Wednesday, October 10, 2012
As Adrian Monk would say, "Ok, here's what happened..."
"Dog knew that Master was the recipient of an annuity, but that Master was a rather shiftless character who always managed to spend far more than he received from that annuity and was gradually teetering toward insolvency. Dog realized that if this continued, he'd find himself on the street- and all because stupid Master was so stupid with money.
Dog couldn't let that happen- so Dog came up with a plan. Dog managed to convince Master to call Peachtree Settlement Services and sell his Annuity for a lump sum of cash. Suddenly there was money for cars and new doghouses and bones.
But Dog STILL had a problem- Master was as bad as ever with money. He was going through that lump sum at a record pace. If Dog didn't do SOMETHING, he was going to find himself right back where he was before Master called Peachtree- with an empty dog dish, a leaky dog house, and an annoying lack of chew bones.
So Dog arranged to murder Master in his sleep, and bury Master in the backyard. None of the neighbors noticed anything unusual- after all, Dog was always digging in the back yard. He's a dog, after all. And because Dog had also convinced Master to call Legal Zoom months earlier, Dog knew that he would be inheriting what was left of Master's lump sum.
But at the Reading of the Will, Dog received an unpleasant surprise- Master hadn't left him his money in a lump sum, but had set up another annuity. If Dog was going to live the kind of life he wanted- lots of eating and sleeping and licking himself in between checking with his Edward Jones guy- Dog had to get rid of that annuity. Naturally, Dog called Peachtree Settlement Services again."
As Dog is lead off in....ummm....paw cuffs....he gives Monk (or that other network's Not Monk Ripoff So Stop Saying He Is, the Mentalist) a sidelong "I almost got away with it, I hate you but I also admire you" glance. Roll credits.
Seriously, though- what DID happen to that Master guy between commercials? And who is in that car that parks in the driveway in the first commercial? And what use does Dog have with the convertible in the second commercial?
Man, I really think about this stuff way, way too much.
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Quite a business these people have. They must purchase the rights to the settlement, then pay the person a lump sum much less that the settlement value. Like the lump sum of a lottery jackpot is a lot less that the actual value (And don't get me into THAT!)
ReplyDeleteFor example, some guy gets a settlement for 1 million dollars, and will receive it in an annuity of 50K for 20 years. (I have no idea how they figure annuities, so this is just something I'm pulling out of my orifice.) Peachtree comes by and offers to give him a lump sum of 750K in exchange for signing over the annuity to them. So, they make 250K on the deal. That's like a loan shark that you're paying in advance.
I'm sure it's something that sounds really nice on the surface, but I'd rather get the annuity, knowing that I will have a set budget for a long time, with reliable money coming in each year. I wouldn't say no to a lump settlement, provided it was the entire amount all at once, but I'm not going to shortchange myself on a good percentage. Especially considering that it would be a settlement from something that was obviously traumatic or harmful enough to be worthy of a large settlement.
As I understand lotteries, winners of big jackpots are given a choice- a lump sum amounting to a certain percentage of the pot, or an annuity spreading the entire pot over a period of twenty years or so. I've heard interviews with portfolio managers who argue that taking the lump sum, while costing the winner some money, is actually the better option because the cash value of the annuity declines with inflation over time, while the lump sum could be invested and turned to better profit. Considering the lottery's clientele, my guess it that more often, taking the lump sum is just a shortcut to bankruptcy. Annuity brokers like Peachtree just help the suckers along.
DeleteMy problem with the lottery lump sum is that it amounts to false advertising. If the winnings are listed as a certain amount, then that's what the winner should get, annuity or no. The fact that the state knows that the annuity will only add up to the lump sum total due to inflation just means that they are lying on both counts as to the advertised value of the jackpot.
DeleteYou have to wonder how brazen these people are going to get. It's not bad enough that they target people stupid enough to think "I have an iron rice bowl but I need to blow it all on impulse purchases now" or the like; their smiling as they get people to hurt themselves is sort of sickening.
ReplyDeleteIt seems to me that the guy and the dog in these ads act as if the annuity is supposed to provide a cushy, free ride- a permit to overspend. In real life, if you have no money in the bank, if your credit cards are maxed out, if your mortgage is more than you can pay each month- unless you've been hit with some kind of medical emergency, you are living beyond your means. A settlement isn't going to fix your crappy spending habits. It's just a mirage, but it's one shared by a depressing number of people- "if I just had a lump of money, I could pay off my debts and I'd be fine."
DeleteAh, but there's the thing. No one in that sector has any real interest in teaching people to live sensibly.
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