Invest Your Money and Erase Some of That Debt

invest your money

One of the most important skills to learn going into adulthood is how to properly manage your finances and invest your money. Between covering living costs, such as food, rent, and utilities, there are numerous expenses that can quickly drain your bank account. Unfortunately, it appears that in recent years there are more ways than ever to accrue debt.

Filing for bankruptcy has become increasingly commonplace for many people. Whether it be chapter 7 bankruptcies for individuals looking to liquidate their assets, or businesses attempting to set up a payment plan with creditors, more and more people are desperately looking for ways to wipe out their debt. Just in February of 2015, an average of 3,422 bankruptcies were filed every day.

Medical expenses constitute one of the largest financial pitfalls that throw Americans into debt. Between medications, regular check ups, and emergency treatments, there is no telling how many expenses one must pay just to remain healthy. Around 64 million people, amounting to roughly 35% of the United States’ population, said they had trouble with bills or were stuck paying off medical debt in 2015.

For the younger up and coming generations, there is a newer and even more devastating hurdle to overcome that can prevent you from working to invest your money. Receiving a college education has long been the best opportunity for gaining employment. However, the financial costs of getting a degree have risen to astronomical levels in recent years. The overall outstanding student loan debt in the United States climbed from $1.21 trillion to $1.3 trillion just from 2014 to 2015.

Ironically enough, finding smart and different ways to invest your money can be one of the best ways to reduce debt. Selling lottery payments or getting cash for structured settlements can keep your savings protected until they are needed to cover expenses.

New Report Finds Fixed-Indexed Annuity On the Rise

annuity

The annuity market is one of the largest financial investment sectors there is today. There were approximately 34.8 million individual deferred annuity contracts in place exceeding $2.58 trillion at the end of 2013 alone. Arguably the most popular specific forms of annuities are the traditional variable annuities, but the fixed-indexed annuity (FIA) market has made significant progress in closing the gap over the least few years, according to the data and investment news source InvestmentNews.com.

“We do see fixed-indexed sales growing faster than traditional variable annuity sales,” said Bing Waldert, a director at Boston-based research firm Cerulli Associates.

Although selling fixed annuities or getting cash for structured settlements is a great way to get the money you need now, some people buy these types of investments with the intention of tapping into later in life.

Overall, variable annuities (VAs) are still almost three times as popular as FIAs in terms of sales, but that difference has been reduced over the past few years. Total cash flows to VAs in 2014 were $138 billion, down from $156 billion in 2011, according to Cerulli’s ninth annual “Annuities and Insurance” report. That’s a decrease of 11.5%.

In stark contrast, FIAs grew by 45.5% in the same time span, from $33 billion in 2011 to $48 billion in 2014.

You can buy annuities in varying lengths and payout periods, but two of the most common are for 25 years or until death. Most FIAs tend to be until death as you don’t start receiving payments until as late as 80 years old in some cases.

This can also be a primary reason for selling an annuity settlement early since you can never predict surprise expenses, such as medical emergencies or debt. In fact about 35% (64 million people) of the U.S. population said they had trouble paying bills or were stuck paying off medical debt in 2014. You may avoid being part of the 20% of the population whose credit report is hurt by overdue medical bills if you sell your annuity early.

With the current strength of the fixed-indexed annuities market there will always be the opportunity to buy another secure, income investment for the future. The time to handle your debt and expenses of today is now.

3 Killer Tips to Pay Down Your Debt

paying off your debt

When you begin to manage your finances on your own, it can seem impossible to make a life for yourself while also paying off your debt. However, if you know enough tips and tricks, it is certainly not an impossible task. The key is keeping yourself in check and being smart with your money. You need to have an outlined plan of how to manage everything for it to work. Read on for three of the best tips to manage your money and pay off debt.

Spend Below Your Means
American consumers own a total of $11.91 trillion in debt, and this is largely due to spending above your means. Credit cards and deferred payments have made it easy to spend now and worry about paying it off later, but when you do that, you aren’t usually tracking how much you’re really spending. Not only that, but when you do try to pay it back, you aren’t just paying for the items you bought — you’re also paying for the interest accrued while you weren’t paying that debt. Spending below your means gives you a little bit of extra money to put away for emergencies or to put toward your debt.

Make Smart Payments
Student loan debt has now increased to $1.3 trillion in 2015, compared to $1.21 trillion in 2014. As with any loan, whether it’s for a mortgage, car, or school, you need to be putting as much extra money as you can toward paying off the debt. Minimum payments, especially on student loans, are only paying the interest, not the principle. So if you’re looking to chip away at the principle, your smartest route is to pay more than the minimum due at every opportunity.

Make Your Money Work for You
There are plenty of options out there to make money work for you without you needing to do much. Though many are wary of stocks, annuities can also help in the same way. Whether you choose to sell an annuity for a lump sum or receive it yearly, it can help you in some way. There is more than $2.58 trillion from 34.8 million individual deferred annuity contracts in place. Investing here will certainly help you in paying off your debt!

Paying off your debt fast is difficult, but it isn’t impossible. Will any of these tips work for you? Which ones are the most helpful?

Using An Annuity Lump Sum To Start A New Business

If you’re thinking about selling an annuity lump sum, you’ve already made a good decision by looking for more information! Selling annuity payments can be beneficial for a variety of reasons: from paying off credit card debt to purchasing a new home or car, there are so many ways that this money can benefit you right now.

One of the most common reasons why people choose to sell their annuity payments is to get that lump sum of cash and start up a new business. It’s a great way to invest in your own future (and the future of your kids and grandkids, too) while also pursuing something you love.

So how exactly will selling your annuity help you get started? Let’s take a quick look at the real costs of starting up a new business:

On average, a new business today requires at least $30,000 before it’s ready to open its doors to customers. Of course, this amount can vary quite a bit depending on what industry you’re interested in. A tech-focused business, for example, could easily spend that much money just on computers and other equipment!

Even though there are around 543,000 new businesses each month in the U.S., over 543,000 businesses are shut down during that same period; a major reason for closing up shop is because the operating costs became too high to manage. In fact, a very small portion of all businesses in the U.S. actually make it past 10 years. While 70% of businesses make it through their first two years, only 30% of businesses make it past their tenth year.

When you sell your annuity payments, you’ll have a better chance at covering the basic costs of a new business while also making investments for the future. The average settlement payout is around $324,000 — which is more than enough money to get a new business up and running — and you’ll have access to leftover cash should an emergency occur.

annuity lump sum

Now it’s time for you to decide: is selling your annuity the right decision for your career path? Over 92% of claimants say that they made the right decision by selling their payments — so the odds are definitely in your favor. For some more interesting statistics on how an annuity payout can help finance your new business, be sure to check out our infographic!