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10 Tips for Lending (or Borrowing) Money

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According to a 2013 survey by American Consumer Credit Counseling, 82 percent of Americans polled would let a relative borrow cash if asked (and 66 percent said they'd loan money to a friend). If you find yourself in a position where you need to involve family or friends to alleviate a financial burden, heed the following advice from Bruce McClary, Vice President of Communications for the National Foundation for Credit Counseling (NFCC), and Lynnette Khalfani-Cox, a personal finance expert and author of Zero Debt: The Ultimate Guide to Financial Freedom.

1. IF YOU WANT TO SAY YES, ASK YOURSELF WHY.

According to Khalfani-Cox, too often people are wary of turning down a request to loan money because they’re afraid of straining a personal relationship or being seen as selfish or uncooperative—all poor reasons to say yes. “Nobody’s relationship should depend on a person’s ability to loan money,” she says. “If a ‘no’ would hurt it, it might not be on as strong a foundation as you thought.” She also cautions against loaning money because you enjoy being generous. “Some people may feel like a hero, like they’re coming to the rescue. That’s an emotional choice, not a financially prudent one.”

2. CONSIDER AN ALTERNATIVE.

A cursory refusal could conceivably lead to hurt feelings. If you decline someone’s request for money, elaborate on the steps the borrower could take to resolve the situation themselves. “The best way for people to decline a loan request is to be honest about it and offer a solution,” Khalfani-Cox says. “If someone wanted to borrow $5000 for equipment for a start-up company, you could say, ‘I can’t help you with this, but have you considered renting the equipment?’”

3. PREPARE A WRITTEN AGREEMENT.

While no relatives should be treating each other like a bank, it’s not a bad idea to treat the transaction as though you were sitting in one. A written agreement, or promissory note, can detail the terms of the exchange, including the amount, a repayment schedule, and under what circumstances the lender would forgive the loan. “It can also establish what the consequences are for not repaying,” McClary says. “You can get it notarized, which makes the agreement more enforceable.”

4. CONSULT WITH YOUR SPOUSE.

It’s not typically necessary to huddle with your husband or wife before loaning or borrowing $50, but any sizable amount should probably be discussed with a significant other before committing. If he or she disagrees with the decision, it could lead to some stressful conversations down the road. “I can’t tell you how many times parents have regretted loaning money to their kids because it created stress and friction in their own households,” Khalfani-Cox says.  

5. DON’T DIP INTO YOUR RETIREMENT FUND.

Khalfani-Cox has been a consultant for the American Association of Retired Persons (AARP) for five years and has seen lenders dip into their secured funds to satisfy loan requests. It’s a mistake, she says. “It’s fiscally imprudent to dip into retirement savings, sell stock, or forego contributions. If it hurts you, then you don’t really have the money to give.”

6. DON’T GET HUNG UP ON HOW THE MONEY IS SPENT.

Most relatives and friends aren’t going to tell you they need money for a new roof when they secretly want to beat the house in blackjack. But cash earmarked for home improvements might suddenly need to be diverted for reasons that seem important to the borrower. If the loan doesn’t wind up being spent the way you thought, it doesn’t do you much good to dwell on it. “If they deviated, there was probably good reason," Khalfani-Cox says. "It’s not your place to micro-manage every element.” 

7. CHARGE INTEREST.

“The reason people approach family is because they feel they have some latitude in taking longer to repay,” McClary says. “Charging interest helps communicate how seriously you’re taking the loan.” In addition to being a persuasive way to get paid back in a timely fashion, charging interest is required by the Internal Revenue Service (IRS) to avoid unfavorable gift tax circumstances. The interest should be based on the current applicable federal rate—usually low—and then reported as income on your tax return. (If it’s not repaid, that can mean it’s considered a gift, which carries a separate laundry list of income responsibilities for both you and the borrower. Check with a local attorney for specific state and federal guidelines.)

8. REALIZE WHY THEY CAME TO YOU IN THE FIRST PLACE.

If your terms aren’t much different from a conventional loan from a financial institution, there’s really only one reason a relative or friend would come to you: No bank considers them a good credit risk. “If someone is asking for money, it shows you there’s already an issue,” Khalfani-Cox says. “You may never get it back, so if you’ll harbor hard feelings about that, think twice.”

9. SPELL OUT HOW AND WHEN THE MONEY SHOULD BE PAID BACK.

Is the borrower expected to pay the lender back in one lump sum or in installments? Is it due within a year or within three? Will they be getting cash, checks in the mail, or in person? The more detail you confirm in the written agreement, the less risk there is for confusion. “Spell out that you expect payments on schedule, that you're lending them this much, and in the end, you’re collecting this much in principal and interest,” McClary says. “Structure the terms as specifically as possible.”

10. DON’T BE AFRAID TO SAY NO.

While most people want to help out someone in a jam, Khalfani-Cox says that it’s a mistake to assume the worst-case scenario will come to pass if you decide not to. “If your brother wants $200 so his cell phone doesn’t get shut off, there are only a few outcomes. He goes to someone for help, he comes up with the money on his own, he makes a deal with the phone company, or his phone gets disconnected. In three of the four outcomes, it got resolved in a good way without you having to step into it. Usually, there’s another option or solution.”

All images courtesy of iStock.

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Switzerland Flushes $1.8 Million in Gold Down the Sewer Every Year
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Switzerland has some pretty valuable sewer systems. As Bloomberg reports, scientists have discovered around $1.8 million worth of gold in the country's wastewater, along with $1.7 million worth of silver.

Scientists at the Swiss Federal Institute of Aquatic Science and Technology examined sewage sludge and effluents, or discharged liquid waste, from 64 water treatment plants and major Swiss rivers. They did this to assess the concentrations of various trace elements, which are "increasingly widely used in the high-tech and medical sectors," the scientists explained in a press statement. "While the ultimate fate of the various elements has been little studied to date, a large proportion is known to enter wastewater."

The study, which was recently published online in the journal Environmental Science & Technology, revealed that around 94 pounds of gold makes its way through Switzerland's sewage system each year, along with 6600 pounds of silver and high concentrations of rare metals like gadolinium and niobium. For the most part, these metals don't harm the environment, researchers say.

With gold and silver quite literally flowing through their sewers, is there any way that Switzerland could turn their wastewater into wealth? Scientists are skeptical: "The recovery of metals from wastewater or sludge is scarcely worthwhile at present, either financially or in terms of the amounts which could be extracted," the release explains.

However, in the southern canton of Ticino, which is home to several gold refineries, the "concentrations of gold in sewage sludge are sufficiently high for recovery to be potentially worthwhile," they conclude.

Switzerland is famous for its chocolate, watches, and mountains, but it's also home to major gold refineries. On average, around 70 percent of the world's gold passes through Switzerland every year—and judging from the looks of it, much of it goes down the drain. As for the sewer silver, it's a byproduct of the chemical and pharmaceutical industry, which is a cornerstone of Switzerland's economy.

[h/t Bloomberg]

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14 Things You Owned in the '70s That are Worth a Fortune Now
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DON EMMERT/AFP/Getty Images

From old toys and housewares to books and records, these pieces of '70s memorabilia have aged (and increased in value) like fine wine.

1. THE LORD OF THE RINGS KNICKERBOCKER PLAYSET

A vintage ringwraith toy from Lord of the Rings by Knickerbocker toys, still on the yellow blister pack.

eBay user butamaru999

Peter Jackson wasn’t the first one to take a crack at J.R.R. Tolkien’s The Lord of the Rings trilogy. In 1978, Ralph Bakshi directed an animated version with the voices of John Hurt, William Squire, and Anthony Daniels, among others. There was a toy promotion to go along with the movie, of course, and though the action figures look a little cheap by today’s standards, they’re anything but. According to eBay, a complete set can sell for up to $17,000.

2. DAVID BOWIE’S DIAMOND DOGS ALBUM

Photo of David Bowie
RALPH GATTI/AFP/Getty Images

Check your old vinyl! In 1974, David Bowie released the Diamond Dogs LP, which featured artwork of a cartoonish Bowie-dog. The top half of the creature was Bowie, while the bottom half was all canine—including its genitals. Right before the album was released, RCA decided to avoid controversy and had the artwork retouched to remove the offending parts. However, some enterprising employees were able to snag some of the originals, and in 2003, one of them sold for $3550.

3. LUKE SKYWALKER ACTION FIGURE

Luke Skywalker action figure still in the Kenner packaging from the 1970s.
DON EMMERT/AFP/Getty Images

OK, you probably didn’t own this exact Luke Skywalker action figure with double-telescoping lightsaber when you were a kid, because there are only 20 known toys in existence. If you are one of the lucky few, though, get thyself to Sotheby’s: In 2015, this 1978 Kenner toy sold for a whopping $25,000.

Even if you don’t own this ultra-rare figure, don’t despair: Your old Star Wars toys could still be worth hundreds—or even thousands—of dollars.

4. THE SEX PISTOLS’S “GOD SAVE THE QUEEN”/“NO FEELINGS” 45

The Sex Pistols
Graham Wood/Evening Standard/Hulton Archive/Getty Images

The infamously offensive Sex Pistols signed to A&M Records in 1977—and were dropped by the label exactly six days later for proving to be just too much to handle. But in those six days, 25,000 copies of the band’s “God Save the Queen” single had already been pressed. Just nine copies have surfaced over the years, making the rare records worth a pretty penny: In 2003, a copy with the paper sleeve sold for £13,000 (about $17,600).

5. WALK LIVELY STEFFIE BARBIE

Walk Lively Steffie doll

Image courtesy of bklyngrl44 on eBay

Remember Barbie’s friend from the 1970s, Steffie? Not many people do—which may be why a mint condition Walk Lively Steffie doll that's still in its box can be worth nearly $800.

6. THE GARDEN OF ABDUL GASAZI BY CHRIS VAN ALLSBURG

A copy of The Garden of Abdul Gasazi

Your book collection provides you with hours of entertainment, and can also be a great source of extra income. A first edition of The Garden of Abdul Gasazi, a 1979 children’s book by Chris Van Allsburg, is worth nearly $1000 (if it's in “Fine” condition). If you have a collection of Van Allsburg first editions, by the way, you’re doing well: A first edition of Jumanji from 1981 is worth hundreds, if not thousands, and a signed first edition of The Polar Express from 1985 is worth $2500.

7. ONE HUNDRED YEARS OF SOLITUDE BY GABRIEL GARCÍA MÁRQUEZ

The green, floral, leafy cover of the first edition of One Hundred Years of Solitude.
Image courtesy of cnos.mich on eBay

Who knew an exclamation point was worth so much? In some early copies of Gabriel García Márquez’s One Hundred Years of Solitude, the first paragraph of the dust jacket blurb featured an exclamation point instead of a period. That little mistake makes a first edition with the exclamation point worth $740. (Even the version with the intended period is worth some cash, though—about $400.)

8. LIMITED EDITION VERSION OF THE FIRST STAR WARS COMIC BOOK

Star Wars Comic Book
Image courtesy of heisman1944 via eBay

Here’s a riddle for you: When is five cents worth $7500? Answer: When rare Star Wars memorabilia is involved. When the first issue of the Star Wars comic book was released in 1977, Marvel published about 1500 limited edition copies for 35 cents instead of the usual 30 cents. Spending that extra nickel 40 years ago is worth more than $7000 today—and there’s currently one on eBay being sold for more than $10,000.

9. REMCO BATMAN UTILITY BELT

A vintage Batman utility belt stilli n packaging, with plastic handcuffs, decoders, and watch.

This Remco Batman Utility Belt from the 1970s came with all of the bells and whistles: a communicator, decoder glasses, a toy watch, handcuffs, a Gotham City decoder map, a secret identity card, and a secret message, among other things. Not only is it cool, that’s a lot of little pieces to keep track of, so you can see why a complete set in decent condition sells for more than $3000.

10. ALPINE MAN PEZ DISPENSER

Image courtesy of tobor1010 via eBay

To commemorate the 1972 Olympics in Munich, PEZ released the “Alpine Man” Pez Dispenser. There were two variants—a mustachioed figure in a green Alpine hat and a clean-shaven one wearing a brown cap. The green hat can be worth up to $3000; the brown one is worth “considerably more,” but is apparently so extremely rare that no pricing seems to actually exist.

11. ORIGINAL MEGO ROBIN ACTION FIGURE

Tom Simpson, Flickr // CC BY-NC-ND 2.0

The Mego company doesn’t produce action figures anymore—it went bankrupt in 1982—but for a decade, it was considered “The World’s Greatest Action Figure Company.” Many of their figures are worth a nice chunk of change today, but the original Robin the Boy Wonder figure from 1973 takes the cake. The first version came with a removable mask, while later versions came with the mask painted on. As you might imagine, that teeny little piece of cloth was often lost by the kids who played with the toy, so finding a Robin in good condition with the mask is pretty rare; one sold for $7357.

12. IKEA FURNITURE

A car topped with boxes of IKEA furniture
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IKEA has become known for their affordable furniture and housewares, but certain vintage pieces will set you back a bit more than a $9.99 LACK table. Today, a teak bookshelf and cabinet combo from the 1970s can fetch up to $3000—surely a good return on investment.

13. PYREX DISHES

A green Pyrex mixing bowl with red ribbons and holly on it, sitting on top of three pyrex collecting books.

Image courtesy of qualityqueen62 via eBay

Your parents and grandparents shouldn't have passed those Pyrex dishes down—they're worth a lot of dough these days. Whole sets of certain patterns or colors can go for thousands of dollars, but even single bowls can fetch hundreds, like the above Christmas bowl from the early '70s, which is going for $370 on eBay.

14. THE ADDAMS FAMILY LUNCHBOX

They’re creepy and they’re kooky ... and they’re worth a lot of money. This metal lunchbox by King Seeley depicts the cartoon version of everyone’s favorite ooky sitcom family. A good-condition set containing the lunchbox and matching thermos can be worth up to $325.

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