to the seemingly magical healing powers of the MonaVie acai berry drink. When professional athletes who have just won the most competitive pinnacle award of their profession celebrate their triumph by giving a ringing endorsement of a particular enhancement product, citing the competitive advantages it allegedly provided their bodies through the grueling eight month long baseball season, I definitely take notice. However at the same time, my curiosity is greatly tempered with a strong dose of skepticism and suspicion at the celebrity’s personal motivations for such a resounding product recommendation – and I find myself wondering if the celebrity was partly motivated by financial considerations.

Without a doubt, MonaVie is a popular and highly promoted superfruit juice product, frequently mentioned in popular entertainment and athletic circles among the rich and trendy. It also has a strong growing presence online and on TV, but then again, so do many of the numerous get rich quick schemes and snake oil scams out there, featuring all types of facial cleaning products and useless weight loss shakes and pills. All such popular products have their own legion of compensated celebrities ready to help make the sales pitch and enthusiastically promote the product to the audience. Just because a product is heavily marketed and seems popular does not make it legit. Thus I wanted to take a more objective look into the MonaVie product itself, its health claims, and its marketing approach to decipher for myself the legitimacy of the brand. My primary goal is to answer these series of questions – Is MonaVie a scam? Does MonaVie acai juice berry drinks actually provide the health benefits re-soundly touted by its army of rabid distributors? And finally, is MonaVie a product I would actually purchase and consume for myself as an average, everyday mildly health conscious consumer?

The MonaVie Acai Berry Juice Product

MonaVie is a fruit juice drink made up of a blend of 19 different fruits. In a nut shell, it’s like Odwalla or Naked branded smoothie drinks – except the drink is marketed as an acai berry product and it comes in a fancy looking wine bottle to give it allure. While the company refuses to disclose the actual numbers detailing individual juice makeup, it eagerly markets the fruit juice cocktail as some type of specially formulated super fruit juice, citing its composition of acai berries for its supposed magical ability to cure all sorts of physical and mental ailments. While the company does not expressly state that the MonaVie acai berry juice drink is capable of amazing healing properties, that is the marketing direction the company seems to strongly hint at. Obviously due to legality reasons, MonaVie can’t officially claim its juice drink to be a health elixir, but it sure seems like it unofficially wants to based on the promotional dance it’s constantly engaging in.

Inside of its fruit juice drinks, MonaVie lists as one of its primary ingredients – the acai berry (pronounced ah-sai-ee) – a small purple black fruit about an inch in size and produced from the acai palm tree in the Amazon of Brazil. Through its network of distributors, the MonaVie company promotes the message that its unique acai berry juice blend contains many of the antioxidant related health benefits associated with the acai berry and other special fruits. Supposedly, these super fruits are packed with powerful nutrients and antioxidant compounds that uniquely protect the body’s cells from damage and disease, boost the immune system, and slow down the otherwise inevitable process of aging. However, much of the alleged health benefits of MonaVie and the extent of the nutritional value of acai have been called into constant debate and frequently questioned by naysayers that cast suspicion at what exactly is contained in MonaVie and the extent of its alleged nutritional value if any. Certainly, the company’s reluctance to share detailed information about the specific acai berry concentration found in its bottles and its mysterious refusal to reveal detailed proportional make up of how the  fruit juices in the MonaVie blend are made up continue to fuel discussions abut the health claims made by the product’s distributors.

Monavie Acai Is Sold Exclusively Via A Questionable Multi Level Direct Sales Approach (AKA Pyramid Scheme)

Mona Vie acai juice drinks are not available in traditional supermarket chains or grocery stores like Safeway, Kroger, or Wegmans, and they’re not even available via specialty health minded retailers like Whole Foods or Trader Joe’s. You definitely won’t find the company’s products at discounters like Walmart or Costco – no, the MonaVie company shuns the traditional sales outlets in favor of a more personalized and almost cult like marketing approach.

MonaVie was launched in January 2005 by a long time direct sales marketing veteran and since then, the company has relied exclusively on a multi level marketing strategy to promote and sell its expensive juice drinks. For all intents and purposes, the company’s more of a powerful marketing machine than a health food provider. Certainly there may be substantially better fruit juice products out there at much cheaper prices, but frankly, and somewhat commendably, MonaVie does a pretty powerful job of hyping and cleverly convincing health fanatics that they absolutely must drink this product everyday to live their lives to the fullest.

By tapping into a sales stream that takes advantage of trusted personal relationships to generate sales, the company has become wildly successful – at least on the sales side. Those unfamiliar with multi level marketing (MLM) may be more familiar with its common nickname – the pyramid scheme. A MLM or pyramid scheme relies on a direct sales technique based on a relationship referral business model whereby trusted people are the engine components that drive the commission based sales. Whenever a sale is made, a lofty commission is paid out, not only to you (the person who made the sale), but also to the person who referred you into the marketing program as well as to the person who referred your direct referrer – hence the pyramid nature of the arrangement. Because these multi level marketing programs are so potentially lucrative for those at the top of the pyramid (the upline), the system strongly encourages and incentivizes participants to zealously promote the product and heavily recruit new entrants into the program (the downline) to further earn sales and commissions for those on the up line.

Now, the one thing that must be made clear is that not all multi level marketing programs or pyramid schemes are inherently evil or illegal. Not all pyramid schemes are blatant scams or disreputable shell games the same way that Ponzi Schemes are. In fact, there are many otherwise thinly legitimate multi level marketing programs out there such as Amway, Avon, Mary Kay, Herbalife, Tupperware, and all sorts of online affiliate programs. However, many of these MLM based companies suffer from the same stigma and questionable scrutiny that MonaVie faces as well. While not outright frauds or scams like the way Nigerian 419 scams are for example, the same scammy concerns arise because many of these MLM programs really only benefit those at the top of the marketing pyramid and often encourage overzealous sales techniques that frequently lead to almost predatory recruiting tactics and pitches. Oftentimes as well, many of these MLM programs demand contractually obligated sales quotas that members must satisfy every month or face having to purchase the products themselves to meet the sales quota requirement. In the case of MonaVie’s contractually obligated arrangement for wannabe new distributors into the program, new entrants are obligated to buy at least 4 bottles a month of the pricey acai berry juice. They don’t come cheap and failure to sell enough bottles every month will require that the distributor contractually purchase the required quota for personal use.

As noted by an investigative news article from Newsweek, according to income disclosures, most of the million strong sales team of MonaVie appear to be really just drinking the juice themselves rather than selling them as originally intended. More than 90% of supposed distributors of MonaVie are actually considered wholesale customers, whose earnings were mostly discounts on sales to themselves. Remarkably according to the article, fewer than 1% of the MonaVie marketing pyramid’s sales people qualified for commissions and of those, only 10% made more than $100 a week. The Newsweek article even goes on to state that according to a top MonaVie recruiter, while obviously not disclosed by the company, the MonaVie multi level marketing program’s drop out rate’s around 70%. It’s certainly a fascinating tidbit to keep in mind as you ponder the question of whether MonaVie’s a scam. While I personally don’t think MonaVie is a scam as they do offer an otherwise legitimate fruit juice product, the acai juice company sure has rather unsavory fringe elements to it.

In regards to the secret world of direct sales and pyramid marketing, I had my first negative exposure to MLM programs when I was recruited by a company called Vector Marketing to sell Cutco branded knives back when I was just an 18 year old high school student. For some odd reason, many fellow high school students such as myself were targeted with elaborate marketing sales pitches by Vector Marketing recruiters to become trained in the art of tapping personal relationships to sell ridiculously and insanely overpriced Cutco steak knives to our friends and family members. Obviously, our recruiters were eager to train us into becoming their commission earning downline so that they could profit from our sales as our upline referrals. While the Cutco knives we lugged around and sold were of obvious high quality, they were no where even close to being worth the exorbitant price demanded of each individual cutlery. Quality is one thing, but they were and to this very day, are still vastly overpriced. While I was able to tap into my personal relationships and beg a few neighbors to shell out hundreds of dollars for a few knives out of pity, I remember always feeling extremely scammy and sleazy during my rehearsed sales pitches to supposed loved ones. As a mere 18 year old at the time, I wasn’t too fond of  having to take advantage of my close relationships for financial gain. There was nothing illegal or deliberately evil about the whole sales system, but the whole multi level marketing approach simply felt shady and rather manipulative to me.

Mova Vie Is Extremely Expensive and Overpriced Despite Its Alleged Acai Berry Health Properties

The MonaVie acai berry juice product is not cheap. In fact it’s downright expensive – ridiculously overpriced at astronomically rip off levels if you ask me. A single MonaVie juice bottle will cost you $30-$40 per bottle, for a little more than 25 fluid ounces of the fruit berry mixture. According to the promotional material, to fully appreciate the nutritional benefits of acai berry juicing, you’re supposed to drink at least 2 fluid ounces of the purple stuff in the morning, and another 1 ounce at night. At the rate suggested by the MonaVie company, a single bottle will last you about a week. At $30-40 a bottle, that comes out to $120-$160 a month, and $1,440-$1,920 a year. Unless you are swimming in money and flush with dollars like the professional athletes or financially well off  like celebrities Oprah Winfrey or Rachel Ray, chances are, you’re going to find regular consumption of this product to be well beyond your financial means. The lucrative price of each expensive bottle of Mona Vie can probably be traced back to the high cost of commission maintenance that must be paid out to the entire pyramid marketing chain upon each sale.

Because of the multi level marketing nature and aggressive direct sales promotional tactics of MonaVie distributors, a wide array of ridiculous health and nutritional claims seem to have blanketed the internet. Sometimes it’s a little difficult figuring out which writer is trustworthy and which one is blatantly a sales guy. I have personal gut-feeling suspicions that sizable portions of these favorable web-based health comments and supposed online testimonials were made by MonaVie distributors and financially interested sales promoters trying to hype up the appeal of their pricey cash cow via fake product reviews. A quick browse of the internet quickly reveals all sorts of outlandish testimonies and anecdotal stories by random people – claims of how MonaVie acai juice drinking cured their heart disease, healed their arthritis, alleviated stress and depression, cured their acne, reversed their aging, repaired joint damage, got rid of joint and back pain, cured their cancer, treated their diabetes, made them more energetic, and even improved their sex life. The craziest claim I’ve seen was some gentlemen who claimed that his steady diet of Mona Vie acai berry juice made his special male anatomy organ larger and more virile. I’ve even read a few ridiculous claims by anonymous female commentators on various Mona Vie related blog posts touting how acai berry juicing grew their chests and helped make their breasts larger. The myriad of outlandish and totally unsubstantiated claims are quite abundantly available online – an unfortunate side effect that distorts the truth, whenever there is a lot of sales money to be had.

Now it’s one thing for a product to be expensive and it’s a whole different matter altogether if the product doesn’t actually do what it says it is supposed to do. The literature and research on the amazing health benefits of drinking MonaVie and the supposed God-like healing properties of acai berry juice are still not entirely definitive. While there is little doubt that berries and fruits such as acai, blue berries, blackberries, and pomegranates common loads of nutritional vitamins and powerful compounds such as cell repairing antioxidants, the research is not yet entirely supportive that these are indeed super fruits that can cure all and heal all. There is scientific evidence that the acai fruit and other dark berries are uniquely high in Oxygen Radical Absorption Capacity (ORAC), a rating system that evaluates a food product’s ability to fight harmful free radicals in the body, but that doesn’t mean that a single fruit can potentially replace all other alternative sources of vital nutrients.

To be fair, the MonaVie company doesn’t actually go out of its way to blatantly promote the MonaVie product as a magical berry elixir anymore. MonaVie does not actually make the health and nutritional claims itself. Due to stricter federal scrutiny of Mona Vie’s official claims, the company has drastically cut back on its previous assertions of health benefits and healing properties. The company is now content with marketing the MonaVie drink as merely a high end fruit juice product, letting its legion of cult like Mona Vie acai berry drinkers and promoters hype the unbelievable health benefit innuendos on their own. After all, the motto of the MonaVie company is – “Drink It, Feel It, Share It” – which sounds more like a sales focused marketing directive of sorts to me.

Acai Berries Do Contain Lots Of Nutrients – They Just Don’t Have Super Healing Powers As Suggested By Some Independent MonaVie Distributors

As a mild defense for the key heralded component of MonaVie’s juice product – the acai berry does indeed contain abundant nutritional value. There is quite a bit of research touting the health benefits of acai berry as a good source of fiber, minerals, vitamins, polyphenols, and antioxidants for healthy bodily performance. The expensive acai fruit does indeed contain a wealth of nutritional benefits compressed into each little purple berry, but then again, much of the same health benefits can easily be found in large concentrations in other more common and cheaper fruits such as bananas, blue berries, and apples as well.

Despite my admitted fondness for the taste of acai, I’m extremely wary of buying into the whole MonaVie acai juice product because I simply do not know how much of acai can be found in each bottle. Because MonaVie refuses to disclose the actual composition of its juice drinks, we do not know for certain the exact breakdown of its juice cocktail and the exact amount of expensive acai berry concentrate in the blend. It’s very important to keep in mind that the MonaVie juice mixture doesn’t contain acai berries exclusively. It’s comprised of an admitted blend of 19 fruits – including many common and cheap fruits like bananas and apples, easily found in your neighborhood grocery store. If you really buy into the claimed health benefits of juicing and nutritional potency of acai berries, there are much easier and cheaper ways to get your purple berry fix. Most grocery stores sell acai berry juice variations and even certain online stores sell similar acai berry laden juice drinks, acai powders, and acai capsules for much, much less.

The fact of the matter is that people are always looking for the easy way out and frequently are all too eager for a magic potion that will make take away the need to put in effort. There is plenty of research touting the overwhelming health benefits of a low fat, low sugar diet comprised of lots of fish and whole grain foods. There is also overwhelming evidence that smoking and excessive alcohol drinking wrecks havoc on physical and mental health, and that daily consistent exercise is absolutely essential to healthy living. Yet, we as humans seem to ignore those simple practices and remain perpetually enamored with the possibility that there are super fruits out there that can serve as magic silver bullets to our health problems and ailments. The reality is that there is no such thing as a one size fits all super fruit. Proper health and nutrition requires a good moderated balance of fruits, vegetables, and proper exercise – not the services of a single food product – especially not one that is so expensively priced.

How To Buy MonaVie Online And Test Out Acai Berry Juices For Yourself (Remember, It’s Not Cheap and Its Health Claims Are Not Fully Substantiated Yet)

Recently, I purchased a few bottles of MonaVie online simply to test out and review the juice product for myself since I didn’t know how else to try it out for free. While I have no intention of actually signing up as a distributor or getting myself locked into some multi level marketing contract, I think it’s perfectly understandable if there are people out there who remain curious about the fruit juice blend. It’s admittedly rather tasty, albeit extremely expensive and somewhat overrated. Personally, I don’t buy the magical juice berry claims of the MonaVie supporters and chose to consume the drink on a one time limited basis as I would any new drink. If you really want to start juicing, buy a fruit juicer for yourself or buy pre-made fruit smoothies from the grocery store. Many of these pre-made blends contain acai berry and they’re a much cheaper way to get exposed to the nutritional value of acai should you so choose to partake. If you really insist on joining the MonaVie acai berry craze, there are plenty of equally good generic acai berry brands out there as well – in various just-add-water powder products and pills.

In the event you are determined to test out MonaVie acai berry drinks or similar acai berry products based on curiosity, here are a few ways to buy them online. Remember, it’s not an endorsement, and I’m just pointing the way for you if you insist:

1. MonaVie Active Health Juice With Acai (Amazon) – 1 Bottle of the dark purple stuff.
2. MonaVie Active Juice Bottles With Acai (Amazon) – 4 bottles – A way to buy MonaVie online without having to agree to some recurring sales contract.
3. MonaVie Juice Bottles With Acai (eBay) – Cheapest method to buy MonaVie online without commiting to a distributorship agreement, but requires eBay auction bidding.
4. Natrol – Acai Berries 1000mg Per Serving 60 Capsules (Amazon) – 60 capsules
   
5. Organic Acai Fruit Capsules with Camu Camu (Amazon) – 60 capsules – The Brazilian acai berry in pill form.
6. 100% Pure Acai Fruit Powder with Camu Camu (Amazon) – 90 grams – Just add water to make an acai powder juice drink.

I’m a credit card arbitrage seeker, which means I enjoy looking for creative ways to make an extra buck by legally exploiting the existence of attractive credit card rewards and 0% APR credit card offers in the marketplace. One of the ways I used to make some extra money on the side was by applying for introductory 0% balance transfer credit card offers and depositing the interest free funds into high yield savings accounts to earn some passive interest income. While the most lucrative 12 month, no balance transfer fee promotions have dwindled as a result of the ongoing economic slump and worsening credit crisis, there are still creative ways available for savvy credit card arbitragers to profit from.

As with all credit card arbitrage type activity, the decision to partake or not requires that you weigh the potential payoff against the risks and effort involved. While some people may shrug off such activity as a waste of time and not worth the potential rewards, others see it as a relatively effortless way to earn some free credit card rebates that they’d otherwise not have. I tend to adopt the latter viewpoint, regarding credit card arbitrage and interest rate pursuits as integral facets of my financially frugal lifestyle. Personally, I don’t mind taking advantage of effortless free money opportunities as they present themselves, so long as the application or management process is not too onerous or prohibitive.

Of course, there will always be naysayers who cite such activity as a complete boring waste of time. But frankly, if $100 or $200 worth of rewards is small pocket change to you, I supposed it begs the question as to why you are even reading this personal finance blog to begin with when you ought to be sitting on some tropical beach resort with a martini in your hand and tended to by bikini clad beauties (or the male equivalents if that’s your thing).

Open Your New Bank Deposit Account With A Reward Credit Card To Earn Free Credit Card Rewards, Or Use A 0% Purchase Card To Get An Interest Free Credit Card Loan

While certainly not as lucrative or easy to fully manipulate on a massive scale as balance transfer credit card arbitrage, one relatively new way to take advantage of arbitrage rewards is to use a reward credit card to open and fund a new checking or savings account to earn free cash back, reward points, or airline miles. When you open a new checking or savings account pursuant to some promotional bank offer and have to transfer in money for the first time, certain banks permit you to initially fund the account using a credit card. Oftentimes, the card transaction goes down as a credit card purchase, allowing the cardholder to earn free instant rewards, rebates, or whatever purchase incentives the credit card offered. For those interested in earning credit card arbitrage income through the use of interest free credit card loans, funding the new bank account with 0% credit cards that offer introductory zero percent rates on all new purchases is another interesting option to consider in lieu of credit card rewards.

Before funding a new bank account with a credit card, here are a few very important factors to consider:

1. The funding limits imposed by the bank where the new checking or savings account is being opened at – some banks limit the amount of the initial deposit that you can charge onto a credit card. The credit card funding limit can range anywhere from $1,000 to an unlimited amount, capped only by your credit card’s maximum spending limit.
2. Whether the bank will treat your reward credit card funding transaction as a purchase (preferable) or as a cash advance (deal breaker). This factor is critical because you will only be able to earn credit card rewards if the initial fund transfer’s treated as a purchase. If the transaction’s recorded as a cash advance, not only will you be forced to pay the high APR rate for cash advances immediately, you will earn no credit card spending rewards in the process (which defeats the whole purpose of credit card arbitrage, which is to get more back than you put in).
3. The third factor to pay attention to is whether there are any credit card issuer restrictions (Visa, Mastercard, Discover, or American Express). While some banks impose no card issuer restrictions when it comes to new checking or savings account funding, others limit the permissible cards to only just Visa or Mastercard.

Finding a bank that permits newly opened checking and savings accounts to be funded with a credit card is relatively easy. Making certain that the credit card transaction will be registered as a purchase, rather than a cash advance transaction will require a bit more digging and conversing with customer service support on your part. While the majority of funding requests via a credit card go down as purchases, a quick browse through various online forums reveals a bit of disagreement among arbitrage seekers on how the different credit card issuers are actually treating such transactions.

Ultimately, how a particular credit card transaction is treated is up to the credit card issuer and not the merchant. Thus, the bank you are opening the new checking or savings account with has little say over how the funding transaction will be treated, whether it be recorded as a purchase or a cash advance. Because of this slight ambiguity, it’s probably safer to fund newly opened bank accounts with the merchant’s own brand of credit cards. Thus for example, if you are opening up a new Citibank checking or savings account, to be on the safe side, you may be better off funding your new account with a Citi credit card as they are less likely to pull a fast one and record the transaction as a cash advance than another credit card merchant like JP Morgan Chase or Bank of America. Likewise, if you are opening a Bank of America account, you should stick with using a Bank of America credit card to fund it. This is just a precautionary measure. Of course, you can always call the bank and credit card issuer directly to confirm how the initial bank account funding will be treated.

List Of Banks That Allow New Accounts To Be Funded Using Reward Credit Cards:

1) Citibank (view Citibank offers) – Citibank does not permit new bank accounts to be funded with Discover or American Express – you’ll have to use either a Visa or Master Card. On the plus side (and this is a very tremendous plus), Citibank does not appear to impose a maximum deposit limit on the amount you can charge onto your Mastercard or Visa credit card to open your new Citibank account. Theoretically, if your reward credit card offered 1% cash back with a high spending limit of $100,000, you could pocket an instant $1,000 worth of rebates immediately – theoretically of course. Of course, you’d want to pay off the whopping balance immediately by using the new $100,000 bank balance lest you face the prospect of a $100,000 credit card bill.

2) Bank of America (view Bank of America offers) – Within the last year, I opened a new Bank of America online checking account and successfully transferred in funds using a credit card. The card I used was actually a Chase credit card, but the transaction went through without a hiccup and was duly recorded as a reward earning purchase. While there is no limitation on the type of card that may be used to fund a new BoA account, the big downside is that Bank of America limits credit card deposit requests to a measly $1,000.

3) JP Morgan Chase – Chase bank also permits applicants to fund their new Chase checking or savings accounts with a credit card. Like Bank of America, they impose a deposit transfer limit, currently capped at $2,000. It’s not a whole lot, but if you’re going to open a Chase bank account anyway, might as well use a credit card to fund it and put some free credit card rewards in your pocket in the process.