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Old 10-08-2008, 07:00 PM   #1
Emman
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Default Should we obtain cash from our line of credit?

I have a savings account where I put 10% of my net income to earmark for my Roth IRA. I have recently taken out all my money from that account (about $3000) and stuffed it in my mattress so to speak. From what I have been gathering, it is imperative to obtain enough cash to get by for a month or two in case the banks close. I've been telling friends to get cash now.

I have a question that I would like to put out there:

I have over $10000 available in a line of credit. Should I get a cash advance of say, $1000-2000 or whatever? I don't like to dip into my credit, but I am wondering if I should just get whatever cash I can get my hands on right now just in case banks close and nothing is accessible. Thoughts??

Thanks......
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Old 10-08-2008, 07:07 PM   #2
Adarajones
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Default Re: Should we obtain cash from our line of credit?

Hey Enman,

I am in the same boat. I would love to get any suggestions on that as well!


Best regards!!!
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Old 10-08-2008, 07:09 PM   #3
ctophil
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Default Re: Should we obtain cash from our line of credit?

Quote:
Originally Posted by Emman View Post
I have a savings account where I put 10% of my net income to earmark for my Roth IRA. I have recently taken out all my money from that account (about $3000) and stuffed it in my mattress so to speak. From what I have been gathering, it is imperative to obtain enough cash to get by for a month or two in case the banks close. I've been telling friends to get cash now.

I have a question that I would like to put out there:

I have over $10000 available in a line of credit. Should I get a cash advance of say, $1000-2000 or whatever? I don't like to dip into my credit, but I am wondering if I should just get whatever cash I can get my hands on right now just in case banks close and nothing is accessible. Thoughts??

Thanks......
Hi Emman,

I would suggest you use that line of credit to purchase stuff that are tangible. Some examples are non-perishable food and gas, gold (if you can get your hands on any), and silver. Now, gas prices (because of less demand for oil) will go down a lot in the next week or so (probably to less than $3.00 per gallon), which is a great time to stock up on that. However, it will skyrocket to shocking prices very soon when the dollar loses more value by the day. As soon as the dollar crashes, you won't be able to afford any of these things! I hope that helps.

-Phillip
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Old 10-08-2008, 07:15 PM   #4
Steve_A
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Default Re: Should we obtain cash from our line of credit?

Hi Emman,

It looks as though you've been reading my mind!

I would only use credit cards for interest free deals on things that I need. For example today (really) I went out and bought a new notebook. It was still at the same price as it was last week and was being offered over thirteen months (twele equal payments) with no interest. If the economy goes bust, or inflation over here rises like wildfire, or the dollar becomes stronger against the local currency, I will still pay the same initial amount over the twelve months.

Tomorrow, beleive it or not I will be looking for a new car with fixed payments. That way if inflation breaks out or once again the hard currencies rally against the Real, my fixed payment would be protected. I was expecting to buy one in another three months when I finished paying off the one I have. However, I reckon the best case scenario in another three months will be a rise in prices in local currency and/or a huge rise in interest rates (we already have the highest rates of interest in the world over here in Brazil), so I will be looking to 'get in quick', the last three payments of this car can be rolled over for the next one as this car will be used as part exchange.

So what I'm trying to say is that you should only get what you would normally get anyway so that if the best case scenario comes to be, you would pay off your debt in the normal way, but it needs to be done either interest free or fixed rate.

Don't make the mistake of the guy who was told by doctors he had terminal cancer and went and maxed out all is credit cards and took out rediculous loans. Did he end up with egg on is face when the doctors told him they had made a mistake. I belieive he's still paying off the debt.

Best regards,

Steve


Quote:
Originally Posted by Emman View Post

I have a question that I would like to put out there:

I have over $10000 available in a line of credit. Should I get a cash advance of say, $1000-2000 or whatever? I don't like to dip into my credit, but I am wondering if I should just get whatever cash I can get my hands on right now just in case banks close and nothing is accessible. Thoughts??

Thanks......
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Old 10-08-2008, 07:15 PM   #5
Jonah
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Default Re: Should we obtain cash from our line of credit?

F' it. might as well live it up now. buy some tools and supplies needed to ride it out. Water purifier's are expensive. This is also good to boost moral. Eat sushi for a few days. Trust me you'll feel better.
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Old 10-08-2008, 07:25 PM   #6
Emman
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Default Re: Should we obtain cash from our line of credit?

Thanks, ctophil.

At this point I have pretty much gotten whatever tangible supplies we will need. I've been stockpiling supplies, food, and water for the past few months. The other day we spent several hundred dollars at Costco, Lowes, and other stores to stock up on basic stuff. Stuff like toliet paper, medicines, soap, gasoline (have 24 gallons in the garage in gas cans), flashlights, basic tools, first aid, water purifier filter, etc. We have about 4-6 months of freeze dried food at 3 meals a day for my family of 4. I'm thinking that I should buy more freeze dried food if I can. We just emptied our hot tub and put fresh water into without treating it. It's basically about 400 gallons of potable water. We're not going to use the hot tub for a while if at all depending upon what happens.

So, we're basically as ready as we can be. We can hold out for a minimum of 4 months and probably up to 6 months.

Right now, I think that cash is something I should have on hand when all the banks shutter up. I just wonder if I should just get it from my credit line while I can......
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Old 10-08-2008, 07:28 PM   #7
davefla73
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Default Re: Should we obtain cash from our line of credit?

I guess known of you, listened to George Green, or beleave anything he said , because he said to get out of dept now why you still can, dept is the reason why this is all happening, and it might be use to your disadvantage.
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Old 10-08-2008, 07:34 PM   #8
Zarathustra
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Default Re: Should we obtain cash from our line of credit?

One thing to consider is that you are likely to see lines of credit, in addition to credit cards, frozen at some point in time.
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Old 10-08-2008, 07:36 PM   #9
Steve_A
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Default Re: Should we obtain cash from our line of credit?

Hi davefla73,

To a certain degree you and George Greene are right. That's because your flexible friend as a variable rate and can fluctuate from month to month (check out your credit card contract on the reverse side of your statements). If you get into 'normal' credit card debt and roll it over, you could get really screwed.

However, interest free payments and fixed amount payments are exactly that.
No probs. I never leave home without mine.

Of course you would have to be certain that your source of money was stable to keep up with the payments.

Best regards,

Steve


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Originally Posted by davefla73 View Post
I guess known of you, listened to George Green, or beleave anything he said , because he said to get out of dept now why you still can, dept is the reason why this is all happening, and it might be use to your disadvantage.

Last edited by Steve_A; 10-08-2008 at 07:39 PM.
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Old 10-08-2008, 07:36 PM   #10
Emman
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Default Re: Should we obtain cash from our line of credit?

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Originally Posted by davefla73 View Post
I guess known of you, listened to George Green, or beleave anything he said , because he said to get out of dept now why you still can, dept is the reason why this is all happening, and it might be use to your disadvantage.

I hear you about that. But, right now, we cannot pay off all our debt, which we would love to do as anyone would. At this point it doesn't seem pragmatic to take whatever cash we have to make big credit card payments.
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Old 10-08-2008, 07:39 PM   #11
Emman
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Default Re: Should we obtain cash from our line of credit?

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Originally Posted by Zarathustra View Post
One thing to consider is that you are likely to see lines of credit, in addition to credit cards, frozen at some point in time.

That's what I am concerned about, therefore, we would have no access to getting more cash.....
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Old 10-08-2008, 07:40 PM   #12
ctophil
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Default Re: Should we obtain cash from our line of credit?

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Originally Posted by davefla73 View Post
I guess known of you, listened to George Green, or beleave anything he said , because he said to get out of dept now why you still can, dept is the reason why this is all happening, and it might be use to your disadvantage.
Well, all of us are in debt one way or another. As long as you still use the dollar as your currency, you are in debt. Check out the Zeitgeist movie: http://www.zeitgeistmovie.com

Another thing, all the banks are in DEEP trouble. There are a lot of things that they are not telling you. So my suggestion is that if you have a line of credit, use it before they cut off your credit. Some banks are not even loaning money to each other....why would you think your line of credit will last much longer? This message is to Emman. Enough said.

-Phillip
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Old 10-08-2008, 07:43 PM   #13
Emman
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Default Re: Should we obtain cash from our line of credit?

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Originally Posted by ctophil View Post
Well, all of us are in debt one way or another. As long as you still use the dollar as your currency, you are in debt. Check out the Zeitgeist movie: http://www.zeitgeistmovie.com

Another thing, all the banks are in DEEP trouble. There are a lot of things that they are not telling you. So my suggestion is that if you have a line of credit, use it before they cut off your credit. Some banks are not even loaning money to each other....why would you think your line of credit will last much longer? This message is to Emman. Enough said.

-Phillip

Thanks for the input, man....
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Old 10-08-2008, 07:44 PM   #14
Jonah
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Default Re: Should we obtain cash from our line of credit?

That would just be dumb. There is now way to tell how or when it is going to fall off. Listen to what your intuition tells you. Besides what would they want with our credit if the dollar is worth zero???
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Old 10-08-2008, 07:55 PM   #15
Emman
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Default Re: Should we obtain cash from our line of credit?

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Originally Posted by Vorian's Revenge View Post
That would just be dumb. There is now way to tell how or when it is going to fall off. Listen to what your intuition tells you. Besides what would they want with our credit if the dollar is worth zero???

My intuition tells me to ask you folks about this.

This is what I think may happen soon: the banks will go on a holiday and will be closed. There will be a panic to get money. The ATMs will be down. The folks that do not have any cash with them (because so many of us use debit cards now) will be in tough bind. These folks will not have any money to buy gasoline or food in the short run. Most people don't have more than a week of food in their home. Therefore, having cash on hand will be imperative for the initial days or weeks of survival. Stores and services may be shut down, but there will probably be some stores and gas stations operational until they sell off all their inventory. But they will be only on a cash basis as plastic will not be working. This is the scenario that I think will happen based upon everything I've read and seen on Camelot; my interpretation.
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Old 10-08-2008, 08:02 PM   #16
truth-freedom
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Default Re: Should we obtain cash from our line of credit?

OK, I have a question regarding the whole credit issue. I've been researching the economic situation, trying to understand the steps taken that got the US (and other nations) in this mess. It seems to me that people/households purchasing things on credit (whether it be a home with very little to no down payment or extravagances) is THE root cause of this whole issue.

I was raised that you do not purchase ANYTHING with credit unless it is an absolute necessity. If you buy a home, you gotta put 30% down and NEVER get a home equity loan. Same thing with a car. Gotta make a substantial down payment. Above all else, LIVE WITHIN YOUR MEANS. You know, delayed gratification. So many people/families I know spend their credit as if they are never going to have to pay it back. Lots of people don't even look at their actual balances but just try to forget how miserably in debt they are.
With the whole 'predatory lender' discussion, I agree people were given loans they really could not afford and mortgage institutions should not have done this. But the people who signed on the dotted line bear just as much responsibility.

So my question is, if someone does use his/her credit for a cash advance at this time, is that not making the situation worse? It's like having the attitude that "what one person does will not affect the whole" or "screw how it affects others because I'm out for myself"? How is doing more of what caused this crisis going to help the crisis?

It's like the Karmic cycle. We, as a whole, have been consuming and consuming without having earned what we consume. The Chinese and Japanese have been doing the work (when you look at it globally) AND taking on our debt. They have been working hard producing and we have been arrogantly consuming way more than we deserve and the tipping point has finally been reached.
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Old 10-08-2008, 08:03 PM   #17
ctophil
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Default Re: Should we obtain cash from our line of credit?

Quote:
Originally Posted by Emman View Post
My intuition tells me to ask you folks about this.

This is what I think may happen soon: the banks will go on a holiday and will be closed. There will be a panic to get money. The ATMs will be down. The folks that do not have any cash with them (because so many of us use debit cards now) will be in tough bind. These folks will not have any money to buy gasoline or food in the short run. Most people don't have more than a week of food in their home. Therefore, having cash on hand will be imperative for the initial days or weeks of survival. Stores and services may be shut down, but there will probably be some stores and gas stations operational until they sell off all their inventory. But they will be only on a cash basis as plastic will not be working. This is the scenario that I think will happen based upon everything I've read and seen on Camelot; my interpretation.
Emman,

Andy Gauss (Economic Historian) had an interview on Coast to Coast am last week. And he said that it's better if you live in debt at this point and don't pay off your mortgage. Interesting observation. I have the .mp3 if you want me to upload to youtube or something. I can't seem to find it on the net anymore.

-Phillip
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Old 10-08-2008, 08:06 PM   #18
Emman
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Default Re: Should we obtain cash from our line of credit?

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Emman,

Andy Gauss (Economic Historian) had an interview on Coast to Coast am last week. And he said that it's better if you live in debt at this point and don't pay off your mortgage. Interesting observation. I have the .mp3 if you want me to upload to youtube or something. I can't seem to find it on the net anymore.

-Phillip
Hi Phillip,

I caught Andy Gauss on Rense the other night and he did say that, too. Thanks....
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Old 10-08-2008, 08:09 PM   #19
Sarahmay
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Default Re: Should we obtain cash from our line of credit?

I think it is important to live with integrity no matter what happens. Purchasing through credit something you have no intention or ability to pay back is not living with integrity. In the end, your character may be all you have left!
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Old 10-08-2008, 08:13 PM   #20
Emman
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Default Re: Should we obtain cash from our line of credit?

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Originally Posted by truth-freedom View Post
OK, I have a question regarding the whole credit issue. I've been researching the economic situation, trying to understand the steps taken that got the US (and other nations) in this mess. It seems to me that people/households purchasing things on credit (whether it be a home with very little to no down payment or extravagances) is THE root cause of this whole issue.

I was raised that you do not purchase ANYTHING with credit unless it is an absolute necessity. If you buy a home, you gotta put 30% down and NEVER get a home equity loan. Same thing with a car. Gotta make a substantial down payment. Above all else, LIVE WITHIN YOUR MEANS. You know, delayed gratification. So many people/families I know spend their credit as if they are never going to have to pay it back. Lots of people don't even look at their actual balances but just try to forget how miserably in debt they are.
With the whole 'predatory lender' discussion, I agree people were given loans they really could not afford and mortgage institutions should not have done this. But the people who signed on the dotted line bear just as much responsibility.

So my question is, if someone does use his/her credit for a cash advance at this time, is that not making the situation worse? It's like having the attitude that "what one person does will not affect the whole" or "screw how it affects others because I'm out for myself"? How is doing more of what caused this crisis going to help the crisis?

It's like the Karmic cycle. We, as a whole, have been consuming and consuming without having earned what we consume. The Chinese and Japanese have been doing the work (when you look at it globally) AND taking on our debt. They have been working hard producing and we have been arrogantly consuming way more than we deserve and the tipping point has finally been reached.

I appreciate your philosophical point about using credit.

However, my question is not about living outside my means or instant gratification. I concur and agree with your points on that that we shouldn't do that. I'm just wondering if I should get a cash advance from my credit line while I still can for survival's sake. This money would not be spent on anything other than the emergency event that we know is coming down the pike. If things do improve and somehow there is turnaround, then I would put the cash back into my credit line, and also put the $3000 dollars earmarked into my Roth IRA that I took out of my savings account back in.

I think I'm getting an idea of what I should do.

Thanks for all this input so far, everyone!
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Old 10-08-2008, 08:16 PM   #21
Average Joe
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Default Re: Should we obtain cash from our line of credit?

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Stuff like toliet paper, medicines, soap, gasoline (have 24 gallons in the garage in gas cans), flashlights, basic tools, first aid, water purifier filter, etc.
I hope your garage doesn't get struck by lightning.
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Old 10-08-2008, 08:16 PM   #22
ctophil
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Default Re: Should we obtain cash from our line of credit?

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Originally Posted by Sarahmay View Post
I think it is important to live with integrity no matter what happens. Purchasing through credit something you have no intention or ability to pay back is not living with integrity. In the end, your character may be all you have left!
I believe that when your family and your own life depends on it, integrity would be the last thing on my mind. But definitely try to pay your debts when you can. Just pay the minimum though. Don't go and pay off your balances. That's just not wise at this point.

-Phillip
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Old 10-08-2008, 08:20 PM   #23
Emman
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Default Re: Should we obtain cash from our line of credit?

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I think it is important to live with integrity no matter what happens. Purchasing through credit something you have no intention or ability to pay back is not living with integrity. In the end, your character may be all you have left!

My intention is not to take the money and not pay it back.

My question is simply a survival question: do I get a cash advance on my line of credit while I still can?

There is another thread where Merlyn posts an advice from Jim Sinclair who says to have enough cash on hand for at least one or two months. That is my motive: to make sure we have enough cash on hand for that long. I don't want to dip into credit....but....since I don't have an extra two months of cash from my income handy, I have to consider the option of obtaining it with my credit means.

Thanks.....
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Old 10-08-2008, 08:22 PM   #24
Emman
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I hope your garage doesn't get struck by lightning.


I know...I hear you....I don't intend to stock more gas...just enough to fill up a couple gas tanks for our vehicles. The gas is stored in 5 gas cans altogether.
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Old 10-08-2008, 08:30 PM   #25
Sarahmay
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Default Re: Should we obtain cash from our line of credit?

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Originally Posted by Emman View Post
My intention is not to take the money and not pay it back.

My question is simply a survival question: do I get a cash advance on my line of credit while I still can?

There is another thread where Merlyn posts an advice from Jim Sinclair who says to have enough cash on hand for at least one or two months. That is my motive: to make sure we have enough cash on hand for that long. I don't want to dip into credit....but....since I don't have an extra two months of cash from my income handy, I have to consider the option of obtaining it with my credit means.

Thanks.....
Ah, I understand. Do what you feel is best.
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