My Purchase Structured Settlement

If you are in debt, seldom will you be able to save for your rainy day unless you have some extra cash at your disposal. So, the first step is to pay off debt to reduce your debt obligations. This will allow you to free up some cash that you pay to meet your financial obligations.

How will you pay off debt and reduce your debt obligations?

There are different possible ways in which you can easily do so. Some of the best ways are mentioned below –

• Manage debts on your own

You can manage debts on your own. How will you do this? First of all you need to identify the cause that has landed you in this situation. In majority of the cases it is cash mismanagement. But it may be due to unforeseen financial emergency too. In order to meet the unexpected financial events, you need to build up an emergency fund, which you can fall back upon in case of financial hardship. Use cash instead of plastic money, budget your finance etc.

• Enroll in a debt help program

There are many debt help programs available and you can opt for one. Depending on your special financial requirement, you can enroll in debt consolidation, debt settlement or debt management. However, if you enroll, make sure you take the program to completion.

• Seek assistance of a credit counselor

A credit counselor can be of immense help. You can seek assistance if you sense a financial crisis in near future or you are exploring ways to get out of debt. The credit counselor will assess your financial situation and suggest a method that will help you to pay off debt.

• File bankruptcy to pay off debt

If nothing seems to work for you, you can file bankruptcy. It can be either Chapter 7 or Chapter 13 bankruptcy. However, it is important that you seek assistance of a bankruptcy attorney as it is a federal court process and there are many legal aspects that need to be addressed.

It is a wise move to get rid of your debts so that you can save cash to build up your emergency fund because you never know what will happen tomorrow. Your cash reserves will always give you a strange support in every possible situation, whether it will be good or bad, would happen to you or your family. So, go ahead and take control of your finances.

Not surprisingly commission based salesmen have favored the annuity indexed investment funds over all others because of their commission value, not the return they provide the consumer.  The presentation of the indexed based annuity gets the most practice because it pays them the most, not because it’s the best for you.  A lot of people are fooled into the pitch thinking the returns will be almost guaranteed because they are based on the index.  What most people feel mislead about is the actual place the returns are based on.

If you are getting confused do not be, we are going to take a look at a few basic facts about indexed based annuities.  Equity indexed annuities fail to include the dividend gains.  The dividend earnings have made up almost half of all the common stock earnings in the last fifty years.  The gains you would have made in the stock earnings are actually capped, preventing you from gaining as much as you would otherwise.

Equity based annuities are by far and away the most heavily penalized when it comes to taking your money out before the predetermined maturity date.  Money is therefore taken out of your pocket and withheld by the insurance company so they can meet their own margins.

Any time you are making a purchase based on commission sales it is important to know if there are different commission percentages for different products as this will often times affect what you are being sold, this is the case for equity indexed annuities.

While four or five percent are normal commissions these annuities offer the salesmen in excess of ten percent.  When you know the normal commission rate is five percent and you are being charged ten, you know something is up.  The sales guys are so adamant about selling these because they are what is in their best interest not yours.  You bottom line could really see some improvement in these investment types if so much of it weren’t going to the salesmen.

Al lot of people fell they were done wrong by their annuity provider and wonder why they were sold such a shoddy investment.  If you type ‘class action lawsuit’ and ‘equity based annuity’ into google you will find enough results to see a clear picture of the way these investments always seem to pan out.  I would rather purchase structured settlement than have to deal with all the smoke and mirrors of an equity based annuity.

At this point I am assuming you understand the importance of getting out of debt and building a small savings account in addition to an emergency fund.  So the next steps to building wealth is investing and here are some small introductions to investing and building wealth.

Invest 15 % of your household income into Roth IRA’s and pre tax retirement as a way to begin the investment portfolio.  If you invest more than that you won’t have enough to complete the next two steps.  Many people don’t make this investment because they want their cash to go towards college or to pay off the house but your kids college fund won’t feed you at retirement and what good is a paid off house you have to sell because you have nothing else to live on?

College savings plans are often the most common goals among parents many of whom didn’t go to college themselves, so start with a plan and know how much you will need.  You need to calculate what you need to save per month to hit your goal with 12% interest, that way with 4% inflation you are ahead of the curve by 8%.  Never save for college with insurance, savings bonds, zero coupon bonds or any type of prepaid college because those accounts average interest rates so low that you won’t ever earn enough.

The most recommended funds are Education Savings Accounts and 529 plans because of their safety and return.

Paying off your home can be done and you will use all the left over extra money to go into the mortgage.  If you are asking yourself where all this extra money is coming from you should already be out of debt with your small emergency funds in hand and only have fixed expenses, home, utilities, food, gas etc.  So anything you can do to lower those will help your financial goals.  So if you make $55,000 a year you take home about $3,300 per month.  If you are debt free then $900 should go to retirement accounts, leaving you $2,400 for expenses and mortgage.  If you can’t take $2,400 and pay all your expenses including the mortgage and still have $500 left over than you missed a step or your house is too big.  If retirement is right around the corner than consider or even purchase structured settlement.

Saving money is a life strategy and if you aren’t on the boat because you want to keep up with the Jones than you will deserve whatever you get in the end.