Mr Money’s Slimy Mustache

Tyler Linsten Personal Finance


One of the benefits of not working for some big financial conglomerate is I have no filter from the compliance department. I can say “hey, individual investors, there’s some serious bullshit out there” if I want to. This is one of those times. This is a story about some serious bullshit. 

As a follow-up to this post, there’s more that needs to be said about LendingClub and there definitely needs to be something said about how the issue extends to America’s favorite cult-hero / Personal Finance Guru, Mr Money Mustache.

Mr Money Mustache, if you aren’t familiar, is an extremely popular, uber-frugal, vehemently anti-debt, anti-automobile, and pro-financial independence blogger from Colorado. His intentions seem to be pure until you dig a little deeper, particularly regarding the way he makes his money. Beneath the surface is, in my eyes, a bizarre irony at best, and a greedy sell-out of his ethics at worst.

MMM, for short, revealed in one of his numerous recent interviews and features in nationwide publications that he’s no longer “scraping by” on a meager income. Simply put, dude’s raking it in from his blog. The blog is highly profitable ($400K/year). He earns money from advertising (fine, whatever) and also from affiliate relationships with products he either uses or reviews (fine, usually, I guess?). It’s the second profit source I have a major problem with after the Lending Club fiasco continues to unfold. Since he’s “unveiled” himself to a national audience, he’s opening himself up to more scrutiny and I have some for him.

I’ll let the New Yorker provide some background:

He told me that his blog is now earning around four hundred thousand dollars a year. He was reluctant for this to become public, without his being able to provide a detailed explanation. He makes money from the products and services he recommends—Betterment, Lending Club, Geico, and numerous others. They pay him for every customer who comes to them via his site. He insists that he makes these recommendations based only on his own research and experience. He’s saving all this income and plans to give it away someday. Making money off the idea of not needing money is perhaps mildly perverse but little different from a cleric who preaches poverty yet lives in a parish manse.

Time and time again in the financial world we see people faced with a choice: increase income or remain ethical. Most choose income. MMM, too, is choosing income.

Simply put, MMM updated his LendingClub post to address the news on LendingClub, seemed to think it wasn’t something very notable, and immediately asked readers to click his referral links to help the blog if they want to open an investment account, or if they want to borrow (!!!!!!!). Oh, the irony. Here’s the passage:


Screenshot 2016-05-31 at 1.31.00 AM

As a refresher, LendingClub has admitted to altering the loan documents on a portfolio of loans it sold to an institutional investor so it would fit the investor’s requirements. If they’re this bold in conducting business with large institutions, the “big fish” you don’t want to f*** with, then how exactly do you think they treat their retail investors and borrowers? Do you think, as we move down the hierarchy of “investor clout”, everything is squeaky clean, or could there be the possibility of some fraud elsewhere? If you’re highly concerned about the integrity of every aspect of LendingClub’s business as an individual investor, you’re not alone. (Just so I’m crystal clear: I’m implying that LendingClub investors should absolutely be scared to see what could unfold in the aftermath of the scandal and federal investigation, thus my incredulity at MMM’s shoulder shrug)

MMM has informed himself of LendingClub’s conduct, dismissed it, and is indicating he still wants to make money from sending his loyal readers to LendingClub by continuing his affiliate relationship. This is some serious bullshit. Why am I willing to throw such a big punch like that? It’s because Pete Adeney (his real name) has shown in the past that he does have a “code of ethics” of sorts – or at least a conscience – because he’s been willing to forego income to honor it:

Adeney once did a review of credit cards and decided that Chase was the best. Whenever a reader clicked on Chase’s icon on the page and ordered a card, Adeney got a hundred dollars. Many started doing this, and apparently someone at Chase took note and decided to have a look at his blog. Adeney’s occasional profanities were a problem. Chase asked him to stop using foul language. Adeney told the company to bug off. This cost him thousands of dollars a month in the name of free speech. (New Yorker)

What do you say, Pete?  Do you really think LendingClub is a good place to be sending the throngs of do-it-yourselfers who faithfully trust your advice? Do you really want to endorse this company, or do you just like the cash flow? If you don’t see the LendingClub debacle as a no-brainer situation to say “whoa, let’s take a step back here,” what does that say?

Will you decide to forego thousands of dollars a month again?

Will you back-pedal in your parish manse and do the right thing?