Annuity Transfer - What Are The Risks
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The article "Annuity Transfer - What Are The Risks" talks about finance, it has been created by Amit Laufer -.
Many persons who know in the back of their minds that they got the possibility to transform a monthly payment or annuity long term payments into a titanic lump sum and by that to relieve temporarily financial problems, or need to buy a new automobile or a condo or help their babies and so forth are tempted to exercise that process into action.
Although it is a really natural feeling and sometimes even a real life need or deep inner quest for power and control, it is not in their best financial interest to say the least.
It is no wonder that the U.S federal laws encourage long term payments in both cases like Structured settlemetns and lottery winnings. There are many good reasons for that and I’m going to spell them out as clear as I can.
- In countreis around the world it is legal to pay for lottery winning in one lump sum. Experience shows many of these persons lose most or all of their money in a few years time, due to the following reasons:
- Oridnary persons who get into their possession a really large sum of money don’t really know how to manage their treasure or how to invest it wisely, they are not prepared for it and they are overwhelmed with a delusion of over abundance of wealth, they become totally careless on how and on what they spend their money.
- Even if they invest their money, they go for high risk speculative investments as they try to get high yields. Instead of going for a much solid and safer, “widows & orphans” type of ivnestment portfolio. Neither do they go for the godlen middle way in between of a mixed portfolio.
They don’t use investments advisers or financial consultants.
- They become over generous with their family and friends, they buy their babies homes, cars or any other materialistic requests, they “ lend “ money to a friend in need...
- They listen to shrewd business persons who talk them into investing into all kinds of business adventures that seems to them really profitable but in a short while turn into total failures and the money is gone.
- All kind of addictive behaviors like betting horse races or going to play the roulette in the casino are right now intensified with the feeling of power and wealth, it might drive the person to gamble high sums of money as if there is no tomorrow.
- Believe it or not but criminal elements might engage in putting pressure to extort monies from the overnight rich poor guy.
They might threaten to harm his family etc’
- Charity institutions start to call all day and night asking for donations to a really noble causes, they even send slick reps to convince him to donate money.
- His own children, times his spouse becomes really greedy and exert emotional pressure to give them more and more money. In cases the sudden riches literally ruined the families.
As I have shown you above, getting a large lump sum of money might be a risky thing, that is In addition to the fact that you're loosing a lot of money which was Tax free, that alone mihgt be a difference of anywhere between 35% - 65% , add to it the profits of the fund who bought the annuity from you and you're loosing titanic time.
It is not recommended for an injured or a disabled person, to transform the whole Structured Settlement long term payments into one titanic lump sum or you might find yourself one day without the money and facing high medical expenses and other bills you cannot afford.
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Annuity Transfer - What Are The Risks
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