Is a structured settlement investment a worthwhile money making option?
Many investors are asking this question as a result of the tattered state of the worldwide economy these days – traditional investments such as the stock market and real estate simply aren’t providing investors with the kind of rewards they are expecting, hence more and more people are looking at structured settlements as an alternative.
If you’re a new structured settlement purchaser, then you will probably be wondering what all the fuss is about. Structured settlements are about as safe an investment as it’s possible to make right now.
Why? Because, in a nutshell, structured settlements are guaranteed money, coming in the form of regular periodical payments – there’s no gambling involved at all.
What is a structured settlement investment?
Structured settlements are awarded to people as an alternative to a lump sum payout, should they win the lottery or be granted compensation for an injury they picked up.
Sometimes though, later on down the line the holder of the structured settlement policy decides they need a lump sum payment after all. This is where the investor comes in (you). As a structured settlement buyer, you are in a position to offer the policy holder what they need – a lump sum of cash to satisfy their demand for financial liquidity.
A structured settlement buyout can be extremely advantageous to investors who don’t mind waiting several years to see their return.
Annuities are sold at a significant discount in order to make them attractive to investors – so over the lifetime of the annuity, be it five years or ten years, the investor stands to make a substantial profit from the transaction.
In fact, this is more or less guaranteed. Meanwhile, the seller is happy too, as they gain access to the money they require to take care of their immediate needs.
Profitability of a structured settlement investment
A structured settlement sale can reap huge dividends over time. The transaction is comparable to offering someone a loan at a very high interest rate. Let’s look at an example:
John has suffered an injury at work, and as a result has been awarded a structured settlement for $500,000. The structured settlement is to be paid out over ten years, meaning John is entitled to receive $50,000 per year for the next decade.
However, it seems that John isn’t happy with this arrangement – he feels he would be better off taking a lump sum, even at a discount, so that hecan invest it in that home he has always wanted to buy.
As a structured settlement investor, you can help John out. The standard rate for a structured settlement buyout is to offer around 70% of the total value of the annuity, so for just $350,000, you would be able to buyout John’s structured settlements. What this means of course, is that you stand to make $150,000 profit over the course of the ten years – not bad at all!
It’s very easy to become a structured settlement buyer. If you have the money to invest and you are looking for a vehicle that is guaranteed to be profitable, contact a structured settlement broker to see how you can get in on the act.