New International Banking Solution for Small Business and Digital Nomads

One of the significant hassles of a the new digital economy is that national borders are largely irrelevant to digital businesses but the banking infrastructure is still stuck in the past. Dealing with international payments is a hassle and can be expensive.

Transferwise has been providing good service for years in helping people move money between currencies at transparent and reasonable rates and with good service. They have a very interesting new service: Borderless banking. They allow you to create an account based on many countries in Europe as well as in the USA (about 30 states so far).

This is a great service, as I have written: finding an international business bank as a digital nomad is challenging.

You may hold funds in your Borderless account in 15 different currencies at the this time. You may send money to someone else using 50 different currencies via Transferwise. With a Borderless account you will be able to accept payments as a local company from Europe, UK and the USA – those paying you can send electronic payments as they normally do using their bank (the process is seamless to them, they treat your bank account just like any other they make payments to).

image showing the currencies Transferwise allows

Transferwise allows you to hold Borderless balances in these 15 currencies.

The fees are mainly a fee to change currencies (often between .5 and 1%) which is very reasonable. So if you hold money in USD and want to pay someone in Mexican Pesos you pay 1% (reduced to .7% over $10,000). USD to Indian Rupee is .9% (reduced .7% over $10,000).

Importantly currency conversion takes place at the real mid-market rate for the currencies (many banks hide fees by giving you bad conversion rates).

In checking costs on their site I have noticed changing from USD to another currency is often higher than from another currency to USD. For example, Euro to USD is 1%, USD to Euro is .5%. USD to Singapore dollar is 1% (reduced to .5% at $5,000) while the reverse is .5%.

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Insurance as a Digital Entrepreneur

Insurance is one of the important aspects entrepreneurs, even sole proprietors, must include in their business plans.

Insurance for freelancers
If you are starting a small business or simply going it alone, make sure you have insurance that will cover the unexpected. Many freelancers starting out believe their insurance needs are similar to those of any other individual, but there are business considerations that influence what kind of insurance freelancers should choose. It is important to be covered in case of lawsuits and unforeseen circumstances that could arise related to your business. You may need insurance in addition to the regular home, health and auto insurance that everyone needs (assuming you have an auto).

Indemnity and Liability Insurance
Indemnity insurance is a fundamental starting point for any business, including freelancers. Indemnity is also known as personal liability insurance and it provides protection cover in the case of lawsuits by clients and customers who allege negligence through error or omission. This is an example of how a simple mistake, even merely an alleged one, can land you in court and cost you a lot of money. Indemnity insurance covers cases brought in civil court but not a criminal court and operates on a similar principle to malpractice insurance. Even minor errors can end in lawsuits and can begin with a simple accusation of false claims or an allegation of misleading advice given by you as a consultant.

You may be familiar with liability insurance from your auto or home or rental coverage. Liability insurance could provide financial protection if someone is injured on your premises. If you feel you need guidance concerning whether liability insurance is for you, speak to local insurance agents if you have questions.

This coverage can often be purchase from the same company you purchased you homeowners insurance from. Often when you purchase multiple types of insurance from the same company you will get a discount. Still it is always wise to get several quotes from different insurers.

Check Your Existing Insurance Coverage
You may feel that your home, auto, and life insurance policy that you have now is sufficient to cover your needs as a freelancer. However, it is worth double checking whether your existing policies are sufficient if you change your situation (for example, open a side business or become a digital nomad). For instance, you may feel comfortable that your home office is covered, but make sure that all the contents of your office space are insured. If you use your car for driving clients around and marketing, make sure these work activities are covered under your current auto insurance plan.

Your life insurance policy, whether it is 10, 20 or 30 years, should reflect your income as a freelancer. If your income fluctuates, talk to an insurance agent about what kind of life insurance is right for you. As a freelancer, you should make sure you have your own health and dental insurance, and you may decide on plans designed especially for freelancers. In addition, disability insurance is a very important and often overlooked type of coverage.

Media Insurance
You may never have heard of media insurance, but it is becoming more popular in an environment in which a few bad reviews on social media can seriously harm a business. This type of insurance can protect you in defamation and libel suits which can involve expensive legal fees.

As you branch out with your career and decide to freelance, keep in mind that not only are your finances taxes different, but your insurance needs will change as well. Consult with an agent concerning the best insurance solutions for you and your family.