5 Avenues Of Cash Funds We Often Overlook

It is like a contagious virus that the mass media passed onto us. Whenever we need an injection of cash, the first place we think about is the bank. Nothing appears more obvious that than. However, in many cases, the truth can be stranger than fiction.

Remember the time when you went through some laundry and found dollar notes in your pockets? It felt like free money doesn’t it? Because in your mind, you do not have that money. And to find them when you forgot you had them felt like a winning lottery ticket.

Well when we talk about bigger amounts of money, there are circumstances that are alike. You might be sitting on it now.

Borrow against your life insurance

If you had bought life insurance, there is a good chance that you have one with a cash value. It’s a very popular option and you probably got tempted into it when you first bought that policy.

A life insurance plan with cash value allows you to borrow from it. You get cash by borrowing from yourself. Neat.

Sell your shares

You probably keep track of your portfolio is you are an active trader. But in many instances, we often hold shares or other liquid investments that we forgot about. The reason why we failed to notice them is because they are in small quantities and was never acquired using your investment funds.

Common such holdings include shares you got from your company benefits, government related shares given to citizens, shares you got for free when a holding company spun off a smaller business, etc. If you go through your financial cabinet, you might just find some of them waiting for you. And they might have appreciated greatly in value since you have forgotten about them a long time go.

Home equity borrowing

Many homeowners refuse to even entertain the thought of cashing in their home equity. It is a psychological block more than anything. Because getting a home equity loan or HELOC is like putting your family at risk. But if you think about it, it is a savvier choice compared to getting a personal loan.

Home equity loans are notorious at having interest rates lower than conventional loans. If you are going to borrow from the bank anyway, why not use your home as collateral for bigger quantum and lower rates. It’s your money anyway. In a way, you are using your own money and paying a small interest for getting access to it. It’s a logical choice.

Borrow from your retirement account

When you have worked for your employer for a number of years, you probably have some sort of pension plan or retirement account bursting at the seams. Common sense tells you that you won’t be able to draw on it until you reach retirement age. But that does not rule out borrowing from it.

The only way to know for sure is to check with your H.R manager on the terms governing your retirement account. But do check on the implications of going ahead with this before actually doing it. Penalties might make it a bad option to choose.

Borrow from family and friends

The problem with borrowing from the people around you is that there tend to be a problem enforcing the rules you agreed to. People flip flop all the time. Your reputation is also at stake.

This is the last option. But if there is enough trust in the family and the pros completely outweigh borrowing from a proper lender. Maybe this is a route you should seriously consider.