The yield on Wholesale Income contracts is higher simply because the seller of payment rights is selling at a discount.
These are existing, fully-funded payment obligations from top-rated billion dollar companies. A buyer (you) becomes the assignee of an existing payment stream - a note receivable bought at a discount.
Lower price means higher yield.
Wholesale pricing means higher income for you.
This source of retirement income is extremely safe. When all factors are considered, many experts believe this is one of the safest assets on the planet.
DCF only buys streams funded by highly-rated life insurance companies.
Transactions are administered by an FDIC member bank to manage all payments.
DCF engages expert legal counsel to perform due diligence on all assets, and sells ONLY after confirming all details.
Buying a structured settlement income stream is like buying any other investment, except you'll get a much higher yield on this extremely safe source of income.
Discounted cash flow is a hard concept for a lot of people, but it’s at the heart of this market.
$1000 in 10 years is worth $675.56 today at a 4% discount rate.
There are 10 years of deferred, compounding accumulation, which means the purchase price today is just $675.56. This will grow @ 4% and accumulate to $1,000 in ten years.
Using the same discount rate of 4%, a payment stream of $1000/ month for 120 months (ten years) costs $99,102.51 today, and generates a total of $120,000 in monthly payments. Because the payments start immediately, each payment includes payout of some portion of the principal and part of the payment is interest.
As principal is paid out with each payment, that part is no longer accruing at the discount rate. That means the total amount of interest earned on a ten-year income stream is much lower than the total interest earned on a ten-year deferred lump sum contract where interest is accruing and compounding for the entire period.
Insurance companies are not issuing contracts that yields 3% to 4% in this marketplace. Rather, sellers are willing to sell their existing payment rights (and in some cases their existing annuities) at a wholesale discount that allows you to achieve a 3% to 4% yield.
This is how you can now buy income at Wholesale prices. DCF finds the Wholesale Income deals, puts them into inventory, and now you can buy them without all the "middleman fees" involved. We run a lean, mean fighting machine and you get the benefit.
In summary, investors considering period certain Single Premium Immediate Annuities (SPIA’s) or using withdrawals from Fixed Annuities, Variable Annuities, or Indexed Annuities for cash flow, will find a DCF Wholesale Income a higher yield alternative.
DCF Income Payments are an excellent, high-yield alternative to other fixed income investments. In addition, they can also form a high-yield, guaranteed income source for risk-averse investors, or to fund future obligations.
Here's an example scenario:
A couple has a wide disparity between their ages (60-year-old man, 50-year-old wife). Traditional joint life annuities will offer very low payouts for this couple.
However, DCF Income Payments can be used to produce income for any buyer, or buyers, and of any age. In this scenario, the couple may use Immediate Income DCF Payments to produce Income Now for a period of years, then use other tools to protect their money and produce income later, thus earning a higher yield than any other safe money option.
The typical DCF Wholesale Income buyer is a safe-money investor seeking an above-average yield, with very low risk and zero volatility (like you get with bonds and stocks).
Wholesale income streams can be immediate income, short-term lump sum, long-term lump sum, or a mixture of all of these.
It all depends on what you need and what will help you get where you want to go.
Either way, buying super-safe income with wholesale pricing is a great way to secure a part of your investment portfolio.
Call or email to request a custom split, make a request for a particular payment stream or lump sum, or to hold a payment stream off-market for 48 hours.