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Private unemployment insurance exists – it’s limited, but it exists!

(FINANCE) Entrepreneurs – you know you’re supposed to have six months of income saved up in case of emergency, but another cushion is private unemployment insurance – it exists!

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Everyone knows that it’s important to have that reserve of funds stashed away in case of an emergency or a layoff, but it’s often hard to establish it—especially as a young professional or an entrepreneur. Even more daunting is building that reserve of funds to cope not only with a potential emergency, but a job loss.

If you lose your job, you may be eligible for unemployment benefits from your state — depending on a whole host of factors, including cause of termination and your classification as an employee. Often those state benefits are very limited in either duration or in payment, which doesn’t provide the newly minted job seeker with much in the way of time or funds to keep things afloat while they look for their next job. To offset that limitation, there are private unemployment solutions that do exist, albeit limited in scope.

For years, IncomeAssure, which began in 2011 and was issued by SterlingRisk and backed by Great American Insurance, was the largest private unemployment insurance policy. With about 1,000 active policyholders and over $1 million in claims paid out as of 2016, the policy is no longer accepting new applications for coverage as of late 2018, but is still insuring those with an active policy.

“It has been disappointing that we haven’t been able to find a cost-effective way to get the word out that this exists,” David Sterling, SterlingRisk’s Chairman and CEO, said, speaking to The New York Times in 2016. “It’s also understandable. If nobody is aware that something exists, it’s hard for people to find it if they don’t know to look for it in the first place.

With the closure of IncomeAssure as an avenue for new coverage, SafetyNet is another possibility for private unemployment insurance, depending on where one lives. Presently available in 10 states, SafetyNet provides their policyholders with a one-time lump sum payment between $750 and $9,000, depending on the coverage option selected at the time of inception. The monthly cost of SafetyNet varies by state and protection level, and is far less than the traditional policy that was offered by IncomeAssure, as the payment is correspondingly reduced as well. However, as a lump sum option, the ability to quickly access needed cash is a boon to those who may find themselves in need of it.

As with most insurance plans, there are certain exclusions to the SafetyNet policy. These include:
• A pending job loss that the client was informed of prior to purchasing the coverage, or job loss due to acts of war, criminal misconduct, or nuclear/natural disasters
• Job loss due to quitting or retirement, or are termination for cause, including for poor job performance and improper workplace behavior
• Any job loss within the first 90 days of coverage
• Any disability that starts within the first 6 months of coverage if caused by a pre-existing condition treated in the 6 months prior to coverage
• Any disability that occurs in the first 90 days of coverage, or any disability due to normal pregnancy, alcohol or drug use, or elective surgery
• Normal and routine downtimes and workforce reductions for seasonal and other jobs (like construction) or job loss because the task the employee was hired to do was completed or the time period covered by the employment agreement came to an end.

While no one would argue an insurer’s right to protect itself against issuing a policy to cover employment loss for those who sought to quit, retire, or get fired through poor choices on the job, some of these terms should be a caveat emptor for those who have medical conditions that may extend beyond FMLA coverage or whose workplaces are in areas prone to natural disasters, as neither of those conditions may be covered.

For those who are classified as independent contractors, however, the market for private unemployment insurance remains limited. In most states, independent contractors aren’t eligible for unemployment benefits, and neither IncomeAssure nor SafetyNet extended their protections to that segment of the workforce either.

For independent contractors, facing periods of unemployment is one of the hazards of the role. When such a period comes, the independent contractor should invest the time to review the conditions of the work that they did for their last employer to ensure that they were classified correctly as independent contractors, and weren’t mis-classified employees, who would be then eligible for state unemployment protections. (The IRS has simplified the independent contractor test to three broad factors with 11 conditions: behavioral control, financial control, and type of relationship).

Although the marketplace for private unemployment insurance appears to be limited, it’s worth it to ask your insurance professional of any options that may be available to you in your segment of the workforce as a part of your annual insurance review.

Roger is a Staff Writer at The American Genius and holds two Master's degrees, one in Education Leadership and another in Leadership Studies. In his spare time away from researching leadership retention and communication styles, he loves to watch baseball, especially the Red Sox!

Business Finance

Poindexter helps handle finances so you can focus on your business

(FINANCE) Poindexter is a startup that helps you manage financial questions so that you can build you business, not spreadsheets.

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Balance sheets, cash flow statements, compliant income. These are phrases you come across every day in the business sector that also bring another word to mind: confusion.

Luckily Poindexter is here to help. The startup was created as a resource to help businesses make profitable decisions that lead them to success.

Poindexter uses simple business modeling software to generate business plans that users can easily understand. It was built mainly for startups and small businesses that may not be in the position to afford a financial expert.

There is no need for prior financial or excel knowledge to use Poindexter.

Their motto is “build businesses, not spreadsheets.” They don’t want the technical side of finances to hinder businesses, so they are simplifying the process.

The software offers various features to create businesses’ specific financial forecasts. These features include tracking marketing expenses, estimating ROI, comparing alternative projects and defining customer acquisition goals. In addition, implementation is easy.

Just like every aspect of a business constantly changes, the budget must adapt as well.

Users of Poindexter are able to fine tune their budgets and test out assumptions. This allows for the software to help create a unique financial plan for success no matter what the business is.

Business owners can think of Poindexter as their automated financial planner. It will still offer all of the advice of an actual financial planner while you remain in complete control. For the creators of Poindexter, the goal is simple: to aid innovators in making smart and profitable business decisions.

They eliminate the hassle, and emphasize achievements that will keep you on track to reach your financial goals.

Anyone can try Poindexter for free. Fees will only start as you add more projects and premium features. The software will continue to be updated as they gather feedback from users.

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Business Finance

How to spot and avoid crowdfunding scams

(TECH NEWS) Crowdfunding has become ripe for scams, don’t be a sucker — here’s how to spot ’em.

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When it comes to your personal life, you don’t want to be on the receiving end of a crowdfunding campaign because if you’re turning to GoFundMe or YouCaring, it means your house has burned down, you have cancer or your dog has died.

We regularly see these campaigns pop up in our social feeds and for the most part, we believe them because they’re our friends, they’re in need and we trust them so, of course, we pitch in.

However, some people use crowdfunding to fleece you. By now, you’ve probably heard of the couple from New Jersey who teamed up with a homeless man to raise over $400,000. The campaign was a scam, the cash was split and now these crooks are facing some serious consequences in court. Ugh.

We shouldn’t need to write this article, but some people suck and they’re out there duping us. Here’s how to spot them.

This should be obvious, but do not give money to people you do not know or do not at least tangentially know. It never hurts to scroll through the donor list to see if you recognize any of your friends or acquaintances there. If you do and have questions, reach out to them before you reach deep into your wallet.

What about victims of natural disasters? Offer your money to emergency funds run by non-profit organizations. Anyone can create a crowdfunding campaign, but in times of crisis many platforms create verified campaigns.

If the objective of the campaign is unclear, do not donate. We’ve all come across campaigns that are strangely worded or lack enough specifics to piece together a plausible story. If it feels like a Nigerian Prince is the campaign administrator, close the tab.

If a campaign’s photo looks fishy, do a reverse image search on Google to help validate that fishy feeling. If the search yields a lot of results for the photo, scammers have stolen it and are using it to tug at your heartstrings.

Most campaigns run for a very short amount of time, typically a couple of weeks and rarely more than a month. While there is generally a final social push to get to an unmet goal, there are rarely open-ended campaigns. Again, if the goal is unclear or out-of-reach, move on.

We’ve all seen campaigns that are truly gut-wrenching – deaths of loved ones, fights with cancer, entire villages wiped out. As with the case of the three jerks from New Jersey, if it feels too good to be true, it probably is. While some sites may be able to reimburse your donation, others won’t and nothing feels worse than falling for a scam AND losing your money.

And so, dear friends, this is why we at The American Genius almost never, ever write about crowdfunded projects. We care about you and we want you to use your money to help your real friends, fund YOUR next project or pay off your student loans.

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Business Finance

Is futures trading a viable side hustle?

(FINANCE) Futures trading sounds overwhelming, but if you do your homework, your income could be padded for the entrepreneurial downtimes (we all have them).

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As an entrepreneur, it’s always helpful to have multiple streams of income. This allows you to remain afloat, even when one source of money dries up. And while some view it as risky, trading futures yields significant upside that simply can’t be replicated by other hustles and investments.

What is futures trading?

A futures contract is basically an agreement to buy or sell a physical asset on a future date at a specified and agreed-upon price. Futures contracts are commonly attached to things like oil, gold, silver, coffee, and even orange juice.

“Futures contracts are standardized agreements that typically trade on an exchange,” NerdWallet explains. “One party agrees to buy a given quantity of securities or a commodity, and take delivery on a certain date. The selling party to the contract agrees to provide it.”

Farmers often use futures contracts to offset risk that could come from sudden price corrections in their produce. Airline companies may use it to avoid unexpected increases in jet fuel prices (while fuel distributors use it to ensure guaranteed demand at a later date).

But futures trading isn’t just for businesses. There are also speculators and investors who use futures contracts as financial investments.

As NerdWallet mentions, “These types of traders can buy and sell the futures contract, with no intention of taking delivery of the underlying commodity; they’re just in the market to wager on price movements.”

Within the context of this article, this is the type of futures trading you would be doing. You don’t have to have any interest in the actual underlying commodity. You’re looking for price movements that can be cashed in on.

And if you do it well enough, you can potentially make thousands of dollars per month with relatively minimal upfront capital investment.

Making futures trading a viable side hustle

Despite what some may tell you, trading futures is neither easy nor passive. It requires knowledge, patience, and strategic execution. However, it does provide realistic opportunities for significant gains. And as an entrepreneur with other projects in the works, it’s a viable option for making supplemental income on the side.

But in order to be successful, you’ll need to do the following:

1. Learn the basics.

Trading futures is simple in theory, yet complex in practice. It’s imperative that you don’t move too quickly. Grasp the fundamental building blocks of what futures are and how you trade futures contracts before trying your hand at the process.

It’s worth noting that there are futures trading simulation platforms that can be used to test out strategies and figure out how things work without risking your money. It’s highly recommended that you use one of these before proceeding.

2. Find a futures broker.

An inexperienced trader shouldn’t attempt to trade futures without the help and guidance of someone more experienced. It’s recommended that you find a futures broker, who can supply you with the technologies and resources you need to make educated trades.

“The right broker provides the digital tools necessary to seamlessly research, customize and execute trades and monitor market activity,” RJO Futures explains. “You’ll want access to fast price updates, the latest breaking developments, market-leading research and all of the technical and statistical data needed to make informed trades.”

With a futures broker, you’re still in charge of making moves. You simply gain access to insights that help you make smarter decisions. This is the perfect blend of guidance and autonomy.

3. Always use stops

As you become educated on futures trading, you’ll learn all about stops. These are boundaries you put on your trades that prevent you from losing excessive amounts of money. No matter how smart and skilled you become at trading futures contracts, make sure you always use stops.

4. Diving into futures trading

Trading futures isn’t for everyone. However, as an entrepreneur, you already have some of the characteristics and skills that are required to be successful in this arena. By tapping into your ambition, curiosity, and willingness to stomach risk, you’ll find that there’s a massive opportunity to generate supplemental income without major downside.

Now’s the time to learn about the process so you can get started sooner rather than later.

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