This is the second in a series of posts with questions you should ask yourself to determine if selling a structured settlement is a good idea for you.
Essential Question #2: How am I going to spend this money? Previously, we talked about the pitfalls of, and alternatives to, using the sale of a structured settlement to pay recurring bills. What if you have other plans for the money, however? What if you have something really special in mind?
Investing It. If you plan to put your cash infusion into some other investment vehicle, this is almost certainly a losing proposition. Remember, the sale of your settlement will net you a lump sum of cash lower than the total you would have received over time. Unless you’ve found something that’s going to pay you phenomenal returns, you won’t make up what you lose. Does your planned investment purport a higher interest rate than anything else out there? It’s definitely high-risk, and potentially fraudulent. Planning to invest in the surging gold or silver markets? With these at all-time highs, it’s tempting, but trees don’t grow to the moon, and there are plenty of predictions that prices will soon tumble. Investing in dirt-cheap real estate, hoping to turn a profit? Maybe – but with home values in many parts of the country still dropping, prepare to wait for that big payday.
Most importantly, if an investment advisor is offering you a “sure thing,” run away. Fast.
Starting a Business. Nearly everyone dreams of being their own boss. But businesses fail – often. What is the true likelihood yours will succeed? Even if you’re convinced that your idea is a winner, what’s your backup plan if you lose? New businesses tend to gobble money – will the sale of your settlement cover the costs, and then some? Is there any other way to fund this venture, such as a Small Business Association loan, or teaming up business partner?
Buying a Home. The depressed housing market is great for prospective buyers, and deals abound. Owning your own home can still be a great investment. But, again, consider how you plan to make ends meet without your structured settlement. Do you have a stable job? Are your monthly expenses under control?
Loaning Money to Family. So a parent, sibling, or child needs money, and is tugging at your heartstrings to get it. Can they answer hard questions about why they need the money? Even if you help them out, is the problem going to persist? Are they offering promises of repayment that are long on emotion but short on specifics? And if they fail to pay you back, will you still be able to survive financially? Or even emotionally? You should almost always answer “no” to intra-family lending, even though you might not be welcome to the next family dinner.
So, if you’ve given it some serious thought and you still want to sell, and you know just how you’re going to spend that money, there are still more questions to ask yourself. Another one next post.
If you need help selling your structured settlement, annuity or lottery payments,
contact us today. We are here to answer your questions and help you obtain the
highest possible price for your payments.
