This completely innocent blogger has researched an ill-fated list of effective but semi-illegal ways to pay off student loans. Some desperados reading may reason when times get tough, the tough needs to get creative. I’ll dive into a list of cons as well as the pros of each.
Note: I define ‘semi-illegal’ as a general ‘slap on the wrist’ for something of with reasonable profit. I suggest no one go down this route; it should just be a fun read.
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The cause is nobler if you are trying to fund your education like the private education businesses that funded their pockets by selling you an overpriced education. I would not try this if you are trying to kill credit card debt because many of these gigs below need a level mind and good impulse control.
I’ll launch some statistic at you as an appetizer to ease the dissonance:
- A whopping total of 44.2 million Americans (the U.S. has a total population of 300 million) are saddled with student loan debt1.
- The delinquency rate of student loans hovers around 15%. Delinquency is when the borrower is 90+ days past due or in default2.
- The average student loan interest rate is higher than traditional mortgages3.
- The American student debt load is higher than our nation’s total mortgage debt and auto debt combined 4.
- 15% of students have over $100,000 in debt and as of 2012, there have been 8 billion dollars defaulted in student loans5.
- Millennials make up about 40 percent of the unemployment in the U.S.6
- Only 27% of graduates have a job in their chosen field of study 7. It might be my leftover teenage angst coming through but these are kind of bummer numbers so let’s begin.
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1. Freelancing For Cash (Under The Table)
Tracking cash is hard. Uncle Sam does not have the resources to track cash. That is one reason why cash is king. Side hustling under the table is beneficial to the employer because they can pay you less than the government allotted minimum wage. Although this does not mean they pass the savings onto you. Not very many employers compensate with cash but then again, not many employers are really running into the streets professing admission. Personally, I believe this happens often on a smaller level. Honestly, most of us have done this innocently. Have you ever baby sat for some extra cash? You were most likely paid under the table. But there are some real businesses who keep long-term employees under the table and that is illegal.
The pros of freelancing for cash is mostly tax-related.
There is no income tax, no state tax, no SSI or FICA tax. Consequently, it’s even easier because there is no HR department. No traces. No paperwork. The cash is liquid. Now, if you would like to triple your jail sentence, you can also claim other government benefits because on paper you are considered unemployed.
The cons of being ‘paid under the table’ are extremely serious. You face a large risk for audits than the average American. Federal auditors have the authority to go back up to 5 years if you fail to report any income so just because you got away with it one year does not mean you’re off the hook completely. If you live in the state of California, there is no audit limit. Suppose it’s 20 years later, the state of California still has the authority to audit you. So you will have to live in fear for that one day the taxman will come knocking down your door and asking for back taxes PLUS all the years of interest owed and compounded. To close: ouch!
I have not even begun to go into the hefty fines you might incur.
This is not something you need on top of your debt. You obviously will not have a tax refund. There is no severance of any sort. You definitely skip out on worker protection, worker benefits, and any sort of savings you might be able to add to a 401K or IRA. There is no retirement benefits or nest egg for you. You can be scammed by your employer with no recourse available. Another con is relatively straightforward: cash can be stolen or lost relatively easily. Once again, there is no justice for the culpable.
- No taxes what so ever
- Beneficial for the employer
- Can claim benefits of unemployment
- Jail time
- Hefty fine
- Long term audits
- No 401K or IRA contributions
- No worker protection
- Possibility of being scammed
- No repercussions for stolen cash
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2. Sugar Baby Set-Ups
According to a Sugar Baby interview from The Red And Black, while this doesn’t put you or the “client” inside a prison cell, things would go south quickly if the Sugar Baby fails to make due diligence. Not all clients will treat their Sugar Babies greatly, and if that happens, you should know how to say “no”. There is a risk involving this kind of business, but with precautions such as a Skype conversation can reduce the risk.
While I was in college, I was approached by this good-looking guy friend who was playing the nefarious matchmaker in a host of sugar baby setups. He asked me if I was interested. He had connections with some wealthy, older clients (from his father’s business, I presume) who wanted first access at some real college girls. A lot of girls liked him, he looked like a Brazilian River Phoenix, which helped. I was so naïve then, I thought he was pulling my leg. No way José.
A year later I saw a news report on the telly about the increasing number of sugar baby setups among college-aged girls.
Apparently, the amount of college debt students were acquiring made sugar babying a popular choice.
Ah! Supply meets demand and thus the official Seeking Arrangement website was born. I also vividly remember the cover story of a beautiful blonde T-148 law student who was looking for a sugar daddy to pay for her law degree. I tried my best to find that piece but it’s buried in the Internets. Most of the responses, if I recall, were relatively encouraging and I found the content humorous.
Pros of the sugar baby set up include high compensation and physical gifts as well; both can all be done under the table. Some women (and men!) might find it fun! It can be a confidence booster to some and an anxiety reliever for others who are suffering from a lot of debt. It can be argued in a sense that the set up is mutually beneficial. The level of entry is low since there is no seniority or experience required to become a sugar baby. It is usually a discreet setup and repercussions are uncommon. However, repercussions do happen from time to time and it may come to bite you back later.
The biggest con is the implicit danger of meeting strangers (online or offline).
It is a dangerous courtship and the nature of many of these relationships are typically not long-lasting. Arrangements can negatively affect your self-perception and lower your self-esteem as well. Not many parents will be happy to learn about these arrangements so you would have to keep hush. There are many other moral dilemmas too. Most noteworthy: what if your client’s married? In addition, there is always the chance of being scammed by the website or by your client.
- Good freedom and flexibility
- High compensation
- Compensation in cash or gifts
- Confidence booster
- Discreet for both parties
- Low level of entry
- Mutually beneficial
- Being scammed
- Not usually stable or long-term
- All the cons associated with being paid under the table
- Alters interpersonal relationships
- Moral dilemmas.
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3. Selling Drugs Or Alcohol
Although I live in the city of Seattle (which has legalized marijuana) there is still an ongoing argument about the legality of marijuana use between the people, the city, the state, and of course the feds.
Selling drugs is definitely an effective alternative that can pay off handsomely. If you are good at it then you can even become a billionaire! However, if you are bad at it (which is much more likely, no offense) you will literally destroy your life 100x times over.
Now think about prison, death, turf wars, addiction and there is definitely no easy way out of ‘the business.’ Besides drugs, you might pinch a few dollars by selling alcohol to minors but you won’t make a good living doing it for the risks involved.
Selling alcohol is a form of business and is legal. However, selling forbidden drugs isn’t, and if you both sell drugs and alcohol to minors, that would be a big cash grab if you’re not jailed. Most of the states treat these transactions as a misdemeanor, and penalties also vary as well. Jail time could be up to one year or less while fines can be up to several thousand dollars per penalties. Instead of in addition to a jail sentence, there might also be probations and liquor license revocation.
- High profit
- Cash compensation
- Turf wars
- No ‘quick’ exit
4. Selling Bootlegs Knock-Offs
“I wonder how Ella l got a DVD of ‘Finding Nemo’ when there is no DVD…..ohhhh.” – 9th Grade Me
Of course, selling counterfeit products is illegal. Selling a replica of an original product is a form of trademark infringement. Your two greatest pain in the neck, if you want to venture in this kind of shady business, will be:
- Being careful so the trademark owner will not catch you.
- If the trademark owner caught you, and you have to face the consequences.
- While the US Department of Justice doesn’t prohibit customers from buying fake products even with prior knowledge that it’s fake, the seller will face at least 10 years in prison and $2 million fine.
Whenever there is a large demand for something, the bootlegs and knock-offs instantly flood the market seemingly overnight to match demand. Someone out there is facilitating that baby. The bootlegs vary in the range of quality depending on the price. I knew a man who had posted thousands upon thousands of bootleg DVDs on Craig’s List. It seems innocent enough until word got around he made more than $100,000 doing it! Cash! The biggest sellers were ripped animes and rare Japanese uncensored films. He also made a fortune selling work-out videos like the p90x series. This was back in 2009.
The biggest pro to the bootleg business is the cash compensation. Although the cons of being paid under the table are all applicable here, you can potentially run it like a personal business with a lot of self-prescribed freedom. The start-up costs are usually low and the profit margins for knocks off and bootlegs are high. You can even wait for your customers to come to you.
The king con (see what I did there) is the gigantic risk and hefty fine (anywhere from $1,000 to $5 million) that you can acquire. Selling bootlegs and knock-offs means a definite chance of jail time. The risk is greater since many of your customers can rat you out. In addition, unlike a real business – there is no credibility in this line of work. Bottom line, don’t do it. If you want your own business and have some start-up capital I would look at other alternatives.
- Being paid in cash
- Low start-up cost
- Good profit margin
- No long hours
- No credibility
- Cons of being paid under the table
- Hefty fines
- Jail time
- Startup cost
Shoplifting is treated as a type of theft and is a crime. In its basic form, shoplifting is an act of taking goods or property which belongs to another person without permission. Although it is a criminal offense, the weight of your punishment (when you’re caught), depends on what you’re stealing.
If you’re stealing a pack of gum, chances are you’re just going to receive an earful of the sermon and a ban from the establishment. However, if you steal jewelry or a high-end electronic device (anything with a high value), you’re in for a felony shoplifting.
Charges for shoplifting are usually misdemeanor charges for petty theft, which can earn up to one year of jail time and a fine not more than $500. Felony shoplifting is a different subject, which can land you up to five years in prison and a fine that can go up to $5,000.
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You can make big money out of pure statistics prowess and talent of reading mind and emotions. When you know how to play cards, you can get a big sum of money in gambling. Gambling is a good way to get instant money in one single night and is a legal activity.
What makes gambling a bad idea is if it is illegal in the state where you’re playing or if you’re playing in an illegal casino operation. Only Hawaii and Utah ban gambling completely, while 22 US states allow lottery and horse betting. Penalties also depend on the state where you’re playing (or caught). Misdemeanor gamblings jail time can be up to a year or more, or just 20 days in jail, depending on the state. Felony gambling can go up to ten years and with fines that can go up to $20,000 or more.
7. Paid Prank
Believe it or not, there are actually services which offer paid pranks such as Fiverr. It is the safest way to earn money on this list, but it also has the lowest payout. Although Fiverr usually have a minimum of $5 per task, if the more elaborate the prank is, the more money you can get from it.
There is nothing illegal in doing a prank. However, if the prank affected a lot of people (e.g. Terrorist prank, bomb threat prank), this is where the cons start. In addition, if a prank goes wrong and someone was injured or died, or property is damaged, the prankster charged with criminal cases. Jail time and penalties will depend on the result of the prank gone wrong.
8. Card Counting
Card counting is a casino card strategy which is usually used in Blackjack games. What happens here is that the counter will create a tally of all the high and low valued cards. This decreases the house edge (or the advantage of the gambling house) and gives the player a better chance of winning by having a lesser risk to bet.
Although this activity is legal, this is frowned upon by casino houses. Using electronic devices to card count is seen as cheating and can lead to an arrest. When card counting became more than card counting (e.g. casino fights which are caused by card counting), arrests are possible, depending on the result.
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Pickpocketing is another kind of theft which usually happens when a person takes another person’s wallet or bag without force and without the knowledge of the person. There are a lot of ways to do this, but the two most common methods are going unnoticed or bumping the person to get his or her attention away from the pocket. This requires a lot of practice, and are sometimes taught by other people.
Just like in shoplifting, you can be charged with a misdemeanor or felony theft, depending on the amount of the wallet of the bag that you stole (if you’re caught). The charges are the same as shoplifting. What makes pickpocketing different is the chance to also get felony grand larceny which can give you five years or more in a correctional facility.
Hacking is another one thing you can do if you want to have a quick cash grab. It is important to choose the victim, as the success rate depends on the victim’s reaction. One of the most famous ways to hack a system right now is to deploy ransomware which makes the user’s data “hostages”. The hacker will demand money to release the user’s files. If the money is not sent within a certain amount of time, the data will be destroyed.
Not all people can do this because it requires vast technical knowledge. You can get as low as six months in prison and a $1,000 fine or up to 20 years in prison and up to $15,000 fine. This depends on the severity of your attack.
I hope this was uninspiring in every way. Do you want to share any stories from your morally questionable youth?
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Mustard Seed Money says
I feel like things tend to work out in the end. If you do illegal things in your youth, I feel like they normally catch up to you as you get older. While it may take some time in the long run I don’t think that crime pays off. I know there are outliers but I think most people overestimate their ability to remain undetected. Probably a big reason why there are so many people in jail.
Great point! Definitely not worths, Mr. MSM!
Working Optional says
“This completely innocent blogger…” – I like the way you start this off 😉
Interesting take on a topic that I’m sure some may consider for a fleeting second at some point in their lives – even though they may not admit it to themselves. Of course, then the morals and realization of the consequences hopefully kick in. Thanks for bringing this up – awareness is always a good thing.
Xyz from Our Financial Path says
Hey, there’s some good tips in here, not that I would know 🙂
Lolololol this comment! Thanks Ms. XYZ 🙂
Jeff @ Maximum Cents says
It’s worth noting that these ways to make money are usually not worth it. Get rich quick schemes don’t work because the large percentage of failures that result. In a similar way these are not worth it because of the negative consequences like fines or jail time.
Sugar baby set ups are OK I think but parents probably won’t like it :p
Adam @ Minafi says
Laughing out loud reading this post (hopefully that’s mostly intentional). All good advice, and in college I don’t think there’s anything on this list I would have been above doing – but now am glad I didn’t.
One more to add to the list: fake your own death.
OH that’s brilliant! Fake death, move to Thailand = Freedom. Easy!
Tamara Krause says
Here’s another way, but totally legal…