Structured settlements and annuities are two similar forms of income were by you receive a periodic payment over a specified period of time.

Both are secured by the use of an insurance policy. An annuity may have been initialized several years ago or it may be the collateral that funds a retirement plan. A structured settlement is the compensation that is owed to someone due to personal injury, a discrimination suit, workers' compensation, or some other similar type of action. A settlement usually constituents two forms of payments. The first will be an initial amount to cover the up front cost of the immediate needs. The second will be a series of periodic payments from an annuity that was purchased by the defendant.

You may ask yourself why should I consider converting my payments into a lump sum payment.  The answers may astound you. First of all, you are not really receiving the full amount that was awarded to you. You are only receiving about one half that amount. The way a structured settlement is handled is identical to what a lottery commissions does. They will purchase an annuity or U.S. Treasury bonds to fund the future payments due to you. This way they only have to come up with about half of the amount that is owed to you. The second is TVM (Time Value of Money) and how it shrinks over time as described below. The third is the fundamental principles of finance reveal that a lump sum payment will produce a far greater total income if properly handled than the original amount of the assets.

The Shrinking Dollar

Even at the current low rate of inflation, your dollars buy less every year.  A dollar you get today will only be worth $0.81 in 5 years, $0.63 in 10 years, and $0.44 in 20 years, providing inflation remains at a this low rate of 3.8%.  Unfortunately, most of us can remember when inflation was greater than 10%!

An example, if you won a $1,000,000 lottery, you would receive $50,000 every year for the next 20 years.  Pretty good!  You could live on that income.  However, by the 20^th year, the buying power of that $50,000 will be worth less than $24,000, before paying the IRS.

If you are concerned about TVM and would like to control your money and how it is invested contact Global Capital Funding.

BENEFITS & ADVANTAGES

Ø      You can acquire a lump sum.
Ø      Invest lump sum at a higher rate of return.
Ø      Start a business.
Ø      College for your children or grandchildren.
Ø      Home improvements.
Ø      Wedding.
Ø      Or any other need you have.

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