10 Places to Get Your Hands on Some Quick Cash

by Glenn J. Downing, MBA, CFP®

Everyone at some time or another needs some cash - and quickly!  The question is, have you anticipated this need and saved into it?  Or do you need to scramble?  What follows is a list of ten helpful suggestions.  

Here are 10 places to consider, in descending order.  

1. Your emergency fund.  But if you’re reading this, I’m guessing you haven’t established and funded your emergency fund.  So when this particular cash shortfall hump is over, you know what you need to do!
2. Tap a relative. Be sure to repay promptly along with a suitable gift, i.e. a gift card, nice bottle of wine, etc.
3. A 401K loan. In this case you’re borrowing money from yourself.  There will be an interest charge, but you’d be paying the interest back into your own account.  Typically, you can borrow out the account value up to $50,000, and you replay the loan through payroll withdrawal.  I’ve looked at this option in more detail here.
4. An online unsecured loan. To cite two examples, Lending Tree and SoFi offer signature loans with online applications and funding to your checking account in just a few days.  Google various sources.
5. A direct withdrawal from your 401K, IRA, or other retirement plan. This amount will be fully taxable to you, and may also come with a 10% tax penalty if you are younger than 59 1/2.  Have a look at my previous post on this topic.  
6. A credit card loan. One of the best bad choices.  Look at your statement – there is probably an initial fee of 1 or 2% on the amount of the loan, and then the interest rate charged on the loaned amount may be higher than that on purchases.  And what’s more you generally cannot designate how much of your payment goes to repay the loan and how much to repay purchases. 
7. A payday loan. These places are all over town – Envios de dinero.  Usurious interest rates.  Typically, you leave the place with cash, but you leave them a post-dated check, which they will deposit when the loan is due, which will correspond to your next direct deposit of your salary.  You need to be able to demonstrate current employment by submitting paystubs. 
8. A loan shark. Look up the word vigorish.  It generally refers to the rate of interest charged by a loan shark.  Watch a 40’s gangster movie, and one gangster will ask another:  What’s the vig?  You need to borrow $1000?  The vig is 40%.  You get $600, and need to repay $1000, with interest accruing at 40% on the full $1000.  And the loan shark can decide to call the loan at any time.  And send someone out named Vito or Rocco to break your legs if you don’t pay.
9. Care to bash an old lady over the head to steal her purse?  Only old people carry cash these days, and they are less likely to fight back.  Do it in a place where you’re sure there are no security cameras.  And have absolutely no scruples or personal ethics or regard for your fellow man. 
10. Armed robbery. Yes, you can knock over a convenience store.  Happens every day.  Significant risk of gaining a criminal record and/or jail time, and limited upside potential as they make periodic cash drops into the safe throughout the day.  Still, the whole thing could be over within 5 minutes or less, and you have your money.

Now I ask you:  isn’t it easier and simpler to just establish and save into your own emergency fund?  Yes, it takes forethought, planning, and self-discipline, but I submit to you that these will give far better outcomes than many of the choices above. 

Questions?

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