How to Raise Cash Quickly

Document Sample
How to Raise Cash Quickly Powered By Docstoc
					        How to Raise
                  Cash Quickly
How to Raise Cash Quickly


Unexpected financial situations happen to even the most careful among us. When
financial emergencies occur in your life, you may find yourself tempted to go for the
easiest ways to raise cash. However, there are usually better ways.


If you can keep your wits about you, money can often be raised in ways that have
minimal long-term consequences.


Follow these tips to help you calmly assess the situation and determine which option
would be best for you.


Be Certain You Really Need Cash



You might not even need cash if your unexpected expense is relatively small. Maybe
you have some gift cards to stores or restaurants that you’ve forgotten all about.
Also, some credit cards have reward programs that frequently go unused. Some of
these pay cash and others build points than can be redeemed for merchandise, gift
cards, and more.


Quick Money Schemes to Avoid, if Possible


   1. Family loans.Borrowing money from family and friends can be a positive or
      negative experience. Whether or not this is a good option for you really
      depends on your unique situation.

           Consider the likely outcome if you are unable to pay them back as agreed.
           In many instances, if such likelihood occurs, it can cause hard feelings for a
           long time.



                                         1
   2. Payday loans. Some of the worst ways to raise cash are loans that come with very
      high interest and fees. Payday loans are an easy way to raise money quickly,
      assuming you’re employed. But when you consider the interest and fees
      associated with these loans, you could easily end up paying them back twice as
      much as they lent you – or even more!

   3. Title loans. Loans that use your car title as collateral are not only very
      expensive, they are also quite risky. If you can't pay as agreed, you'll lose your
      vehicle.

   4. Cash advances from credit cards. These advances are another expensive way
      to get your hands on some cash. While credit card purchases don’t usually start
      accruing interest immediately, cash advances do.


Better Options


While still not your best option, you can withdraw money from your retirement
account. Here’s a loophole you can use to avoid taxes and penalties:


If you transfer your IRA into a new IRA account, you have the option of having the
money sent directly to you, on the condition that you deposit the money into a new
IRA account within 60 days. If you can replace the money in that time frame, you're
getting an interest-free, penalty-free, and tax-free loan. You can only do this once
each year.

If an IRA transfer isn’t an option for you, you can also sell savings bonds that haven't
yet matured. Also consider selling your stamp, coin, or jewelry collection. Keep in
mind that if you're going to sell them quickly, you're unlikely to get a good price.


Your Best Choices


   1. Sell some liquid investments. Selling items from your non-retirement portfolio is,
      for many people, the best way to raise some money. First, sell those items that
      have been stagnant and show no signs of doing anything in the near future.


                                          2
                                      2. Borrow from your 401k. However, there are penalties and taxes if you fail to
                                         pay the money back.

                                      3. Take out a home equity loan. A home equity loan is a viable option for some;
                                         just keep in mind that you are putting your house at risk if you can't pay back
                                         the loan.


                                   Planning Ahead


                                   Having an emergency fund is critical to negating the effects of financial emergencies.
                                   Strive to save 3-6 months of expenses and leave the account alone unless you have
                                   an actual emergency. This is the most fundamental step you can take to ensure your
                                   financial security.


                                   Avoid letting a challenging situation become even worse by making a hasty decision.
                                   First, decide if you really need cash. Maybe a non-cash alternative is available. If this
                                   doesn’t work for your situation, do some planning before you decide how to proceed.
                                   Be sure to thoroughly investigate the fees and interest rates that are associated with
                                   your options.


                                   Although unexpected expenses can bring with them tension and high emotions,
                                   remember that making a good choice now will result in fewer headaches later. Take
                                   as much time as you can to make the best decision for you.




                                                                            3



Powered by TCPDF (www.tcpdf.org)
Curtis Rose is an experienced professional with extensive experience in all
aspects of personal finance. Curtis writes and publishes articles, courses,
guides and special reports on his personal finance blog. Sign up for his
monthly personal finance newsletter and receive tons of free information
that you can use to help you reach financial freedom.

               http://www.PersonalFinanceDashboard.com

				
DOCUMENT INFO
Shared By:
Categories:
Stats:
views:8
posted:9/23/2012
language:
pages:4