3 ms·

The article said structured settlements are preferred over lump sums specifically because these individuals wouldn't do well with a lump sum. I think it would b

by e28eta 11y ago

The article said structured settlements are preferred over lump sums specifically because these individuals wouldn't do well with a lump sum. I think it would be really interesting to compare what the lump sum value would have been against the structured settlement buyout value, and that could be a reasonable approximation for whether or not the price is fair.

IkmoIkmo 11y ago
No need, you can just value it. It's pretty basic discounted cash flow analysis you learn on your first day of college if you study finance or something like that. And if you apply it you can see you lose almost $1.4m by forgoing the settlement payments for $63k in a typical investment context. Without an investment context (i.e. comparing investing $63k for 35 years, to investing the settlement payments for 35 years, which is the valuation for the company that ripped her off), the nominal amounts are such that she sold $573k of payments for $63k. And that $573k in today's dollars is worth about $340k. She didn't even get 20c on the dollar. It'd literally be like you forgoing your $70k annual salary for the next 35 years, for a one-time payment of $250k. And I'm referring to a unique type of salary of $70k that is guaranteed and requires 0 hours of work. She sold it off for $250k because of a combination of a normal person's ignorance of finance and the fact she's mentally handicapped, too. It's an absolute disgrace and the fact her lawyer didn't have alarm bells going off is quite sad. I'd have easily given her double and I'd still make hundreds of thousands of profit, without any real effort. Hell I could just resell the contract the next day to lines of investors willing to pay even more, including the company that ripped her off. That's how bad the deal was she got.

3 ms·

The article said structured settlements are preferred over lump sums specifically because these individuals wouldn't do well with a lump sum. I think it would b

by e28eta 11y ago

IkmoIkmo 11y ago
No need, you can just value it. It's pretty basic discounted cash flow analysis you learn on your first day of college if you study finance or something like that. And if you apply it you can see you lose almost $1.4m by forgoing the settlement payments for $63k in a typical investment context. Without an investment context (i.e. comparing investing $63k for 35 years, to investing the settlement payments for 35 years, which is the valuation for the company that ripped her off), the nominal amounts are such that she sold $573k of payments for $63k. And that $573k in today's dollars is worth about $340k. She didn't even get 20c on the dollar. It'd literally be like you forgoing your $70k annual salary for the next 35 years, for a one-time payment of $250k. And I'm referring to a unique type of salary of $70k that is guaranteed and requires 0 hours of work. She sold it off for $250k because of a combination of a normal person's ignorance of finance and the fact she's mentally handicapped, too. It's an absolute disgrace and the fact her lawyer didn't have alarm bells going off is quite sad. I'd have easily given her double and I'd still make hundreds of thousands of profit, without any real effort. Hell I could just resell the contract the next day to lines of investors willing to pay even more, including the company that ripped her off. That's how bad the deal was she got.