Do you receive monthly payments from a structured annuity settlement that you acquired from a lawsuit, lottery payments, or an inheritance? If so, you’ve probably seen advertisements on tv that entice you to cash in structured settlement payments any time you want a little more spending money– to take a nice vacation, to buy Christmas presents, or to make a luxury purchase, such as a car that you don’t need. If you were to calculate the amount of money you would lose when you cash in structured settlement payments to make a purchase that doesn’t add value to your financial well-being, you’ll probably realize the cost of selling your structured settlement will be far greater than the purchase was worth.
While deciding to cash in structured settlement payments to take a Disney cruise probably isn’t the best use of your money, there are several occasions where you can sell your structured settlement and actually make you more money in the long run. A few occasions that selling a structured settlement is a wise financial choice include:
- Investing in your future
The average college graduate finishes college with more than $40,000 in school loans. Many of the school loans are private, and at high interest rates. It might be a good idea to sell part of your structured settlement to use the proceeds to pay for your college education, without having to get heavily in debt.
If you structured settlement value is greater than the cost of going to college, you may be able to reserve some payments for your future, and get yourself through school without getting burried in debt.
Another occasion where investing in your future will make you more money than your structured settlement payments is using the money to buy equipment to start a business. The income that you can get from the great business might be several times more than you would get from a structured settlement.
- Avoiding Financial Devastation
Sometimes, people who make good financial choices still end up in devastating positions due to medical expenses or unemployment. If you are facing bankruptcy, you will probably lose your structured settlement in the bankruptcy proceedings to pay off your debts anyways. By selling your structured settlement and using the value to pay off your debtors, or to at least to get yourself out of arrears, you’ll be able to keep other assets such as your home and your car and far less stress on your family than if you lost everything (including your structured settlement) in a bankruptcy.
- To Make a Higher Yield Investment
Sometimes, in the right market, you could find an investment that will grow so substantially that you’ll make a lot more then your structured settlement gives you. Perhaps buying land for commercial development or investing in high-yield stocks or commodities will give you far greater returns than you get from your structured settlement payments currently. If you find yourself within 10 years of retirement, and without enough saving in your retirement accounts, including the structured settlement, to finance your life without work, sometimes taking your structured settlement and investing it in something with high returns is a good idea. Keep in mind that most high return investments are also very high risk.
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