Lebron James' Sudden Money Story
John Darer • March 27, 2019
A Valuable Lesson for Structured Settlement Annuitants as Young Adults
Life Changing Amounts of Money and Lessons Learned
Kneading Dough is an award winning series, in which superstar athletes discuss life-changing amounts
of money and lessons they've learned, presented by UNINTERRUPTED and Chase. Episodes features
never-heard-before exclusive content and are hosted by former NFL
player, Andrew Hawkins. Andrew Hawkins' podcast with Lebron James
is excellent and provides valuable lessons not only for young athletes but, in my opinion, would be helpful and interesting to young adults who come into a windfall from the death of a parent, from a lawsuit or have just discovered that they have a structured settlement from a legal case that settled when they were a young child.
18 year olds in 2019 were probably not even potty trained at the beginning of Lebron James' rookie year. Many of them see an all world elite athlete with the trappings of wealth. Lebron grew up in the projects in Akron, Ohio where he and his Mom struggled to make ends meet. They got by on food stamps. Check this out..
The Importance of Allocation/ Paying Yourself First
Lebron learned a valuable lesson from his uncles. In the Kneaded Dough podcast he says "They'd give me a dollar and they'd be like, 'Listen, nephew, go spend 35 cents of it and keep the other 65.' Or, if they gave me two dollars, they'd be like, 'Go ahead and spend a dollar of it, but stash the other dollar." It's a lesson that has stuck with him. After 12 years, just before signing his first contract at age 18, his stash had grown to $1,700.00 A structured settlement is all about paying yourself first.
You have a " job" for as long as the contract runs, that you can never be fired from
You have stability so you can pursue a college or graduate degree
You have stability while you learn a new trade
You have stability while you start a new business
You have income so that you don't have to share a crowded apartment with lots of people so you can make ends meet.
Just Ask Questions
"
Keep in mind with athletes it's a short window. Just ask questions. When do my checks come? When do I get paid? How much up front?" said Lebron in the podcast.
It's especially important to ask questions if you have a structured settlement and you are a teenager or young adult
If you're 18 and you just found out you had a structured settlement set up by a parent when you were a young child, there are plenty of companies out there that have been stalking you, waiting for you to turn 18 so that they can pounce with a money losing strategy of selling your structured settlement for pennies on the dollar. They won't frame it quite that way, because it would hurt their sales pitch, but that's what it is when you get down to it. Speak to someone who has the credentials and the patience to give you space to safely learn what you have to. Get some real financial advice from someone whose primary way of making a living is not based on trying to pick your pocket for pennies on the dollar. There are specialists called Certified Financial Transitionists
Managing Expectations
Lebron makes a poignant comment about his kids and money "They will never understand bottom, At end of the day they have to walk their own path. Appreciate what you have and realize that it isn't always accessible to you". He also says "Saying no to want or need (harder to identify from those) behind on bills, who make unwise decisions. brought on themselves" Lebron said if he did help someone he would give them " 1/2 what was needed and until they paid in full, no more loans'
It's especially important to ask questions if you have a structured settlement and you are a teenager or young adult
If you're 18 and you just found out you had a structured settlement set up by a parent when you were a young child, there are plenty of companies out there that have been stalking you, waiting for you to turn 18 so that they can pounce with a money losing strategy of selling your structured settlement for pennies on the dollar. They won't frame it quite that way, because it would hurt their sales pitch, but that's what it is when you get down to it. Speak to someone who has the credentials and the patience to give you space to safely learn what you have to. Get some real financial advice from someone whose primary way of making a living is not based on trying to pick your pocket for pennies on the dollar. There are specialists called Certified Financial Transitionists
Managing Expectations
Lebron makes a poignant comment about his kids and money "They will never understand bottom, At end of the day they have to walk their own path. Appreciate what you have and realize that it isn't always accessible to you". He also says "Saying no to want or need (harder to identify from those) behind on bills, who make unwise decisions. brought on themselves" Lebron said if he did help someone he would give them " 1/2 what was needed and until they paid in full, no more loans'
I recently spoke with a 25 year old who was targeted and sold a good chunk of her structured settlement payments at 18 for pennies on the dollar. Nevertheless the perception of others around her was that she had this large lump sum and was approached by people about her "new found riches" seeking help. This was a huge misperception for those people, since the structured settlement arose from horrific burn injuries over a large portion of her body, the pain she suffered and will suffer, and the disfigurement. Sometimes its a good idea to take a proactive timeout, what the Financial Transitions Institute refers to as a Decision Free Zone.
Better Shop Around Just Like Your Mama Told You, and now Lebron James
Lebron then gives discusses the importance of shopping around and evaluating different offers related to shoe endorsements. He had a shoe offer from one company as an 18 year old, but had the presence of mind yo see out other offers. The same thing goes to people seeking to raise cash from selling their structured settlement. It's not the greatest move in the world, because yo0u are guaranteed to lose money, but if you have to sell then shop it around. In some cases the differences are life changing,
Rookies Don't Pay For Anything!
Lebron doesn't let rookies pay for anything. He says " don't spend it before you get it." If you're 18 and you just found out you have a structured settlement, just remember you're a rookie. On some teams rookies have to clean the senior team mates boots. With 18 year old and other young adult rookies, the cash now vultures just take them and their structured settlement to the cleaners. Remember you suffered a loss to get that structured settlement in the first place. Now the vultures want you to take another loss.
I look forward to seeing the other athletes stories on Kneaded Dough. I understand that Serena Williams is due on an upcoming show.
I look forward to seeing the other athletes stories on Kneaded Dough. I understand that Serena Williams is due on an upcoming show.
The cap rate on index linked structured settlement annuities is a limit set by the insurance company on the maximum interest rate that can be credited to the annuity based on the performance of the underlying index that also helps provide the downside prtection..
Do your financial resources give you enough road, or will the road run out before you do? A structured settlement annuity helps mitigate the risk of outliving your savings, no matter how long you live. A structured settlement can inlcude one or more customized payment streams and types.
USAA Life Insurance Company, an A++ rated insurance company, issues structured settlement annuities with 1%, 2% and 3% COLAs. USAA Life structured settlements are exceptionally compatitive on lifetime benefit payments with long duration certain periods for ages under 35.
Owners of highly appreciated NY businesses or NY real estate may benefit from a structured installment sale tax deferral program as an alternative to a 1031 exchange. MetLife's structured installment sale program is now available in NY and in all 50 states. Call 888-325-8640 for more info
A qualified assignment is part of the process to establish a structured settlement that enables a Defendant, Insurer, or Qualified Settlement Fund, to achieve a complete novation of the future periodic payment claim established by suit or agreement, through a substitution of obligors.
An annuity and a structured settlement walked into a bar, how do you tell them apart? 4structures' John Darer reviews the differences for you right here.
A lifetime structured settlement annuity turns part of your settlement recovery into guaranteed income you can’t outlive that is contractually guaranteed by a regulated life insurance company. A lifetime annuity is sometimes referred to as longevity insurance.
Structured settlement annuities can be very helpful to the budgeting process by providing guaranteed income streams and deferred lump sum payments tailored to specific budget needs and time frames identified in the settlement planning process.
Structured settlement receivables are often deceptfully marketed to investors as annuities. When the originating structured settlement factoring company buys structured settlement payments in a structured settlement factoring transaction, they are buying a receivable not an annuity.
Avoid constructive receipt if a structured settllement or structured attorney fee is to be established. Care must be taken to avoid constructive receipt.
