not only aren't the examples cited by the questioner particularly
unusual neither are they cost free.
if you own an asset with a maturity value of say for the purpose of
illustration, $500,000 and you sell it at a discounted value either in
lump sum or as a series of payments over time, for let's say $350,000,
on this planet that is a cost. the pre-maturity sale of a life
insurance asset, while at times and in the right circumstance a viable
planning tool, it is hardly without cost. it may be hard for you to
follow the cost side of the ledger because the money wasn't in your
piggy bank but all the same you are out the discount on the asset so
liquidated. that is by all measure a cost. if you had five dollars and
now you have three and a half via transaction, sounds like a cost to
me. with the viatical settlements industry approaching two decades of
widespread use as a planning tool, unusual might be a stretch too.
as to the reverse mortgage, another unusual unheard of planning tool
that practitioners have only been using for decades. i'm sorry to be
the bearer of bad news but this too is not cost free. suffice to say
that all those companies engaged in the commerce of originating
reverse mortgages aren't philanthropic. there is a profit motive for
all. without getting too bogged down in details you obviously don't
want, suffice to say that a clear nexus between their profit and your
cost exists. a reverse mortgage is in the end nothing more than a
dissipation of accumulated assets anyway. the alternative to a reverse
mortgage is sell the property and use the equity to pay your monthly
living expenses. all the rm does is allow the elderly owner, as in
your case, to stay put, not move, not sell. but in so doing the owner
is clearly dissipating an asset. that sounds suspiciously like a cost
even beyond the cost of the origination.
as to a reverse mortgage being unlike a 401k or a pension asset
because it is created in the present rather than long term, i think
not. most, almost all, elderly who opt for a reverse mortgage, are
accessing equity they have developed over a lifetime through long term
periodic regular payments of the mortgage loan and some appreciation.
typically they have, through long term efforts, found themselves in a
situation where they own a valuable asset but do not have the cash
flow to maintain it or themselves. the rm is simply a method of
spending equity built over a lifetime while avoiding uprooting
themselves at that stage of their lives. an rm for the most part isn't
like winning the lotto. the equity being spent has been developed over
a long period of time. you could argue that they just bought the
house, paid cash, and immediately took out a reverse mortgage. you
could argue that. if you did your argument would make less sense than
your question, your assessment of the answer or clarification
statement thereof. it makes no sense.
as to truly unusual things an elderly person could do to raise money i
would suggest these as truly in the spirit of your question as they
create cash, aren't widely utilized and are close to cost free:
1) aclf prostitute
2) bank robber
3) social security cheat
4) counterfeiter
5) beggar
6) obsessive coupon clipper
7) deposit bottle and aluminum can collector
8) crime stopper reward tipster
9) 1/2 tab prescription drug seller
10) no purchase necessary to win jingle writer and contest entrant
11) circus performer
12) sell their grandchildren to slave traders
13) accept rental and purchase deposits for property they don't own
14) small business protection and extortion schemes
15) ebay seller of stolen merchandise - crowded field but still some opportunity
16) lotto winner - small cost to play but the roi is really sweet
i hope the some of those suggestions get you started in the right
direction. if you need more suggestions, information or clarification
see if you can get it without burying someone who gave you a real
answer to an ill conceived and weakly constructed question. |
