by Structured Settlement Watchdog
If you recently turned 18-24 and have a structured settlement, beware creatures of the deep discount. Some structured settlement purchasers are like razor toothed bull sharks prowling the reef or surf line, waiting for the "just old enough" dinner bell to ring.
Some structured settlement purchasers prey on legal but unsophisticated wide eyed young adults with "bull shark" sales pitches that involve pairing a purchaser of structured settlement payment rights and an investment adviser. In one matter I recently learned of, a young adult is being pitched to sell $2,000,000 in payments for $500,000 and some investment adviser purports to be able to turn those pennies on the dollar into $5,000,000.
Before you get bamboozled into a pennies on the dollar disaster consider the following:
The S&P 500, as an index, is a statistical measure of the performance of America’s 500 largest stocks. In this context, the S&P 500 is a common benchmark against which portfolio performance can be evaluated. According to Motley Fool, "when it comes to the major U.S. stock indexes, none is more highly regarded as a barometer of the overall stock market’s performance and an indicator of how large corporations are performing than the S&P 500 index".
If you invested in the S&P 500 on January 2, 2001 and left it in the entire time period, without succumbing to the market's gyrations for 20 years, until December 31, 2020, your rate of return would be 7.47%, according to the J.P. Morgan Asset Management 2021 Retirement Guide published March 6, 2021. If you missed the 60 biggest trading days over the 20 years, you return would have been negative, to the tune of -6.81%. These returns are before taxes.
How Compound Interest Works
So, if we use the 7.47% for an example and plug that into a compound interest calculator, along with the $500,000 proceeds from the recent proposed sale for 20 years, the calculator shows that you could accumulate $2,112.102 over 20 years, not taking into account federal, state and possibly local income taxes that might be due over the time period. So under that scenario the person might end up with less after taxes while exposing themselves to more risk.
What is really nuts, in my opinion is when structured settlement factoring companies pair with a investment advisor and project "from the moon" investment assumptions.
Three stories involving New Yorkers
Melissa Diego, a Latinx victim of con men Dan Cevallos and Eddie Rodriguez of Advance Funding
Cedric Thomas, a then young person of color victimized by 365 Advance/Novation Funding. Had a nice six figure income tax free "salary" from his AIG structured settlement before being taken by 365 Advance/Novation in October 2015 for a $1.5 million profit spread, bearing a disgusting 15.24% effective discount rate The money was spent on money losing properties and a Maserati.
'Michael Monagan, almost a victim of a pennies on the dollar to investment scheme where the financial adviser projected 12%, without taking into account taxes.
Structured Settlement Cash Now Shark Warnings in English, Spanish, French, Creole, Portuguese, Swahili, Latin, Yiddish and "Ebonics"
- Beware the Structured Settlement Cash Now Sharks!
- Cuidado con el efectivo de liquidación estructurada ahora tiburones
- Méfiez-vous de l’argent maintenant requins!
- fe atansyon lajan kach kounye a reken
- cuidado dinheiro agora tubarões
- Jihadharini na pesa taslimu sasa papa
- Cave ergo Stingrays cash est structured settlement
- hit eykh di straktsherd oysglaykh gelt itst sharx
- Yo! bewis da structured settlement cash now sharks [ Source: Ebonics translator ]