by John Darer CLU ChFC CSSC RSP
The August 2011 stock market may be thrilling for professional traders and a clinic for students of economics, but is a reminder to those receiving settlements that represent income that they cannot replace, that there are inherent dangers that could quickly lead to financial disaster.
If you are receiving a settlement because you are disabled and have lost your ability to earn an income from a personal injury, or as the replacement of a breadwinner's income from a wrongful death, pay attention to events that are happening before your eyes!
A 10% drop over 3 days, followed by a violent see-saw all day yesterday which resulted in the Dow being up over 400 points after being down 200 and now the market is set to open sharply lower and give up half of yesterday's "gains". As I type the market has opened and the market in 40 minutes is down over 400 points-almost a smuch as yesterday's gain!
A structured settlement offers safe, stable contractually guaranteed income tax free payments that can be customized to your needs. It may not be sexy, but these days a return on your money (as opposed to a loss) IS sexy.
Recently I received calls from stockbrokers attempting solicit my business. Frequently, their introduction includes a fabricated story about how we previously spoke earlier in the year or how I supposedly participated in a survey. Some make statements that blatantly violate FINRA regulations. Most of their recommendations are entirely worthless. I often humor them by asking for a stock they are currently recommending to their clients so I can observe its performance over time. individuals desperately implore me to invest as little as $7,500 to test their services. Had I followed one such recommendation—a so-called "sure" in Asia—I would have lost 30% of my investment within weeks.
While 30% of $2,500 is $750;
10% of $1,000.000 settlement money invested is $100,000
20% of $1,000,000 settlement money invested is $200,000
30% of $1,000,000 settlement money invested is $300,000; and so on.
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