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Is There Really Such a Thing as Free Money?

"Free money" may require an investment of time.
People are often exploited by the prospect of making easy or free money.
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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 17 November 2014
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"Free money" is a term that is often used to describe cash that can be obtained without having to make some sort of investment or purchase on the front end. Strictly speaking, many strategies claim to provide free money when in fact there is some sort of investment of time, money, or both involved. With that in mind, the potential for receiving cash that is truly free is somewhat limited.

One common marketing approach that touts free money is the promotion of informational tools that allow people to apply for government and private grants. Typically, those grants are aimed at providing money that can be used for everything from paying utility bills to starting up a home business. A number of companies have compiled listings of different grants offered by government and private institutions, with some even including guidelines for submitting grant requests. In exchange for the information, there is normally some type of purchase price or access fee involved, which essentially means the buyer must make a monetary investment before receiving the data. This fee effectively excludes the deal from involving truly free money.

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In like manner, some online businesses make the claim of generating free money, basing the claim on the fact that plan participants do not invest any money on the front end, and do not buy products as part of their participation. What is not mentioned is the investment of time and effort that must be made to work the programs. Since truly free money does not require the investment of time or money, this would mean these money for nothing programs may generate easy cash, but that cash is not truly free money.

In spite of the wide but misguided usage of free money as a marketing and promotions tool, there are indeed situations in which people may receive some sort of money without making any effort or investing any of their own money in the process. This would include freewill gifts that are extended from one party to another, with no qualifications met or any expectations of repayment. For example, living allowances provided to heirs through some sort of trust fund is essentially free money, since the recipients do not have to do anything to receive the cash. It is important to remember that while free money may not cost anything on the front end, it is often subject to taxation once it is received, making it necessary to count the free funds as income.

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