Many people dream of winning the lottery and what they would do if they had millions of dollars put in their bank accounts. What most people do not realize is that most lottery prizes are not paid out all at once but over time. The Mega Millions jackpot, for example, gives winners one big payment and then pays the rest in yearly payments that take about 30 years to pay off. For some people, this is great. They can pay their monthly expenses and like the security of having reliable income for decades. Other people cannot wait that long and opt to sell their lottery payments to get cash sooner than later.
Reasons for Selling Lottery Payments:
- Start a new business. Many people have dreams of starting a new business or opening their own restaurant but cannot get the money to do that. Many new business ventures fail because people cannot come up with the $30,000 it costs to start most businesses. This can be a great way to use the case from lottery winnings to open a business and do it right.
- Get out of debt. Many people in the United States are burdened with a lot of debt and are not able to pay their monthly expenses. Nearly 64 million Americans, or 35% of the country admits they have trouble paying their bills. In 2015, people owed a combined $943.76 billion in car loans. That’s up from $866.44 billion in 2014. All totalled, Americans owe about $11.91 trillion in personal debt. If you are one of these people, selling your lottery payments for cash may be a good option. It also might save you a lot on interest payments and provide a way to deal with your monthly expenses.
- Avoid bankruptcy. In February 2015, roughly 3,400 people filed for bankcruptcy of some kind every single day. In the United States, nearly 50% of all bankruptcies are caused by medical expenses. If you are in this position and you are considering filing for bankruptcy, you may want to sell your lottery winnings instead. This can be a better way to improve your financial situation.
- Pay for college.Getting a higher edcuation is a great way to increase your earning potential but costs a lot of money. In 2015, Americans owed $1.3 trillion (it was $1.21 trillion in 2014). Going to school without racking up a lot of debt in student loans can make a big difference. If you would like to pursue your own higher education or if you would like to provide for your children (or others), selling your lottery annuity may be the way to do it. Also, most financial aid offices at universities do not help students or parents who receive money from annuities.
- Buy a new home or pay off your mortgage. If you own your own home but your mortgage payment remains one of your monthly expenses, you may want to sell your lottery annuity. Also, if you rent, you might want to use the money you get from selling your payments to buy your dream home. You can also use it to make the repairs and renovations that may be beyond your financial reach right now.
- Enjoy your life. If you have always wanted to travel the world and see certain countries, you can do that with the money you receive when you sell your annuity. You can also plan trips to exotic places or wherever you have always dreamed.
The decision to sell a structured annuity is a big one. Some people pay their monthly expenses and are happy getting regular payments. If you are not and need that money for aomething right away, you should talk to a trusted financial advisor about selling your lottery payments. Take your financial information to this person and go over the pros and cons of selling. Take your time. Do your research. This will help you be sure you are making the right decision for you, your family and your situation.