Ok. I have a delima. Im putting my business out there so you all can help me. I have a structured settlement from a dog bite, anyway.. the payoffs are 5k 10k 10k 15k 15k 21k 27k every three years. I already got the first three and i am due the 15k next aug. Now i want to go to one of those places so i can get my money now and the said that they can cut me a check for 39k right now. I want to take the money and run so i can pay off some bills and buy a house, but i dont know what i should do. Should i take the money pay off some bills buy a house, or wait for the payments to come over the years. I know i would loose like 19 grand but i would have the money now. Im stuck
2006-09-06 05:21:23 · 7 answers · asked by pretyboiricky 2 in Business & Finance ➔ Personal Finance
oops.... I added one to many payments. Take back one of the 15k payments
2006-09-06 05:57:48 · update #1
You need to calculate the net present value of the cash inflows & outflows in both scenarios & choose one with the highest positive value.
As a quick & dirty, the implied discount rate in the offer that was made to you is 13.2%. If the interest that you are paying on your bills is less than that, then you should keep the settlement.
PS to everyone who answered before me: Please take a finance class & learn about the time value of money. Then you wouldn't say anything so ignorant.
2006-09-06 05:33:23 · answer #1 · answered by Homer J. Simpson 6 · 0⤊ 0⤋
Actually, you're losing 39k, not 19k.
I was going to non recommend it until I crunched some numbers. I've changed my mind, now.
Comparing the buyout of your structured settlement to a 78k loan for 10 years, you're paying about a 8.7% interest rate on the buyout. It's not a sterling deal, but not a bad deal, either. And you no longer need to worry about collecting on the settlement either.
Just ensure that you're not actually signing a loan for the funds, but are assigning the rights to the settlement in exchange for the immediate 39k payout. Have a lawyer and financial advisor review the deal of course, but it may well be worth considering.
2006-09-06 05:49:59 · answer #2 · answered by Bostonian In MO 7 · 1⤊ 0⤋
don't take it, they're ripping you off. At worst, go to a bank and get a loan that you can use to pay off high interest credit bills and use the settlement as collateral. Put that money away, and continue to work and save... I'm sorry, but this dog bite did not retire you. BTW you would lose 29 grand, not 19.
2006-09-06 05:32:41 · answer #3 · answered by work_thenplay 3 · 0⤊ 1⤋
Definitely wait for the payments. If you're hurting for money, call the people billing you and ask to work out a payment plan. Explain that you want to pay the bills and will have more money coming in soon. As for the house, save up until you have a down payment.
2006-09-06 05:34:30 · answer #4 · answered by rainfingers 4 · 0⤊ 2⤋
Do the math again. If you have already received the first three payments totaling $25,000.00, you stand to make $78,000.00 over the course of the next ten years. Having them cut you a check for $39,000.00 means you'll lose half of it. Do yourself a favor -- stick with the structured settlement and take the money when you get it. Better yet, don't rely on that money and invest it when you get it. Being impatient now is going to cost you dearly, especially if something happens later on where you could really use that extra money. Don't go for the instant gratification. You'll regret it if you do.
2006-09-06 05:31:46 · answer #5 · answered by sarge927 7 · 0⤊ 2⤋
i understand it suckbut quick food jobs, grocery shops, even area jobs as long as you try to make as a lot funds as plausible on the belongings you owe. and in view that you stated you could do college paintings at any time then pick a say maximum proper desirable so you might end college paintings, even pull an all nighter bc the faster you get performed the more beneficial positive the equipment will seem and once you note for a college you'll get schoalorships and promises alongside with loans to assist pay for college and costs. yet once you get a interest keep it. dont end bc unpredicted issues ensue and the significant ingredient u will desire is money.. it sucks yet nicely worth it. also on apps merely positioned nonetheless enrolled in college
2016-10-15 23:16:24 · answer #6 · answered by venturino 4 · 0⤊ 0⤋
Don't be foolish! Keep the payoffs as they are, 19 grand is a LOT of money! You can't win by taking the 39k....that would be STOOOO-PID!
2006-09-06 05:27:33 · answer #7 · answered by tonevault 3 · 0⤊ 2⤋