Structured Settlements - Can They Make Your Dreams Come True?
We're not here to recommend selling your structured settlement. However, there is some truth to the claims that this can "make your dreams come true." There is no fairy tale involved. If you need quick cash, and you have access to a settlement, selling a portion of your leftover payments might be the best way to pay off a mortgage, settle a debt, or start a business.
How Can You Tell a Good Thing?
A lot of people struggle with their decision to either sell a structured settlement, or continue to receive their scheduled payments. The biggest worry with selling early, is that you will not have those regular payments coming in, and once you sign the dotted line, there is no turning back. The good news is that there is no better way to receive a tax-free lump sum of money.
If you are cashing-in your settlement to invest in shares or bonds, you should discuss the long-term benefits with your bank or stockbroker, to ensure you won't be hurting yourself over the long run. If you plan on sailing around the world, it is a good idea to discuss these plans with your partner or loved ones, to make sure there won't be financial difficulties down the road. If you're cashing-in to pay off a mortgage, you will need to figure out the amount of interest you'll be saving, as compared to the small penalty of selling early.
Sellers can expect to lose a percentage of their leftover payments, and this amount is generally in the double digits. With this in mind, there are a lot of situations where this small loss with enable you to do miraculous things, such as pay off a debt that would have ended up costing more, not to mention helping to minimize the damage to your credit. Receiving cash early also opens the possibility to start a business venture that would have otherwise taken years to save up for.
Dream as Big as Practicality Allows
Making your dreams come true is a process of discovering what you need, and then finding the most practical means of getting there. If you are hesitant, keep in mind that you can opt to sell only a portion of your remaining payments. This is a great compromise for those who prefer to keep a nest egg to fall back on.