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Additionally the MacArthur grants are divided into quarterly payments over five years, so you're not getting 625k all at once, you're getting 20 payments of $31

by notjack 11y ago

Additionally the MacArthur grants are divided into quarterly payments over five years, so you're not getting 625k all at once, you're getting 20 payments of $31,250, one every three months. That makes it pretty much impossible to blow all of it within half a year.

teddyh 11y ago
People could still get into debt because they know that the money is coming. Look at how many people buy things and assess the price based on the size of the monthly payments instead of the actual total price.
- eli 11y ago
  You could literally go into debt by using the structured payments as collateral for a loan for something close to the full amount up front.
IkmoIkmo 11y ago
Not really, it makes it less likely sure but far from impossible. For one, a guaranteed cashflow contract is something you can sell to lots of different parties for a discounted lump sum right away. Hell a month ago or so there was an article on HN about a iirc mentally handicapped woman who'd received a legal settlement payout because a company had been negligent in letting her live in housing which was filled with neurotoxins (in the paint iirc), and some guy called her up and swindled her out of a large portion of the money by buying her settlement contract and paying her a ridiculously low discounted value. Anyway it happens all the time, most companies sell or buy B2B with 30-60 day payments, and many companies with cashflow issues will sell those future payments for money today. It's not a loan that you pay back at some point when you get the money, rather you're selling a loan/credit (for instant cash) someone has with you who's contractually obliged to make future payments on that to you. And secondly you can incur lots of debt, or spend money you had saved up, knowing it'll be replenished. Either of the two or a combination could let you blow through the money in half a year, not impossible, although it's unlikely.

by notjack 11y ago

teddyh 11y ago

People could still get into debt because they know that the money is coming. Look at how many people buy things and assess the price based on the size of the monthly payments instead of the actual total price.

eli 11y ago
You could literally go into debt by using the structured payments as collateral for a loan for something close to the full amount up front.

IkmoIkmo 11y ago

Not really, it makes it less likely sure but far from impossible. For one, a guaranteed cashflow contract is something you can sell to lots of different parties for a discounted lump sum right away. Hell a month ago or so there was an article on HN about a iirc mentally handicapped woman who'd received a legal settlement payout because a company had been negligent in letting her live in housing which was filled with neurotoxins (in the paint iirc), and some guy called her up and swindled her out of a large portion of the money by buying her settlement contract and paying her a ridiculously low discounted value. Anyway it happens all the time, most companies sell or buy B2B with 30-60 day payments, and many companies with cashflow issues will sell those future payments for money today. It's not a loan that you pay back at some point when you get the money, rather you're selling a loan/credit (for instant cash) someone has with you who's contractually obliged to make future payments on that to you. And secondly you can incur lots of debt, or spend money you had saved up, knowing it'll be replenished. Either of the two or a combination could let you blow through the money in half a year, not impossible, although it's unlikely.