Why Buy A Structured Settlement?
Buying structured settlements as a form of investment is popular with both investment businesses and with some individuals. These settlements are compensation payouts which are given to people in place of a lump sum payment. The payments they receive here will be made to a staggered schedule agreed at the beginning the settlement.
Although many people like the structure of this kind of deal to start with many also find that they would prefer some form of cash sum instead as time progresses. Their circumstances may change or they may need to get their hands on larger lump sums to buy or do something big. So, many people will then sell on their structured settlement to a third party.
This gives the original settlement owner a one-off cash sum and the settlement itself is then owned by the person who purchased it. They then get the regular payments that are left to be made according to the plan's original terms. This is such a popular investment as it is viewed as being relatively safe and gives a good return on investment in many cases.
Most structured settlements are funded by the purchase of annuities so, if you buy a settlement from somebody else, then you are essentially buying annuities that are designed to pay out specific sums of cash at guaranteed times. The money that you make here will vary but it is usually attractive enough to make this a popular type of investment.
Say, for example, you buy a structured settlement from an individual who was awarded $500,000 to be paid out over five years in equal lump sum payments of $100,000. After a year this individual decides that they would actually rather have the money so decide to sell their settlement.
So, if you buy the settlement (which now has $400,000 left in payments due) for $200,000 then the owner gets this as a lump sum. Over the next four years you will be paid $100,000 a year until the settlement is done. This gives you a profit margin of $200,000. The fact that you know that the payments will be made here make this an attractive option for many investors.
Another reason that these are popular investment products is the fact that the lump sums that you gain every year may be more than your money would earn on an annual basis for standard stock market investments. $200,000 invested in a buoyant stock market with returns of 6%, for example, would see your $200,000 earn just $12,000. Your $200,000 invested here would give you four years of $100,000 a year.
Finally, there are also tax advantages to be had from most structured settlement agreements. This can make them an even more attractive prospect for investors who are looking to minimize their investment costs and outgoings. However, as with any investment you should make sure to take qualified advice before you buy any structured settlement agreement. It is important that you understand your obligations here and how the investment will actually work for you before you do anything else. - 23211
Although many people like the structure of this kind of deal to start with many also find that they would prefer some form of cash sum instead as time progresses. Their circumstances may change or they may need to get their hands on larger lump sums to buy or do something big. So, many people will then sell on their structured settlement to a third party.
This gives the original settlement owner a one-off cash sum and the settlement itself is then owned by the person who purchased it. They then get the regular payments that are left to be made according to the plan's original terms. This is such a popular investment as it is viewed as being relatively safe and gives a good return on investment in many cases.
Most structured settlements are funded by the purchase of annuities so, if you buy a settlement from somebody else, then you are essentially buying annuities that are designed to pay out specific sums of cash at guaranteed times. The money that you make here will vary but it is usually attractive enough to make this a popular type of investment.
Say, for example, you buy a structured settlement from an individual who was awarded $500,000 to be paid out over five years in equal lump sum payments of $100,000. After a year this individual decides that they would actually rather have the money so decide to sell their settlement.
So, if you buy the settlement (which now has $400,000 left in payments due) for $200,000 then the owner gets this as a lump sum. Over the next four years you will be paid $100,000 a year until the settlement is done. This gives you a profit margin of $200,000. The fact that you know that the payments will be made here make this an attractive option for many investors.
Another reason that these are popular investment products is the fact that the lump sums that you gain every year may be more than your money would earn on an annual basis for standard stock market investments. $200,000 invested in a buoyant stock market with returns of 6%, for example, would see your $200,000 earn just $12,000. Your $200,000 invested here would give you four years of $100,000 a year.
Finally, there are also tax advantages to be had from most structured settlement agreements. This can make them an even more attractive prospect for investors who are looking to minimize their investment costs and outgoings. However, as with any investment you should make sure to take qualified advice before you buy any structured settlement agreement. It is important that you understand your obligations here and how the investment will actually work for you before you do anything else. - 23211
About the Author:
Allie Sanchez helps people learn about a cash from structured settlement at her website on the profession of structured settlement broker.
posted by X - Men @ 1:13 AM
0 Comments
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home