An Important Lesson On How Not to Use Your Lottery Winnings

lottery payments

A Georgia man who won $3 million on a lottery scratch-off ticket last year has given people everywhere an important lesson in how not to manage your finances after coming into a windfall of cash. Georgia man invested his winnings in running a crystal meth operation, and now he’s facing decades behind bars.

According to The New York Times, 45-year-old Ronnie Music Jr. has been indicted as part of a larger operation involving circulation of more than $1 million worth of methamphetamine and weapons. He pleaded guilty to a federal court last week and could face a maximum sentence of life in prison.

Music told state authorities when he won last year that he and his wife were going to save up their lottery payments. “I buy tickets every once in a while,” he said after winning big in February 2015. “I couldn’t believe it, and I still don’t believe it yet.”

Clearly, there were other plans in design.

After winning a large lottery, people typically get to choose between receiving an annuity settlement that doles out lottery payments over an extended period of time — usually either over 25 years or until death for very large jackpots — or they can get a lump sum that offers cash up-front. When people get tired of waiting for those annuity payments, they sometimes sell their lottery annuities midway through in order to get more cash at once. In any case, it’s clear that Music wasn’t saving up for anything besides drugs.

Of all the different ways to invest your money, a drug ring probably wasn’t the smartest choice. You could pay off your debt, for example. The average American household owes $15,355 on credit cards and $129,579 in overall debts. Even if you decided to splurge with your winnings, you could invest in a new car for a fraction of your winnings. The average price of a light vehicle in January 2015 being $33,933.

Literally anything would be better than investing in a meth operation. Even though the Times called Music’s drug ring business “thriving,” they also reported that he could have made more money by taking the lump sum of his lottery payment and investing it in the stock market.

Instead, says U.S. Attorney Edward J. Tarver, “As a result of his unsound investment strategy, Music now faces decades in a federal prison.”

Back to Basics: How do Annuities Work? How do They Work for You?

annuity

With advances in medicine and technology, it’s becoming more and more of a possibility that you may outlive your income. Household income had increased by 26% in the last decade, but so has the cost of living. If you’re worried about outliving what income and savings you do have, an annuity may be the right investment.

However, there’s a lot that goes into an annuity and you may not have all of the information you need right away. So whether you’re looking for a refresher or preparatory information, here’s what you need to know to make annuities work for you.

What is an Annuity?
Annuities are long-term investments issued by insurance providers to assist people who fear that they may outlive their current income stream. These long-term investments come in varied lengths and payout periods, but the most common are those paid over the course of 25 years or for life. Most people choose to invest a lump sum up front, and then manage a smaller payment into their monthly expenses.

How Can Annuities Help Me?
In the event of your passing, a structured settlement annuity could help your family in the future. Approximately 26% of Americans report not paying their bills on time, and the average household pays a total of $6,658 in interest annually. By investing your money in an annuity, or even allowing your family to sell your annuity, you could be relieving them of a potentially large debt burden.

What Type of Annuity is Best for Me?
There are multiple types of annuities, but the most common are variable and fixed. A variable allows you to place investments in different places and earn rewards based on their results. This is better for those who have a higher tolerance for risk. Fixed, on the other hand, requires you make fixed payments for the duration of the contract period.

Investing in annuities is a serious financial choice, and should not be taken lightly. Many people choose to sell their annuities if they don’t perform the proper research. Whether you’re buying or selling, be sure to have all of the proper information available to you.

Should You Sell Your Annuity? 3 Common Scenarios

sell your annuityBeing the recipient of an annuity or structured settlement payment is great in a lot of ways. You have the security of an additional stream of income, no matter how large or small your checks may be or how frequently they may arrive.

Yet it can also be frustrating. Sometimes it would be convenient to get cash for settlements or lottery winnings up front instead of having to wait until the next check arrives. As we all know, unexpected financial challenges can arise, and having access to that money would ease your stress.

Well, you’re in luck. There is a way you can sell your annuity, either partially or in full, and receive a larger sum of payment straightaway. Consider selling your annuity to a trusted financial institution in order to get the most out of your earnings.

  • You Need to Get Yourself Out of Debt.
    Debt is unfortunately all too common n this economic climate. Some one in five young Americans, age 18 to 24, describe themselves as being in “debt hardship,” which can cripple financial opportunities for a bright and secure future. If you sell your annuity for enough money to pay off student loans or credit card debt, you can buy yourself a pathway forward.
  • You’re Ready to Make a Lifetime Investment.
    Buying a house? The average cost in 2010 for a new home was $272,900, and mortgaging companies can require a down payment of up to 20% of the sales price. The more you put down now, the less you’ll be paying in interest and mortgage rates down the line. You could really save yourself a lot of money in the long run by selling a structured settlement for a hefty down payment.
  • You Have Ongoing Medical Bills.
    Unexpected healthcare needs — and even the expected ones — can be incredibly expensive without proper insurance. Especially if your medical needs are a result of an accident or injury that earned you your annuity payment in the first place, don’t hesitate to ask about selling that annuity in exchange for up-front funds. This way you can avoid mounting debt.

Don’t limit yourself to receiving small incremental checks when you could be receiving a lot more. Talk today with a specialist about how to sell your annuity and access the money that’s rightfully yours.

Pros and Cons: Structured Settlement Agreements

structured settlement agreementWhen it comes time to receive just compensation from your lawsuit, many people are presented with two options: a structured settlement agreement or a lump sum payment. With the first one, you receive your money in small increments over a long period of time. With the second, you get all of your money up front.

Every circumstance is unique, and your decision will ultimately depend on your situation and needs. Generally, there are a number of advantages and disadvantages to a structured settlement agreement that you should consider and discuss with your attorney and accountant before making the final call.

  • Pro: In the end, you usually get more money out of a structured settlement annuity than a lump sum payment.
    Because of taxes, interest, and dispensation periods that can take years to complete, you usually end up with more money from a structured settlement payment than you would if you were to opt for a cash-up-front compensation.
  • Con: That money takes longer to get to you.
    Of course, waiting for annuity payments means you might not have the money you need right away. This is especially important for people with medical bills to pay as a result of their case; overdue expenses can damage credit reports, as is already true of 20% of the population.
  • Pro: Annuity settlements provide future security.
    Some people can’t stand money that burns a hole in their pockets. Receiving all of your award up-front may tempt people to spend recklessly; some 25 to 30% of accident victims report using up all of their judgement funds within two months of recovery, while 90% are out of money within five years. A structured settlement agreement forces you to budget that money so that it can last for future medical expenses or financial security.
  • Con: You may not be getting the most out of that money.
    If you receive all of your money up front, you can create opportunities for investing your money. In the end, that may create a bigger pay-off than an annuity. People can use that money to get out of credit card debt, for example, which 70% of Americans say bears a greater stigma than any other kind of debt.

No matter what you decide, the good news is that it’s not necessarily written in stone. Even if you opt for a structured settlement payment plan, you can always sell your structured settlements to a financial institution — either partially or fully — to get a bulk sum of money to cover any emergency expenses.

Understand your options and make the best decision by consulting with your attorney.

Tired of Small Structured Settlement Payment Plans? There’s Another Way

structured settlement payment

Structured settlement payments are common in instances of personal injury or product liability, when companies agree to compensate claimants with a nice sum of money, usually in order to avoid a long and lengthy court process.

While you may have been promised a lot of money for your injuries or damages, chances are you haven’t actually seen much of it yet. That’s because structured settlement payments are almost always doled out in small increments over a long period of time instead of all at once.

In the end, this long, drawn-out process will help get you all the money you deserve while avoiding nasty tax issues. However, it’s simply not a feasible solution for everyone — perhaps especially personal injury victims who may have high medical bills to pay. Statistics from the insurance industry indicate that some 25 – 30% of all accident victims wind up using all of their case funds within two months of recovery, while 90% use up that money within just five years. Moreover, outstanding medical bills can be a serious financial burden — approximately 20% of all credit card reports are damaged by overdue healthcare expenses.

The good news is that there is a way to get cash for your structured settlement up front. You can sell your structured settlement to a financial institution to get settlement money now.

Selling a structured settlement simply requires some paperwork and a sign-off from a legal judge. You essentially forfeit all of those small, regular checks in exchange for one lump sum right off the bat. The trade-off is that your overall earnings will likely be less than if you waited the 20 or 30 years to see your annuity through — however, there’s no shortage of ways to invest your money now to see that it grows more through the years.

As of 2013, there were some 34.8 million deferred annuity or structured settlement payment plans across the country that, when combined, totaled more than $2.58 trillion. If part of that money is yours, you don’t necessarily have to wait years or decades to get your hands on it. Speak with an annuity seller today to learn more about your options.

Financial Management Advice for Surviving on a Budget

financial management

Financial experts and political pundits alike say that we’re slowly making our way out of the Great Recession, but many Americans today are still struggling financially to make ends meet.

The numbers can be deceiving: while overall household income has increased by 26% over the past dozen years, the actual cost of living has gone up by 29% during that same period of time. It can be difficult to plan — much less stick to — a budget when you’re already living on limited resources, but a sound financial management plan will help you make the most out of your money.

Here are just a few small pieces of advice to set you on the right track.

  • Reduce Debt
    Credit cards and loans are a very useful way to help cover costs and make investments when you don’t have the money for purchases up front, but in the long run, they can cost you more than they’re worth. Americans pay an average $950 every year just on interest payments. The best way to reduce your overall costs of spending may just be getting out of debt as quickly as you can.
  • Plan Your Meals
    Successful financial management comes through sweating the small stuff. When you plan out your grocery shopping to meet your meal plans for the week, you’ll be less likely to make impulse or unnecessary food purchases, both at the supermarket or at restaurants. Those small daily savings can really make a difference over time.
  • Think Green
    There is a strong movement across the country towards making eco-friendly decisions about how we use energy and fuel. But the decision to make small choices to reduce energy use can also save you bundles of money. You can shave tens of dollars off of monthly expenses simply by switching to high-efficiency lightbulbs, or keeping the thermostat set just a few degrees higher in the summer or cooler in the winter. You might even consider ditching the car to bike to work!

No matter you current situation, there are ways to take control of and manage your finances now before it’s too late. Some 40% of American families routinely spend more than they earn — don’t get to the point where debt rules your life. Simple financial management now can give you long-term peace of mind.

How to Sell an Annuity in 3 Easy Steps

sell an annuity

You may be surprised at just how easy it is to sell your annuity or structured settlement payment plan in order to get settlement money now.

When you sell an annuity, you essentially give up your small increments of payment installations in order to receive all of your lottery winnings or structured settlement agreement money at once, in what’s called a lump sum. There are many reasons why people choose to sell an annuity: to pay off credit card debt (the average consumer has 3.5 credit cards), to put a down payment on a house (the average cost in 2010 was $272,900 for a new home), or to simply help make ends meet (some 40% of American families spend more than they earn). After all, it’s your money, and you are entitled to receive it whenever you want.

The process of selling an annuity involves some serious consideration on your part, but in the end there are just three simple steps standing between you and your lump sum payment.

  1. Contact a financial institution that specializes in annuity sales.
    First, you’ll need to get in touch with a credible financial institution that understands how annuity sales work. Know that there can be differences in rates between sellers, so be sure to shop around and ask for a quote on how much you can actually expect to receive as a lump sum by the end of the process.
  2. Arrange a court date.
    Once you’ve decided on a seller, you’ll have to schedule an appearance in court. This ensures that your decision to sell an annuity has valid reasoning and will not unduly jeopardize the financial future of you or your family. The judge will then sign off on your sale.
  3. Walk away with your money.
    Once you’ve submitted all of the proper paperwork, you should have access to your money within just a few days. Then, the rest is up to you!

While payment installment plans can provide a nice slice of income, sometimes we all need a little extra help up front. Bear in mind that you can also sell only a portion of your annuity — you don’t necessarily need to sell it all at once. That way, you can have the best of both worlds with immediate funds and long-term security.

Paying Off Your Debt Fast: Top Tricks

paying off your debt fastDebt is a major problem in the U.S. today. Throughout every single household, adults owe an average $11,244 in student loans, $8,163 on car payments, and $70,322 in mortgage payments. Try as you might, paying off your debt fast simply isn’t a feasible solution for the 26% of Americans who admit having trouble making their monthly bill payments on time.

But if you’re the recipient of an annuity or structured settlement payment, there’s a better way. Instead of waiting for your payments to trickle in over the years, or even over the decades, you can sell your annuity or structured settlement agreement to get cash now.

Many people don’t realize that selling your annuity is even an option, let alone the benefits it can have for your financial situation. While the comfortable security of that monthly check might help you pay your bills, it also prolongs your debt. The average household pays $6,658 in interest each year — expenses that could be wiped out quickly when you get settlement money now and can start paying off your debt fast.

The process is simple, and you don’t necessarily have to sell your entire structured settlement at once in order to receive a lump sum payment in return.

First, talk with a financial institution authorized to purchase annuities or settlements. They’ll not only help guide you through the process but discuss your options and offer a quote.

Then, you’ll have to go through some paperwork, which is to be submitted to a judge in a court proceeding. They simply want to know how you’ll use your direct cash and that the sale of your annuity will not immediately jeopardize you or your family in any way.

Finally, you’ll walk away, cash in hand! It’s really that easy, especially when you have a professional helping hand along the way.

Think of what you could do to start paying off your debt faster if you had the money in the bank. No more car payments. No more student loans. A simpler future awaits when you start living the debt free life.

How to Overcome the Financial Challenges of Medical Bills

financial challengesAs if the emotional turmoil of dealing with illnesses and accidents weren’t enough, the financial challenges of paying off medical bills can be an extraordinarily daunting task. In 2014, some 35% of the American population — more than 64 million people — claimed to have trouble paying bills or medical debt. Additionally, 20% of all credit card reports are negatively impacted by the costs of outstanding medical bills.

Skimping on health care for yourself or a loved one is not an option. So what can you do to relieve some of the financial challenges of paying those premium hospital bills, insurance deductibles, or medication co-payments? Here a few pieces of advice to help see you through this difficult time.

  • Sell Your Structured Settlement.
    If your medical expenses were the result of an accident and you received a structured settlement payment through court, you don’t necessarily have to wait to receive all of your money. You can get cash for settlements up-front by selling a structured settlement to a financial institution and get money now.
  • Ask for Help.
    Getting sick or suffering injuries is no one’s choice. Reach out to your community by starting an internet-based crowdfunding platform, asking people for small donations to help you cover some of your medical expenses. You may be surprised by the generosity.
  • Check for Errors or Negotiate.
    It’s a shocking fact that many times people receive huge medical bills for tests or operations they didn’t receive — which can be difficult for the average person to spot underneath all of that medical jargon. Make sure to read over your bills carefully.And did you know that medical expenses can be negotiable? You can try talking with either your doctor, the hospital, or your insurance provider to try to work out a lower rate, especially if you’re in the midst of other financial challenges.

Don’t let medical debt rule your life. Americans have enough debt hardship as it is, owing a combined $11.91 trillion dollars. Selling a settlement or asking for help is the easiest way to remove the burden of medical expenses and get ready to move forward with your life.

Investing Your Money: A Brief Guide for Millennials

investing your money

Perhaps no other generation has been more affected by the great economic recession of the 21st century than Millennials. Close to one in five Americans today between the ages of 18 and 24 describe themselves as financially suffering from “debt hardship.”

The reasons stem from both sides: Not only has the cost of higher education skyrocketed — the College Board reports that average tuition and fees for the 2015 academic year were $31,231 for private institutions and $9,139 for public ones — but the job economy upon graduation into the “real world” has been grim for years.

Investing your money might be the very last thing on your mind when you’re already concerned about paying the bills on time and figuring out ways to reduce debt. But in fact, investing money now, during your youth, is the smartest way to ensure a secure financial future for yourself.

Millennials haven’t got it all bad. Here are three of the top reasons you should start investing your money today.

  • Time is on your side. Everyone knows that investing in stocks or funds usually takes time before you see your money grow. Invest your money now — even if it’s only a modest amount — and with time, it can turn into more funds that you can use years from now to make that down payment on your dream house or send the future kids off to college.
  • The economy is recovering. It may seem to move at a snail’s pace, but all signs indicate that the American economy is back on the rise and will continue to have a strong presence in global finance. That means that it’s a safe and smart time to make investments while prices are still low and climbing.
  • Technology is an asset. Millennials are known as the tech-savvy generation, and as investing moves increasingly to the digital and even mobile realm, the younger generations with the right know-how will be well poised to take control over their financial management strategies.

Yes, times are still tough. A full 26% Americans struggle to even pay their bills on time. But the old adage “Buy low, sell high” has never been more pertinent to young people looking for ways to increase their finances without hardly lifting a finger. Take stock of your future and start investing your money as soon as you can.