At some point during the course of life can, we must decide whether to receive a lump sum payment in cash or in monthly installments over a long period of time. It could be anything from a retirement account, a combination of injury, or maybe you won the lottery. If this situation occurs, you know what is the best option for you? Unfortunately not, it's as simple as adding up the monthly payments if they see more than the lump sum payment. Combined payments shouldstill be much stronger than the single payment scheme will be of interest on the money, if it does not deserve paid in one sum. The best choice for you depends on several factors.
1. What interest will be worth for your money, if you take a lump sum and invest?
2. The interest you earn money when you receive monthly payments?
3. You can manage your money well or you will be tempted to spend when all at once?
4. Money is essential todaily change, college, retirement, or is it just the extra income?
5. Are guaranteed monthly payments in the event of his death?
The first two questions must be examined together. If you are able to earn interest in investing more money than you earn in the form of monthly payments, then you should take a lump sum payment. Evaluating investment options: Treasury bills and certificates of deposit (CDs) earn income on an interest rate lower, while bonds and equitiesYou can receive a higher return with greater risk of loss of principal and interest.
Another important factor is your ability to manage money and buying behavior. If you are unsure of your rent money management skills you want to make a financial adviser or professional to help you flat rate. The other option would be to take payments over time. So you can spend money, how to get it. Keep in mind, this does not mean going to rack up credit card billspayments because you know more to come In fact, if you have a difficult time for managing your money, you propose to give a credit card for emergencies and the removal of the rest.
If money is vital to everyday life, you can help the money now on your situation. However, if a regular income is useful for you, then the execution of payment may be a better solution. On the other hand, if you plan with the money for a certain time in the future, it is probably betterwith the lump sum and reinvest the money itself. In general, you can usually earn more interest on the part of the Front of money and not over time.
Finally, you need to know how to structure the flow of cash. What happens to payments when you pass? Continue to be a beneficiary or to stop them? Guarantees of payment vary widely, so be sure to know the specific circumstances of a cash flow before accepting. I hope this helps, Your MoneyDecision on the method of payment more easily.
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