In these financial times, many people are looking for ways to get a little more cash — usually in lump sum form. The thinking is that a lump sum could pay off debt, or cover medical bills. For those receiving some sort of settlement payment, or receiving annuity payments, it is tempting to turn to one of the companies, like J.G. Wentworth or Peachtree Financial, that offer to “buy” your annuity or settlement, giving you a lump sum.
This arrangement works when you sign over the right to receive your regular installments (which may be monthly, quarterly or at some other interval) to the company. This company then pays you a lump sum. This lump sum is usually the value of your settlement or annuity, minus a fee. And this is where things can get a little sticky. After all, companies are in business to make money. Therefore, you may pay fees of between 9% and 15% or more. These fees are deducted from the total amount you would receive. So, if you had a $50,000 settlement, and you were charged a 15% fee, you would actually only get a lump payment of $42,500. If you desperately need this money though, you might not mind, since the monthly payout of $50,000 over a period of years might not be enough to sustain you.
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“The measure of success isn’t if you have a tough problem, but whether it’s the same one you had last year.”– John Foster Dulles
Sometimes, a simple statement contains so much wisdom.
- It’s okay to fail. In fact, fail fast.
- It’s okay to have problems, but make sure you address them when they pop up.
- Notice that there’s no mention of outside help. Results are important, not necessarily how exactly a problem is solved.
- Efficient is good too. This is obvious, but it is not nearly as critical as actually fixing what’s wrong. Someone who can get things done with less is, in theory, more valuable; but in reality, not that many people can quantify and measure the difference.
- It’s okay that the problem is tough to solve. In fact, some problems are tough by design. If every solution is trivial, we will start categorizing the easier problems tougher, because everything is relative.
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Sallie Mae Bank is yet another option for our savings, and initially, I thought the yield wasn’t high enough to justify talking about it. However, with the competition all recently dropping rates, it’s time to take a look.
The Standards Offering of Sallie Mae Bank
I don’t want to bore you with the standard fluff, as we’ve talked about online savings accounts a ton here. You know the drill: Rates that are slightly higher, online only option, easy sign up process and the like. In essence, it works.
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Some people have a love hate relationship with Laundry. On the one hand there is something very satisfying about looking at a pile of sweet smelling clothing all folded up and put away; on the other hand, it never seems to end. Doing laundry is a regular endeavor for most people, teenagers aside, but the expense can eat into your budget. Here are some simple suggestions to help you cut costs, but still get the job done right.
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Are you sick of the low yields of CDs? I am. Many of you have CDs that are coming to maturity soon, and Doug is one of those people with this very dilemma. Where should he put his money? Where would you?
I have placed funds in a 10 month CD (21,500) @ 2.030% that is due 3/18/10 and another CD (15,000) @ 2.470% due in Nov, 2010.
Additionally, I transfer $200 a month to a Vanguard 500 Index fund – My question is where would you suggest I place the funds from the CD that is due next month? and how do you feel about my Vanguard strategy? You gave me good advice before and know by my questions that I am quite the novice. Many thanks in advance.
Let’s tackle the two questions separately. First, the one about your certificate of deposit (CD), and then the Vanguard strategy.
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Depending solely on other people for your investment decisions can mean dying a slow death.
Over the last few decades, the switch from employer-managed pension plans to self-managed retirement accounts (i.e., IRAs and 401k’s) has turned each person into his or her own pension fund manager.
Financial advisors often compare this switch to a scenario in which a person is given a room full of medical equipment, a few medical reference guides and websites, and told that she’ll now be in charge of providing her own medical care for the rest of her life.
The natural conclusion to the analogy is that we need professional help. We need doctors. We need financial advisors. And that’s likely true.
But it doesn’t let us off the hook for educating ourselves.
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