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Tips To Start a Structured Settlement Business Plus Buyer Plan

Nov 12th 2015 at 11:04 PM

Structured settlements, a common method of paying out large financial court cases and settlements, have been popular in the United States for years and are gaining popularity across the United Kingdom. Not only is it becoming more common for people to receive these settlements, but it is now becoming more common for people to change their minds later and wish to sell structured settlement payments for a lump sum of currency in their hand fast. This can open the door to a money making opportunity for business minded people looking to grow their own investment company.

The Market is Growing

In the United States, there is a very large market of companies – and investors – who purchase settlement payments from people who want to sell structured settlement payments because they would rather have money in hand now. In fact, an entire industry has sprung up around it. As these settlements become more popular in the United Kingdom, the market is opening here as well. This means that investors now have the potential to purchase settlement payments at a deep discount, reaping the rewards as the payments mature. And the market is almost endless; a company in the UK can purchase payments anywhere around the world, and vice versa.

Tips to Becoming a Buyer

Many investors are looking to make money by helping people out in a time of needing, and then earning more money in the long run as the long-term payments keep coming in. It’s a guaranteed income stream and return on investment. Following are a few tips to keep in mind as you consider building a small business around purchasing payments from others:

  1. As with any business, you will be required to pay taxes and other government fees on whatever profit you earn. This may have a major impact on how you file your taxes each year. It also needs to be factored into your business plan and part of your quoting when you are looking to purchase payments.
  2. Again, as with any business, you will want to take things very seriously. You will probably want to begin by drawing up a business plan, hiring an accountant or other financial adviser, deciding what your mission and vision for the company are and how you will carry that out, creating goals for the company as far as function and profit, and so forth.
  3. You also have some choices to make: You could make money by helping people to sell structured settlement payments, not actually funding the sale yourself, but serving as a broker between another financier and the seller.
  4. You could make a business of brokering such sales, or by just managing them. For example, sometimes people will sell only part of their payments. Thus, the remaining payments are divided up, by a management company, with the proper portion sent to each individual. There are opportunities to be this type of organization, or, simply to use such as organization if you do purchase payments directly.
  5. If your vision is to actually fund these sales yourself you will need access to large lump sums of cash (when a person decides to sell structured settlement payments, the payout can be anywhere from a few thousand dollars to hundreds of thousands of dollars).
  6. While the income is theoretically guaranteed, there is always the chance that the annuity company who holds the money could go out of business, and your future returns would be lost.
  7. If you choose to work with a larger annuity buyer, simply as an investor, your returns will be much less than what you could realize if you purchase annuities directly from the annuitant.
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