Cash is king. Cash is capital, in small, unmarked bills. Almost nothing speaks louder at the negotiating table. It says: “I have the means, right now, to buy from you.”
Because it speaks so loudly, there are great deals to be had if you can pay cash. Here are a few:
- Real estate. The somewhat filthy- to super-rich investor can swoop in on some incredible deals, or provide liquidity for others who don't have enough to satisfy everyone in the selling process. Since there is no need for a cash-only buyer to satisfy a bank, the transaction can be cheaper and faster. I've heard of financing-contingent deals getting derailed with cash offers. A large cash deposit at a local bank could also get the attention of the distressed properties manager there.
- Initial deposit bonuses. Brokerages have run deals of $200 or more for opening a new brokerage account. The catch? You'll need a bit of cash ($10,000 or more) to get the bonus. But $200 is enough for a round lot of some stocks. The same goes for online savings accounts; the bonus only get credited if the minimum balance threshold is maintained for the required time.
- Cars and other big-ticket items. By going at the right time — like when quarterly sales quotas need to be met by salespeople — you can negotiate aggressively with cash. They'll help you out if you make it clear that you're helping them out.
- Promotional period deals. Rewards credit cards sometimes have pretty nice promotional rewards rates. Sometimes they're so good that they're almost begging to be taken advantage of. Joe Taxpayer snagged such a deal: “10% on all gas, grocery store, and drugstore purchases for the first 90 days.” He successfully bought $50,000 worth of Visa gift cards with that credit card during the trial period, and paid off the credit card bill in full each time. This generated over $4,000 in rebates — just because he had the cash to pay off the credit card bills without carrying a balance.
OK, rich people 🙂 Have you used your wads of cash for other kinds of bargains?
This article was included in the Carnival of Personal Finance #382.