by Structured Settlement Watchdog
Consumer Affairs.com, a company that purports to help consumers, badly flunks basic finance.
ConsumerAffairs.com can't even properly articulate (or calculate) what present value is. That is really sad given that present value is a critical ingredient to the cash now for structured settlement "bouillbaisse".
ConsumerAffairs.com says "the discount rate offered for a lump sum payment on a structured settlement is similar to the interest rate that consumers pay on a standard consumer loan. The company buying the settlement wants to do so at a discount in order to turn a profit. For example, if you have a $100,000 structured settlement, a company may offer you a 20 percent discount rate, meaning you will receive 20 percent less than the value of your settlement, or $80,000. The lower the discount rate, the better it is for the consumer, because that means you will receive more money".
$100,000 discounted to present value at 20% for various time periods
6 years, PV is $33,489.80, a total discount of 66.51%
5 years, PV is $40,187.76, a total discount of 59.81%
4 years, PV is $48,225.31, a total discount of 51.77%
3 years, PV is $57,870.37, a total discount of 42.13%
2 years, PV is $69,444.44, a total discount of 30.56%
1 years, PV is $83,333.33, a total discount of 16.67%
ConsumerAffairs.com says it is not a government agency and may be compensated by companies displayed, including Seneca One, one that is no longer in business,LOL
Relying on structured settlement factoring companies for financial advice is a crapshoot.