How To Find An Investment Club

For many people, taking the plunge into investing can be a daunting experience. They may have little investment knowledge or limited funds. Joining or starting an investment club is a great way to learn about investing in stock or real estate. Investment clubs enable members to pool their money for joint investment so you don’t need to have massive capital to start investing.

Finding an online investment club

There are many online investment clubs available. To start with, choose an investment club that fits your investing style and interests. Do you want to invest in stock or real estate? If you are a male (or female), do you prefer to join an all-men (or all-women) or mixed investment club?

Finding a good fit is important for an online investment club. Keep in mind what your main objective is for joining a club. If you are new to investing and need support and knowledge, be sure to choose a club that offers lots of hand-holding for its members.

Another important feature of an online investment club is the forum or discussion board. It allows members to communicate with each other since they don’t meet face to face. They can ask and answer questions. Newbies can learn a lot from others who are more knowledgeable and experienced. People from all over the world can join an online investment club. Distance is not a problem as the internet has made it possible for them to stay connected.

Choose a long established online investment club that is in line with your approach to investing. You should contact the club directly if you have any questions. Enquire about its past and current investment performance.

Finding an offline (or local) investment club

For people who have time to socialize, they may prefer to join a local investment club. These clubs are similar to online clubs except that members meet locally, typically once a month, to discuss and evaluate what stocks to invest.

The meetings incorporate educational talks on various investing subjects. You have the opportunity to hear investment experts speak and share their experience – not from someone with textbook knowledge only.

Local investment clubs are often advertised in the local newspaper classified ads. You may also find them through postings on bulletin boards. Your local bank may also have information about investment clubs. Another good way to find a local investment club is through word of mouth. Ask your co-workers or friends. Chances are they may know someone who is a member of an investment club and can make a recommendation to you.

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Alternate Risk Transfer (ART) – Insurance Strategies

Risk Management

Alternate Risk Transfer is a fancy way of saying alternate methods of insurance and risk management, of which there are many. From the most basic alternative of going without insurance (self-insuring) to so-called “program business captives”, there are a wide variety of strategies from which to choose.

To understand why ART strategies are so popular it is important to understand a few facts about insurance pricing.

►Insurance Premiums are related primarily to economic cycles NOT primarily to claims.

“The claims that recent increases in medical malpractice liability insurance premiums in Connecticut are attributable to overly generous jury verdicts are unfounded. The more likely explanation for the sudden rise in rates is the decrease in investment earnings of the medical malpractice insurers…” Professor Tom Baker, Director, Insurance Law Center, University of Connecticut School of Law

Every time insurance industry profits decline sharply, the industry declares an “insurance crisis” – rates go up sharply, deductibles rise and underwriting guidelines tighten.

►Insurance Premiums have risen much faster than claims.

Median medical malpractice payments rose 35 Percent from 1997 to 2001 (an average of 8.5% a year).
Average premiums for single health insurance coverage increased 39 percent over that time period (9.5% per year). (Source: National Practitioner Database)

►A small number of insured may be responsible for a large percentage of losses.

National Practitioners Database:

For example, in Florida, 6% of the doctors were found to be responsible for 51% of the malpractice claims. 2,674 out of 44,747 doctors have paid two or more malpractice payments. These doctors are responsible for 51% of total malpractice payments.

24 Florida physicians have paid 10 or more malpractice settlements since 1990.

Needless to say, the 94% pay for the poor claims experience of the 6%.
ART Strategies

Conventional insurance markets are one-year indemnity contracts designed to transfer specific hazard risks. Typical features of an ART strategy are:

►Multi-year, multi-line coverage

►Coverage tailored to special need of insured

►Provides coverage not generally available in the marketplace

►Risk retention by insured

There is a multifarious trade-off between risk retention, complexity and cost among the various different ART strategies. Not surprisingly, the plans with the least risk, complexity and expense generally provide the least benefit. As more risk is retained, the greater and greater benefits can be obtained. Of course, complexity and administrative expenses grow as well. Windward Harbor can help you find, execute and manage the right strategy for you. We have listed the basic ART strategies below.

►Guaranteed Cost Insurance Plans

Traditional insurance coverage.

►Loss Sensitive Insurance Plans

Insurance coverage for a specific insured where the final premium is based on the insured’s losses.

►Risk Purchasing Groups (RP’s)

Risk Purchasing Groups were created by the Liability Risk Retention Act of 1986. The purpose of the act was to break through the myriad of state insurance regulation in the hopes of making it easier for groups to purchase liability insurance. The act allows groups of individuals combine to purchase liability insurance while prohibiting states (regulators) or insurance companies from discriminating against them.

►Self-Insured Retention Plans (SIRS)

The primary difference between a deductible and a self-insured retention is that a deductible amount counts against the total limits of the policy, reducing total coverage, whereas a self-insured retention plan provides limits of coverage in excess of the self-insured retention so that the amount payable under the policy is not reduced by the amount of the retention.

►Protected Cell Captives (Segregated Portfolio Companies)

PCCs (SPC’s in certain domiciles) are essentially rent-a-captive companies that ensure complete separation among program participants. According to the laws of specific domiciles, PCCs or SPC’s generally guarantee complete separation of each cell’s assets, capital, and surplus from each other. Because they can achieve economies of scale, rent-a-captives make captive insurance affordable for companies that would not otherwise be large enough to profitably own and operate their own captive.
Windward Harbor LLC owns a BVI licensed Segregated Portfolio Company – Windward Harbor SPC Ltd, which provides rent-a-captive services for selected clients on an annual fee basis. Each segregated portfolio has its own economic ownership, tax Id number and files a separate tax return.

►Self-Insured Groups & Pools (SIG’s)

While the concept differs slightly from state to state, SIGs work similarly in the nearly 40 states in which they are legal. A group of employers form a nonprofit corporation or trust and hire a professional to manage it. This new entity then purchases the insurance, meaning the SIG members essentially “own” their own workers’ comp company.

The group pools the money it otherwise would pay an insurer, earning investment income on funds held in reserve. If a SIG program cuts down on workplace injuries and claim costs, the surplus, or “dividend,” from premiums is returned to members.

Of course, if a company or the group as a whole has catastrophic losses, members pay the difference, up to a limit. Above that point, the group buys excess insurance to offset a single large loss or a combination of losses.

►Captives (See Captive Services)

A captive insurance company is an insurance company that is owned and controlled by its insureds. According to Captive Insurance Companies Association (CICA), the first captive ever formed was in the late 1800s, and was designed to write more cost effective fire insurance policies for New England textile manufacturers that were hit hard by increasing market rates.

Captives gained popularity in the 1980s as a result of the US liability crisis, particularly in the medical arena.

As captives have continued to grow over time, employers are considering employee benefits as a new or expanded coverage. The more recent hard market and changing economy is expected to spur even more and rapid industry growth yet this year.

Single Parent (Pure) Captive: A single parent captive is owned and controlled by one owner, typically the parent organization, and is formed as a subsidiary company. The captive subsidiary underwrites policies for the parent, and solely bears the risks of the parent.

►Group Captive: A group captive is owned and controlled by multiple insureds. They may or may not be related entities or a part of a homogeneous group like industry or trade groups. Typically, companies of similar size pool their risks in an industry captive with customized insurance plans. Similarly, companies of similar size in different industries can also form group captives to enjoy the benefits of a captive model. More recently, associations have been forming association captive insurance companies to offer captive services as part of their membership benefits.

►Agency Captive: Agency captives are companies typically owned by groups of brokers or other insurance intermediaries and are typically structured like rent-a-captives.

►Risk Retention Groups

Risk Retention Groups were also created by the Liability Risk Retention Act of 1986, which provides for streamlined regulation. A RRG is an insurance company in every regard but has one very important regulatory distinction. Every RRG chooses a single state in which to be domiciled and regulated. The act provides that the RRG is then eligible to do business in all states.

►Program Business Captives

Associations, regional producers and corporations who desire to assume some selected third-party exposure.

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Financing a Small Business – What Are the Financial Responsibilities Involved in Running a Business?

Almost every potential business owner is faced with the trouble of seeking for ways in which finance can be acquired to run the business. However, it should be noted that such troubles are not only identified with potential entrepreneurs. Research has shown that even experienced business owners also faced such difficulties. Keep in mind that in seeking solutions to such difficulties, there will be accuracies as well as inaccuracies and these will all determine the success or failure of the business. The above is an indication that starting a business and running the business should not be an end in itself. You must seek for means through which the business will be able to stand the test of survival often posed by its competitors. The following lines are aimed at identifying ways through which a business can be financed, be it incorporated or unincorporated:

Unincorporated Business

This type of business will refer to those that have unlimited liabilities. In most cases, such businesses have not been properly documented and the status of legal personality is absent. There is no distinction between what the business owns from those of its owners. Keep in mind that in the event of any problem, the owners are personally liable for the debts of the company.

Any source of finance on this type of business organization will weigh on the owner. Keep in mind that there is no legal personality in the business and this will deter any lending institutions from providing capital to the business. What is normally open to owners of such businesses is finance through the use of credit cards or some other forms of personal savings. But the problem with using credit cards is great. Remember that you may sometimes make use of these cards out of intuition. It is simple to ‘charge it’.

For this reason, there are lots and lots of lending institutions which will be afraid or unwilling to lend to unincorporated associations. They will not want to place their finances in ventures in which they are uncertain about their future. A good number of such businesses have been known to disregard certain essentials in running the business or even in repaying back their loans.

Incorporated Businesses

These are businesses that have fulfilled all the essentials of setting up a business and that have adequate cover in the event of any crises. Such types of businesses will include limited liability companies or partnerships. In most cases, the records of these businesses are open for appraisal and the administration of such businesses will conform to the required business standards.

It is very easy for these types of businesses to receive the required finances. Keep in mind that lending institutions are more confident of their ability and willingness to pay back. Financing with such businesses will be easily obtained at any phase of the business. Remember that there are lots of individuals as well as groups who will be willing to come in with finance that the business needs. This is however possible only when the appropriate individuals or groups have been identified. This type of situation is known as angel financing. Remember that when a business is properly administered and it has a sound reputation, it will attract more investors. Investors will also find it appropriate to be part and parcel of the current affairs of the business.

Besides the above type of financing, there are also many financiers who are willing and able to invest in high risk ventures, but with an expectation of equally taking home more profits. The business can also make open its shares for acquisition by the general public. In some cases, banks and other finance institutions will be willing to finance these businesses if they see a convincing business plan. However, if you are in search of any means to finance your business, it is necessary to carry out proper research ahead of resorting to any source of finance.

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Hands Off Or Hands on – What Type of Business Owner Are You?

What kind of business owner do you consider yourself- Are you a Hands on Business Owner or do you consider yourself more of a big picture operator that consistently effort yourself to avoid the minutia of the business. I think the majority of us are a hybrid of these 2 approaches.

When running a small business, or involved with a startup business, on an almost daily basis you are faced with the question ” Do I do it myself or do I hire others to do it for me”. Most all are aware of the concept Time is Money- but like so many other business concept we all draw the line in the sand at different places. We are not always consistent with where we draw that line, and find that that line moves as or business moves or the economic climate around our business moves. This question can be applied from basic business task of running to the post office to mail off some stuff or calling some prospects to significant larger issues like hiring outside help to handle your marketing functions, doing my own website, or trying to do my own SEO. I am a business broker and I help business owners and individuals in the process of buying or selling businesses. Selling ones business is a very significant event and very often like so many other decisions a business owner will decide to try to sell the business themselves or hire someone to help sell their business. This decision is part of the never ending series of question a small business owner needs to answer. In my current profession as a business broker if Florida I am faced with these same similar questions on a daily basis. Do I do it myself or subcontract out that task or role. ” Maybe someone else can do it better, but I can do it cheaper”, or “Maybe someone else can do it cheaper, but I can do it better…” Relatively speaking I am a fairly hands-on person.

My previous business I had owned for 20 years I was fairly hands on as well. I helped install our production equipment on day 1 of the business, I worked on the production line, I worked in the truck delivering product, helped troubleshoot our equipment, performed testing and so on. I also set our policies, accounting procedures, QC procedures and company philosophy. I enjoy knowing and understanding as much detail about my business as possible. Ultimately I was able to build a team of 25+ employees that both allowed our business to grow and ultimately allowed me to run the business from 1500 miles away for 7 years. While others may say “I don’t want to know the details- I just want it to work”. People reach business success with both approaches. I have a good friend that owns a Plumbing business and has very little plumbing knowledge- he doesn’t want to. He is a very good businessman, with a very successful plumbing business – he is a big picture, hands-off guy and I think his wife may call me to fix their leaky faucet before she ask him. But again he is a successful business owner. The real question that comes in is at what point does the hands on approach limit your business growth. When does- “I have to do it myself or it wont get done right” approach become business limiting? So many businesses do not make a transition to “count on others” and the business remains a certain size. If the company goal is to stay a certain size then this approach may be both applicable and appropriate. But as one desires to grow a business to a certain size- “letting go” a little control is needed. As working as a business broker in Florida very often I have business owners ask me can I just sell my business myself. Here is how I summarize my true beliefs on this very important question.

Most business owners I know have a fairly full day- to say the least. If your day is full already how can you possibly take on the task of trying to sell your business. And I truly believe this. Assuming selling your business is a fairly involved process how do you squeeze that continuous task into to your already packed stream of work. Maybe you say to yourself, I am going to devote a lot of time and effort towards selling my business, but then what suffers? Does the business you are trying to sell now have the person steering the ship significantly pre-occupied? During a recent speaking engagement I compared the process of running a business to running a marathon and addressed the need to finish strong. Why run the race hard for 23 years or 23 miles and then stumble in for the last year/mile? It is important when one is selling their business to try to finish strong. I believe one of the most important decision a business owner makes its the decision to sell their business. Like so many decisions a business owner has to “do it myself” or hire others to do it. Can I do cheaper? Can I do it better? Do I have the time to do it? Do I want to do it?Some of the similar questions one faces every day waking up as a business owner, but when selling ones business the stakes are significantly higher.

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