George and Family
George needed a down payment to buy
a home. His lottery paid him $50,000 a year. After careful
analysis, it was clear that selling the next three years was
the best option. He received $135,000, which is .90 cents
on the dollar for his next three payments. He was able to
purchase the home of his dreams. In addition, his tax bracket
for the next three years was reduced, and because of the interest
on his new mortgage, he actually still got a check every year
from his tax refund! It worked out so perfectly, that George
decided to sell the entire annuity. He has made some safe
investments and is doing a lot better than he would have been
just waiting for the payments.
Lorraine and Daughter
Lorraine is a single working Mom. Her
lottery check that she gets once a year helps but $75,000
a year after taxes only goes so far, especially with a mortgage
and a daughter in private school. As bills started to mount
Lorraine began to utilize her credit cards more and more.
Pretty soon she had amassed over $30,000 worth of credit card
debt. She knew that paying the minimum monthly payment or
even a little more than that would never make the debt go
away, so she had to take action. When she called us, we closely
reviewed her situation and came up with the best option. Lorraine
knew that she needed an income every year, so she wasn't comfortable
selling entire payments. We came up with a solution. We bought
$15,000 a year from each check for the next 6 years for the
purchase price of $70,000. That gave her enough cash to pay
off all of her credit card debt, and she still had a sizable
amount left over to put in her savings account. This transaction
still left an income of $60,000 a year for the next 6 years.
In addition, because her payments were slightly smaller, her
tax bracket was reduced, which means she will be getting a
bigger tax refund check every year! Home Run Lorraine!
At 42 years of age, Mel was in debt.
He owned a home, and vehicles, but was constantly making payments
on everything and never seemed to get ahead. After his divorce,
there was even more financial burden. Then one day his luck
turned around and Mel won the Lottery securing him $500,000
a year for the next 20 years. This sounds like a massive amount
of wealth, but Mel will tell you it sounds like a lot more
than it actually is. After taxes, his first check yielded
$252,000. After paying off his home equity loan, some credit
card debt, his first daughter's outstanding student loans,
and younger daughter's college tuition, he was left with about
$60,000. There were all sorts of things he wanted to do, like
pay off his home, and pay off his cars, perhaps buy a boat,
do some wise investing for his future. His dream was to buy
the gas station where he worked as head mechanic, as his boss
wanted to retire. Although the first check gave him some breathing
space, he just didn't have enough to fulfill that dream, regardless
of how close it seemed when he won the lottery. When we met
with Mel he made a decision and felt very strongly about it.
He wanted to sell the whole annuity. We gave Mel 5.1 million
dollars for his entire annuity, which is $800,000 more than
what he would have received as a lump sum from the lottery.
The cash value of Mel's 10 million dollar jackpot was actually
4.8 million. Our 5.1 million, added together with Mel's first
check from the lottery, equals 5.6 million, a total of $800,000
more than what he would have received from the lottery! Mel
is now a very successful entrepeneur with his own gas station/auto
mechanic business and his family is well provided for. Let's
just say that Mel doesn't do tune-ups anymore!