Reasons to Sell
Individuals and business sell income streams (future payment or Series of payments—cash flow instruments) for three basic reasons:
Access
People need or want access to their cash. Cash allows you to solve financial challenges: provide money for college, pay off credit cards, revive a floundering business, pay for a dream vacation, or take care of medical bills. In some cases, people want access to their cash just for peace of mind. They no longer want to worry about liquidity issues, collection hassles, or the financial strength of the person who owes the debt.
Interest of Yield
People will sell their income streams—even for less than face value—because they know that with cash in hand today, they can start earning interest or yield. Interest or yield is what gives us the ability to invest money this year and turn it into an even larger amount of money next year.
Inflation
Inflation eats away at the future value of "buying power" of money. You can buy more with a dollar today than you will be able to
five, ten, or twenty years from now. People sell their income streams because they realize that over time, the payments they
receive will drop in real value.
Small payments over a long period of time have less buying power. A Lump Sum of cash today can provide you with
financial stability and flexibility.
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