How do I have time to blog after getting on the Flightline, you ask? It turned out that our flight commander was nice enough to give us an Intro Day, and today is basically a chaffe day. But my dollar ride is scheduled for Monday...Hopefully I won't throw away the entire weekend.
This post is in response to my friend James' comments comparing investing in Prosper vs. Roth IRA and Thrift Savings Plan, etc.
Both of us are Prosper lenders and Roth IRA investors. I'm a big fan of Roth IRA and have been maxing mine ($4000/yr for us young'ns) for almost a year. I haven't done anything with TSP though, preferring instead high-yield savings accounts (EmigrantDirect, etc.) because I don't have a lot of money, so liquidity is nice. Prosper, though, began as kind of a help-me-help-you type of thing and turned into another investment tool for fun. On LendingStats, Prosper investors with the highest returns on investment (ROI) also take big risks with sub-prime high-interest loans, but I'm not comfortable doing that. Unless one is very lucky, a lot of investment is needed to counteract the effect of even just one delinquency on the ROI.
For the sake of long term investment, I naturally put more weight (=$$) on tax-advantaged Roth IRA. Since my investment horizon is 35-40 years, I've chosen a more aggressive and risky mutual fund for my Roth IRA; I'll choose a more conservative one closer to that glorious day of withdrawal. However, in the short term, Prosper actually seems like a very stable investment, returning at slightly better than high-yield savings, neither one of which is tax-advantaged, but comparatively much more liquid than Roth.
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