No. of Recommendations: 1
One part I neglected to mention is I'd be backing the loan with an equivalent amount of money in my emergency fund,

It is really a matter of personal preference on whether or not to include this liquid asset as part of the deals return on capital.

One approach would say that it is my E-fund as such it is a seperate entity only to be used in an emergency. The e-funds purpose to absorb unforseeable hits to the pocketbook a such if the deal falls apart the e-fund kicks in like it would for any other financial bump.

The other approach would say that I just added more risk to my e-fund because it is my fall back position if something causes the deal to go south. As such I should look at the return on both the invested money and the reserver money and decide if the deal still makes sense.

jack
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