Strategic Capital has built a specific program for attorneys to help meet requirements for cash to diversify their investments, to reduce portfolio risk, to improve their lifestyle and/or to provide cash to run their practice.

The creativity of Strategic Capital is an important differentiator:

• No aggregation of payments with other attorneys is required for litigation fee payments from mass torts- this is important because it allows each individual attorney to make the personal choice for their situation- perhaps opening their own practice, choosing to retire, fund a child’s education, pursue new cases, fund marketing or advertising, or simply paying case expenses.
• No minimum amount to be sold is required for lump sum payment. We work to the individual’s need and requirements.
• Fair rates.

For payments that take place over a number of years, the attorney has to consider:

• The financial strength of the payer over time
• If a payer’s ability to make a payment is compromised or is under threat, the attorney can sell the payments and invest the money in a stronger company or industry thus diversifying their holdings and minimizing risk of payments.
• The impact of inflation on long term payouts diminishes the buying power of the payments. It is often in the best interest of the attorney to obtain a lump sum and invest the funds responsibly with the assistance of a qualified financial advisor over a diversified group of investments.

Here are few other costly money blunders you should avoid that we have found:

Thinking of today and not tomorrow

We all want to feel good.  And sometimes we make the mistake of thinking that buying stuff or going on holiday will make us feel good.  We will certainly feel good for a short time when we spend money on those types of activities.  But, if we use credit to do those kinds of things, or if we spend all our money ”today” and don’t save money for our future, then we will not feel good or be happy in the long term.  We will feel good and be happy for a week or two on holiday or for a day or two after we buy something, but the rest of the year we will feel stressed and unhappy – it may not be worth it.  We need to balance our spending and our saving.

Motor toys – the biggest cash drain

A big mistake is to spend too much money on the latest model car.  In fact, a big mistake is to spend too much money on any of the latest toys, whether they are cars, cell phones, TV’s or any other gadget.  Try to make your “things” last longer, don’t buy the latest model, and then put the money you would have spent on the latest toy into your retirement account.

You don’t have a firm budget

One of the main reasons why people can’t get out of debt, or are in debt to begin with, is because they don’t stick to a budget. Budgeting is the only way to truly manage how much money flows in and out and see where you can make some cuts to your spending. If you budget correctly and realistically, and you have the will power to stick to it, you will always find a way to control your living expenses and save for your future.

Misusing your credit cards

If you only pay the minimum on all your credit cards, you’ll never pay them in full and you’ll end up paying way more interest than what you had initially spent.  Credit cards should be used only for the convenience of not having to carry cash.  Credit cards should not be used as an easy form of borrowing – they are too expensive (their rates are too high) and you should not borrow money for your daily living expenses.  I know this may sound counter intuitive, but it’s always better to pay off the credit card with the smallest balance first and then work your way up to pay off your larger balances. If you first repay the smallest credit card balance in full, that’s one less minimum balance to worry about.

Living  beyond your means

Too many people spend more than they are bringing in.  People like to spend money on new things, on eating out, on making sure that they are looking good !  That’s ok, if you can afford it, which means that as long as you are saving some money and spending less than you are earning, then go ahead and spend, spend, spend.  But, if you struggle to make ends meet every month, or you see your credit card balance go up every month, then you know that you are spending more than you are making, and you are heading for a pile of stress and unhappiness.  Do whatever you can to stop doing that!  It may be uncomfortable for you at the start because you feel that your standard of living is going down.  BUT, you will be much happier at the end, because your standard of living will actually go up, as you stop paying too much interest, as you save more, and as you have more money for investment and retirement.

No one is perfect, and it’s easy to make a money mistake every now and then. But not learning from your financial miss-steps is silly and can cost you tens of thousands over the years.  for the next few days we will be posting costly money blunders you should avoid that we have found.

Not paying off your debt

So you’re carrying a big balance on your credit card year after year, you still have student debt ten years after graduation, and your car loan has more mileage on it than your vehicle. What are you doing? Debt is not your friend, and paying all that interest is keeping you from financial freedom. Get the debt load off your back by paying more than the minimum balance on your credit cards and by making a special effort to pay off ALL your debt.

You don’t know how much money you owe       

If you don’t know exactly how much money you owe to your various creditors, you’ll never be able to accurately manage your debt and pay it off. Don’t run away from your bills – calculate how much you owe to the last penny and then make a plan that you can stick to in order to pay it off – even if you can only manage to pay a tiny bit off at a time.

Not paying yourself first – a.k.a. not saving enough

Making steady contributions to your retirement savings plan could help you build a bigger nest egg and retire sooner.  It is so important to save a little bit of money from every dollar you earn.  You pay your creditors the money that they want, but so often we all forget to pay the most important person : ourselves !  That’s because at the end of the month, there is nothing left after we’ve paid all our bills.  Here’s a better way: pay yourself FIRST, just a bit, and then pay everyone afterwards.  You will be amazed at how your savings or retirement fund will grow.

Misuse of credit

Loans should not be used for consuming things.  Loans should only be used to buy something that you think will be an asset and that will be worth the same or more in the future. That’s the way to get ahead.  If a loan is used to buy things that we use , then we will fall further and further behind, because, at the end of the day, we will still have a loan, but we will have nothing to show for it.  So, taking out a loan or a line of credit to buy something that should go up in value, like a house or a business is a reasonable action.  But to take out a loan or carry a credit card balance to buy things that we use or that go down in value, like food, or restaurant meals, or a TV, is not a good thing and should be avoided.

The best financial planners advise their clients to be prepared for life’s events, planned ones as well as surprise ones.

Some of us are more able to plan for life’s twists and turns, but most of us do not have the financial assets to prepare in advance for life’s expenses, it doesn’t matter if they are expected, such as weddings, or if they are unexpected surprises, such as medical emergencies or a collapse in the housing market.

Financial planners recognize that life comes with surprises. As Mr. Rick Annaert, President and CEO of Manulife Securities, an affiliate company of John Hancock Financial Services, said in a recent interview, “You can’t prepare for all of life’s events, of course”.  He explained that “Life is better when you’re prepared. Financial planning helps you prepare for life’s most significant events – your children’s education, the wedding of a son or daughter, your lifestyle in retirement, being able to care for your elders. You can’t prepare for all of life’s events of course, but when you identify and plan for most of them, life is just better. Financial planning makes that happen.” **

Financial planners say that having a financial plan helps families to be prepared for planned or voluntary financial obligations like weddings and kids’ college expenses, as well as for unplanned or involuntary financial obligations such as an illness or losing a job or helping a family member.  A completely ready financial plan is a wonderful objective for all of us to try to have, but most people live life without having the cash in the bank to deal with life’s unexpected events and changes.

In this sense, annuitants receiving structured settlement payments are among the fortunate few who have assets they can access in times of need or financial stress.

According to Jane Olshewksi, manager of Investors Group Financial planning programs, families need to be prepared for “life’s bumps and bruises – unanticipated changes such as a serious illness or a job loss, for example, have financial consequences”. **

In fact, annuitants who sell their payments are just dealing with the inevitability that many financial planners see as their most important job – preparing for the unexpected.  We all have to deal with life’s changes and surprises.

None of us has a crystal ball so we cannot be ready for every change, but we all want to be able to react to changes. Some of us may have to sell our investments, or sell our house, or take out a loan – or sell our structured settlement payments.  Annuitants are just doing what we all do: trying to react to life’s changes in the best possible way we can.

Only 1 – 2% of structured settlement payments are sold each year, and it seems reasonable that 1 -2% of annuitants need an escape mechanism to deal with unexpected changes in life’s events, especially in a world of 10% unemployment.

It seems reasonable to us that as long as annuitants are dealt with fairly and reasonably, then what they are doing is ok. The problem is how it is done.

In other words, in times of need, it’s not selling structured settlement payments that is the problem, it’s selling too many payments or selling for too little money that is the problem.

Strategic Capital is here to help annuitants deal with life’s changes. Please call to speak to our experts should you have any questions 1-866-256-0088.