It’s been over a month since I’ve started putting 75% of my earning in my 401K in an attempt to max it out before I switch jobs and have to wait for 401(k) enrollment. It’s been tough to scale back on the spending and I’m nearing the point where I may have to dip into my “emergency fund.” It’s not the best emergency when you have to pay about 5% interest on it (after deducting my taxes) but I think it’s worth that to get a) the forced savings and b) the tax deferred growth. As I’ve said in the past, pay yourself first. If it’s in my 401(k) it’s locked away in a place that I can’t get to it and I’ve effectively paid myself.
One of the things that has be bugging me lately is that I haven’t been able to add any money to my Prosper account. It seems like a waste that I’m making 20+% on a sum as low as $1,000. If I could get just $10,000 in there, it would go a fair ways toward paying my Roth IRA each year. If I could manage $100K it could get to be a good supplemental source of income. I’ve thought about playing a Prosper arbitrage game with that emergency fund. That is too much risk for me or is it?