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People say life insurance should cover 10 times your income, but as a financial adviser I can tell you that isn't always enough

Sat, 11/09/2019 - 3:05pm

I've had life insurance coverage in place since my wife and I had our first child, but I've added to our coverage several times as our family has grown. These days, I have around $2.5 million in term life insurance coverage for my wife and kids, which is probably more than they could ever need if I should suddenly pass away.

Then again, there's a lot to think about and make sure life insurance covers, and there's really no "perfect" formula to determine how much life insurance coverage you should buy anyway. I also know for a fact my family would never think I had "too much" coverage for their needs.

I'm also 100% certain the common wisdom to purchase 10 times your income in life insurance coverage is leaving families at risk. There are a myriad of reasons 10 times your income — or $100,000 in coverage for every $10,000 in salary you earn each year — may not even be close to enough.

Here's everything you should think about as you decide whether or not to follow this popular advice.

Your income matters, but so do your expenses

While term life insurance is mostly intended to replace your income once you're gone, there's a lot more to think about other than the size of your paycheck. You also need to consider how much debt your family has, including how they might pay it off if you were to pass away before your time.

If your family has a large mortgage, several car loans, credit card debt, and even student loans, for example, it's highly possible having just 10 times your income in coverage won't be enough. Even if you earn six figures and buy $1 million in term life insurance coverage as a result, this amount could disappear in a hurry once you start thinking over all the liabilities it needs to cover.

Your spouse may need to stop working

Another reason to buy more life insurance than you probably need is the simple fact that life may change once you're gone. If your spouse has a job they love that brings in a nice income now, that doesn't mean this situation will stay the same if you passed away.

It's highly possible your spouse will need to take some time off to grieve, and it's also possible they'll want to cut down on work hours or even stop working all together once they face life alone — especially if you have kids.

Life insurance should replace your income for sure, but don't forget that it may need to fill in the gaps if your spouse or partner faces a drop in income for any reason. They may desperately want to stay home, but how much life insurance you have may make that decision for them.

Policygenius can help you compare life insurance policies to find the right coverage for you, at the right price »

Have kids? Make sure to plan for college

It's easy to think you don't need a ton of life insurance when your kids are young, but you have to remember that kids don't stay little forever! Daycare bills will eventually be replaced with huge bills for sports and after-school activities.

And the bills don't stop once they reach college. Considering the high costs of higher education, you may want to consider whether you want enough life insurance to pay for all or part of your children's higher education.

Your kids could always borrow the money for school, but giving them a tuition-free degree is something you would never regret. Fortunately, having enough life insurance can make this dream a reality.

There are some things you just can't plan for

Also remember that there are some life circumstances that nobody sees coming. Maybe your entire family is healthy and happy now, but who knows what could happen five or ten years from now.

Having plenty of life insurance can help your family out if your spouse or partner gets sick and cannot work, or even if one of your kids winds up requiring expensive surgery or pricey long-term care.

You can plan for a lot, but you just can't plan for everything. Life insurance can be there to cover any surprise expenses your family might face, no matter what they are.

Life insurance is affordable, so there's no excuse

Buying 10 times your income in life insurance may be common wisdom, but I tend to believe this advice is outdated. Term life insurance is so affordable that it hardly makes sense to go without enough coverage to replace your income and pay off all your debts — all while accounting for life's many "what ifs."

Since term life insurance is so affordable, there's really no excuse to avoid buying enough coverage to help you sleep great at night. Remember that your family will never wish you had less coverage if you pass away — they will either be happy with what they have or desperately wish you would have bought more coverage while you had the chance.

You have the opportunity to leave a legacy behind, but you also have the opportunity to leave your family broke and struggling to get by. This is one decision where you won't get a second chance, so make sure to choose wisely.

Policygenius can help you compare life insurance policies to find the right coverage for you, at the right price »

Jeff Rose is an entrepreneur disguised as a financial adviser, author, and blogger. Jeff is an Iraqi combat veteran having served in the Army National Guard for nine years, including a 17-month deployment to Iraq in 2005. He's best known for his award-winning blog GoodFinancialCents.com and book, "Soldier of Finance: Take Charge of Your Money and Invest in Your Future." He's also the founder of Wealth Hacker Labs, a movement to teach accelerated wealth-building strategies to future generations.  

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Trump plan to save Syria's oil is shaping up to be a public-relations dumpster fire

Sat, 11/09/2019 - 2:10pm

  • President Donald Trump's decision in October to commit US troops and armored vehicles to guard Syrian oil fields took congressional leaders and military officials by surprise, perhaps even more so than his abrupt withdrawal of US forces from the region in the weeks prior.
  • In his reasoning, the president publicly acknowledged the primary purpose of deploying additional troops was to protect the Syrian oil reserves — which compounds the already complicated problems in the region, according to White House advisers, lawmakers, and law professors.
  • "Telegraphing to the world that your only interest in the Middle East is protecting oil is bulletin-board recruiting material for the groups that we are trying to hurt, that we are trying to counteract," Democratic Sen. Chris Murphy said at a Thursday panel.
  • "Being candid, it seems like a totally screwed-up state of affairs, in which the messaging on stuff like that is being driven not by any audience abroad," Joshua Geltzer, a former senior director for counterterrorism at the National Security Council and a visiting professor at Georgetown University Law Center, said.
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President Donald Trump's decision in October to commit US troops and armored vehicles to guard Syrian oil fields took congressional leaders and military officials by surprise, perhaps even more than his abrupt withdrawal of US forces from the region in the weeks prior.

In his reasoning, the president publicly acknowledged that the primary purpose of deploying additional troops was to protect the Syrian oil reserves — which compounds the already complicated problems in the region, according to White House advisers, lawmakers, and law professors.

Trump and his congressional allies in recent weeks have publicly announced their interest in securing the oil fields in Syria: "What I intend to do, perhaps, is make a deal with an ExxonMobil or one of our great companies to go in there and do it properly," Trump said on October 27, adding that he wanted to "spread out the wealth."

"The oil is so valuable for many reasons," Trump said.

Republican Sen. Lindsey Graham of South Carolina, an ardent Trump supporter who vehemently opposed the president's decision to withdraw US troops from Syria, told him that roughly three-quarters of the oil fields that were in US- and Kurdish-occupied territories could be compromised by the Iranians once US forces left the country, according to NBC News.

It's all about ISIS

Defense Department officials attempted to placate concerns over the US's seemingly newfound duties in Syria.

US Navy Rear Adm. William Byrne Jr., the Joint Staff vice director, pushed back against the notion that the military's increased presence in Syria was predicated on "securing the oil" and said the US's role was correlated with its longtime mission to defeat ISIS.

"I would be cautious with saying that 'the mission to secure the oil fields ... the mission is the defeat of ISIS," Byrne said to reporters on Thursday. "The securing of the oil fields is a subordinate task to that mission, and the purpose of that task is to deny ISIS the revenues from that oil infrastructure."

The Syrian Democratic Forces (SDF), the majority-Kurdish forces that led the ground assault against ISIS with US assistance, have operated the oil fields after seizing them from the terrorist group in 2017. Two years earlier, the oil fields were producing 45,000 barrels a day, or $1.5 million worth, the Pentagon said.

The SDF has been since been selling the crude oil to the Syrian regime through a sanctioned broker, according to a Wall Street Journal report citing sources familiar with the situation. The Pentagon spokesman Jonathan Hoffman said that by supporting the SDF's revenue stream, the US was continuing to wage war against ISIS and thereby finding the legal footing for the increased troop presence.

"The legal basis for this comes under the commander in chief's authority for us to be conducting counterterrorism efforts against [the Defeat-ISIS mission]," Hoffman said on Thursday. "And I get your point when you're trying to decouple the ISIS issue from the Syria issue, but it is not a decoupled issue. Our efforts in the area are focused on our ... mission, and we'll continue with that."

'A totally screwed-up state of affairs'

Joshua Geltzer, a former senior director for counterterrorism at the National Security Council and a visiting professor at Georgetown University Law Center, likened the reasoning to a public-relations dumpster fire.

"Being candid, it seems like a totally screwed-up state of affairs, in which the messaging on stuff like that is being driven not by any audience abroad," Geltzer said at Defense One's Outlook 2020 panel on Thursday.

"So the messaging has to tie that presence to the oil field because of what I gather is the president's own view of what's in US national-security interest there," Geltzer said. "That then runs headlong into the messaging problem that creates globally but also questions about law and propriety that, if it's sincere, it raises."

"From the outside, you have to look at it and say this is not a rational way to either formulate policy or to message policy," Geltzer added.

Critics have long tied the US's foreign policy in the Middle East to oil production. Following the US's military invasion of Iraq in 2003, the country's nationalistic "Arab oil for the Arabs" campaign was transformed and opened up to foreign oil firms, including BP, ExxonMobil, and Royal Dutch Shell.

With the help of foreign investment, Iraq's oil production, the second-largest in the Organization of the Petroleum Exporting Countries (OPEC), increased to about 4.88 million barrels per day in August, up from 2.5 million during the Iraq War.

'Toxic Middle Eastern conspiracy theories'

Foreign interests in Iraq's oil fields spurred the political divide of the Iraq War and have since been prominently featured in numerous movies, books, opinion columns, and documentaries. According to Democratic Sen. Chris Murphy of Connecticut, the continued perception of the US's interest in oil exacerbates the political divide, and leads to serious consequences.

"Telegraphing to the world that your only interest in the Middle East is protecting oil is bulletin-board recruiting material for the groups that we are trying to hurt, that we are trying to counteract," Murphy said at Defense One's panel.

Murphy also echoed the confusion brought by Trump's mission to protect Syria's oil fields, which some military officials said were left open to interpretation, according to CNN. Some military commanders deployed to Eastern Syria were still waiting to receive their directives to guard oil fields in the region, according to CNN, and lacked guidance for the basic rules of engagement.

"No one has defined what the mission is for us yet, and I've had administration officials inside our office and to the committee and no one seems to be able to present us with the task that they've been given," Murphy said. "I literally think they're making it up as they go along."

In an October internal memo from the special envoy for the anti-ISIS campaign in Syria, US Ambassador Bill Roebuck said the president's decision to commit more troops to protect the oil fields was "a good one" but added it may "play into toxic Middle Eastern conspiracy theories."

"I do not say there were easy choices here in Syria and that we failed to make them because of ignorance or bad intentions or lack of resolve," Roebuck wrote in the memo obtained by The New York Times. "US policy makers, coalition diplomats and their leaders, have done their best to contain the maelstrom that Syria has become."

SEE ALSO: Here's what we know about Delta Force, the super secretive troops who went after ISIS leader Abu Bakr al-Baghdadi

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A former WeWork employee is suing over Adam Neumann's $1.7 billion golden parachute

Sat, 11/09/2019 - 12:57pm

  • A former employee is taking WeWork to court over cofounder Adam Neumann's reported $1.7 billion golden parachute.
  • Natalie Sojka's lawsuit accuses Neumann and other WeWork directors of benefiting themselves at the expense of minority shareholders as their actions have "eviscerated" the value of WeWork stock and stock options.
  • "It is beyond comprehension why Neumann would be paid $185 million to provide strategic guidance to the company when his 'guidance' resulted in the virtual destruction of the company," the lawsuit alleges, referring to the consultancy fees that are reportedly part of Neumann's leaving package.
  • Read more of Business Insider's WeWork coverage here.

A former employee is taking WeWork to court over cofounder Adam Neumann's reported $1.7 billion golden parachute.

Natalie Sojka's lawsuit accuses Neumann and other WeWork directors of benefiting themselves at the expense of minority shareholders, breaching their fiduciary duty, creating corporate waste, unjustly enriching themselves, abusing control, among other failures. The suit, filed in San Francisco Superior Court this week, also names SoftBank CEO Masayoshi Son as a defendant.

As part of SoftBank's takeover of the coworking startup following its scrapped public listing, Neumann is set to receive nearly $1 billion for his WeWork shares, $500 million in credit to pay off personal loans, and $185 million in consulting fees, according to the Wall Street Journal.

"Despite breaching his fiduciary duties by engaging in self-dealing and mismanaging WeWork so badly that its IPO had to be withdrawn, Neumann is being offered a staggering $185 million consulting fee despite the fact that SoftBank seems to concede Neumann ruined the Company," the lawsuit alleges. 

"It is beyond comprehension why Neumann would be paid $185 million to provide strategic guidance to the Company when his 'guidance' resulted in the virtual destruction of the company," the lawsuit claims. "The fee simply represents self-dealing and improper personal payment to Neumann," it alleges.

WeWork, SoftBank, and the law firm representing Natalie Sojka didn't immediately respond to requests for comment.

"WeWork believes this lawsuit is meritless," a spokeswoman told Reuters on Friday.

Sojka worked as an executive assistant then a team lead at WeWork over a 17-month period, according to her LinkedIn profile. She received stock and stock options during her time there, and when she voluntarily resigned she exercised the options to buy more stock after being told she would lose them otherwise, according to the lawsuit.

Neumann's reported leaving package is "substantially unfair" and would cause "significant damage" to minority shareholders as the value of their stock and stock options has been "eviscerated due to Neumann's wrongdoing," the lawsuit claims.

Sojka is seeking an injunction to prevent Neumann's departure deal from going through, and proposed a class-action lawsuit on behalf of her and other minority shareholders.

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The Payment Industry Ecosystem: The trend towards digital payments and key players moving markets

Sat, 11/09/2019 - 12:14pm

This is a preview of a research report from Business Insider Intelligence. Current subscribers can read the report here.

The digitization of daily life is making phones and connected devices the preferred payment tools for consumers — preferences that are causing digital payment volume to blossom worldwide.

As noncash payment volume accelerates, the power dynamics of the payments industry are shifting further in favor of digital and omnichannel providers, attracting a wide swath of providers to the space and forcing firms to diversify, collaborate, or consolidate in order to capitalize on a growing revenue opportunity.

More and more, consumers want fast and simple payments — that's opening up opportunities for providers. Rising e- and m-commerce, surges in mobile P2P, and increasing willingness among customers in developed countries to try new transaction channels, like mobile in-store payments, voice and chatbot payments, or connected device payments are all increasing transaction touchpoints for providers.

This growing access is helping payments become seamless, in turn allowing firms to boost adoption, build and strengthen relationships, offer more services, and increase usage.

But payment ubiquity and invisibility also comes with challenges. Gains in volume come with increases in per-transaction fee payouts, which is pushing consumer and merchant clients alike to seek out inexpensive solutions — a shift that limits revenue that providers use to fund critical programs and squeezes margins.

Regulatory changes and geopolitical tensions are forcing players to reevaluate their approach to scale. And fraudsters are more aggressively exploiting vulnerabilities, making data breaches feel almost inevitable and pushing providers to improve their defenses and crisis response capabilities alike.

In the latest annual edition of The Payments Ecosystem Report, Business Insider Intelligence unpacks the current digital payments ecosystem, and explores how changes will impact the industry in both the short- and long-term. The report begins by tracing the path of an in-store card payment from processing to settlement to clarify the role of key stakeholders and assess how the landscape has shifted.

It also uses forecasts, case studies, and product developments from the past year to explain how digital transformation is impacting major industry segments and evaluate the pace of change. Finally, it highlights five trends that should shape payments in the year ahead, looking at how regulatory shifts, emerging technologies, and competition could impact the payments ecosystem.

Here are some key takeaways from the report:

  • Behind the scenes, payment processes and stakeholders remain similar. But providers are forced to make payments as frictionless as possible as online shopping surges: E-commerce is poised to exceed $1 trillion — nearly a fifth of total US retail — by 2023.
  • The channels and front-end methods that consumers use to make payments are evolving. Mobile in-store payments are huge in developing markets, but approaching an inflection point in developed regions where adoption has been laggy. And the ubiquity of mobile P2P services like Venmo and Square Cash will propel digital P2P to $574 billion by 2023.
  • The competitive landscape will shift as companies pursue joint ventures to grow abroad in response to geopolitical tensions, or consolidate to achieve rapid scale amid digitization.
  • Fees, bans, steering, or regulation could impact the way consumers pay, pushing them toward emerging methods that bypass card rails, and limit key revenue sources that providers use to fund rewards and marketing initiatives.
  • Tokenization will continue to mainstream as a key way providers are preventing and responding to the omnipresent data breach threat.

The companies mentioned in the report are: CCEL, Adyen, Affirm, Afterpay, Amazon, American Express, Ant Financial, Apple, AribaPay, Authorize.Net, Bank of America, Barclays, Beem It, Billtrust, Braintree, Capital One, Cardtronics, Chase Paymentech, Citi, Discover, First Data, Flywire, Fraedom, Gemalto, GM, Google, Green Dot, Huifu, Hyundai, Ingenico, Jaguar, JPMorgan Chase, Klarna, Kroger, LianLian, Lydia, Macy’s, Mastercard, MICROS, MoneyGram, Monzo, NCR, Netflix, P97, PayPal, Paytm, Poynt, QuickBooks, Sainsbury’s, Samsung, Santander, Shell, Square, Starbucks, Stripe, Synchrony Financial, Target, TransferWise, TSYS, UnionPay, Venmo, Verifone, Visa, Vocalink, Walmart, WeChat/Tencent, Weebly, Wells Fargo, Western Union, Worldpay, WorldRemit, Xevo, Zelle, Zesty, and ZipRecruiter, among others

In full, the report:

  • Explains the factors contributing to a swell in global noncash payments
  • Examines shifts in the roles of major industry stakeholders, including issuers, card networks, acquirer-processors, POS terminal vendors, and gateways
  • Presents forecasts and highlights major trends and industry events driving digital payments growth
  • Identifies five trends that will shape the payments ecosystem in the year ahead

SEE ALSO: These are the four transformations payments providers must undergo to survive digitization

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Bill Gates says that savvy strategic partnerships drove Microsoft's early success — here's what you can learn from it

Sat, 11/09/2019 - 12:00pm

  • Bill Gates, co-founder of Microsoft and noted philanthropist, talked about how he successfully led Microsoft's growth on an episode of the podcast "Masters of Scale with Reid Hoffman."
  • Part of Microsoft's success was its strategic partnership with IBM in its early days.
  • Gates advises leaders to pick partners "that are highly visible and tough." 
  • Click here for more BI Prime stories.

One of the earliest high-impact decisions Bill Gates made was figuring out how to work with IBM.

It was 1980 and IBM wanted Microsoft to quickly provide the operating system for the 16-bit IBM PC, what would become, in Gates's estimation, a model for personal computing.

Even though the project was viewed as an experiment, Gates jumped at the opportunity. 

"We put so much energy into this thing," he said on the podcast "Masters of Scale," hosted by LinkedIn founder, venture capitalist, and startup philosopher Reid Hoffman.

Capitalizing on partnership

Gates was able to move Microsoft into the next generation of personal computing because of that strategic partnership with IBM — Big Blue, an enterprise tech firm before anyone really knew to call it as such. But with the partnership,  Microsoft now had an operating system that they were able to market as a separate product.

They had leverage in the dawn of home computing, one that extended beyond the machine and into the software itself that IBM's competitors were eager to buy. One recent computing historian referred to the partnership, which was formalized nearly 39 years ago to the day, as the date "IBM Signs A Deal With The Devil."

That devil, of course, was the soon-to-be-gigantic Microsoft. 

Learning from one partner in particular: IBM Japan

Beyond being positioned for the latest turn in the industry, Microsoft as a company learned from IBM's strengths in sales and quality products.

IBM Japan in particular was picky about quality, Gates said. It was difficult at first to get acclimated to their standard, but Gates eventually realized that they weren't crazy, they were just disciplined— and he himself would have to learn how to do that.

"We spent two years just in total pain, where the Japanese guys were flying in, and they would sit there day and night even though they didn't even know how to fix the thing," Gates said.

Gates's first victories began in Japan, the Wall Street Journal reported in 1986, snowballing into the larger international success of Microsoft's products. 

Gates's experience with IBM Japan led to the advice he told Hoffman that applies anyone who wants to scale their company fast: Pick the toughest customers and meet their needs. 

Tough doesn't equal dislike, or hard to work with. It means selecting customers with high standards, who, in turn, elevate the standards of your company. You have to pick customers that are both highly visible and tough, says Gates. And he thinks this is critical to growth. 

"Partnerships really are so understated in terms of their key role," he said.

Take care of partners and they'll take care of you 

In the case of IBM, there were years in which Steve Ballmer would take the red-eye down to IBM's former campus in Boca Raton, Florida, spend a day there, and then fly back. Gates describes this as "the right thing to do to get things done." Ballmer's frequent flights helped the partnership between Microsoft and IBM thrive, uniquely positioning Microsoft to grow in the following decades. 

More recently, Nadella has announced strategic partnerships with companies, like Novartis, Accenture, and Avanade, to build new technology.

Microsoft's history illustrates the importance of acting on changes within an industry, with the right partners, for massive scale.

SEE ALSO: How Satya Nadella's leadership style catapulted Microsoft to a trillion-dollar valuation — and what you can learn from it

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The Amex Green card earns valuable bonus points on travel and dining, but it faces stiff competition from Chase's Sapphire cards

Sat, 11/09/2019 - 11:58am

  • The American Express® Green Card was recently re-launched with a bunch of new benefits, including 3x bonus points on travel purchases and spending at restaurants worldwide.
  • It's a much improved card for earning valuable Amex points, but it faces some strong competition from cards like the Chase Sapphire Reserve and the Chase Sapphire Preferred Card.
  • If you spend a lot on travel and dining out, the Amex Green could be a good choice for you — and it has a more moderate annual fee than some other top rewards cards.
  • However, make sure to take a close look at its statement credits and travel coverage benefits — in some cases, other cards offer superior coverage and easier-to-use perks.
  • Read more personal finance coverage.

American Express just relaunched its Green from Amex card with a whole new set of benefits, taking it from a pretty lackluster product to a solid option for earning Membership Rewards points. Now that the breathless hot takes have died down, it's time to take a deep dive.

Is this card for you? The answer is very much "it depends." If you frequently spend money on travel and dining out, you'll find value in the card — but may also find more value with other options. Let's dive in and examine the benefits. We'll also compare this card to two of its closest competitors: the Chase Sapphire Preferred and Chase Sapphire Reserve.

Keep in mind that we're focusing on the rewards and perks that make these credit cards great options, not things like interest rates and late fees, which will far outweigh the value of any points or miles. It's important to practice financial discipline when using credit cards by paying your balances in full each month, making payments on time, and only spending what you can afford to pay back. 

American Express Green Card details

Annual fee: $150

Welcome bonus: 30,000 points after you spend $2,000 in the first three months. Plus, if you apply by January 15, 2020, you can get up to $100 in statement credits toward any eligible purchase made with Away luggage in the first three months.

Points earning: 3x points on all eligible travel, 3x points at restaurants worldwide, 1 point per dollar on everything else

Foreign transaction fee: None

Welcome bonus

The Amex Green card has a public welcome bonus of 30,000 Membership Rewards points after you spend $2,000 within the first three months from opening the account.

As far as credit card welcome bonuses go, this one is a bit on the low side. For example, the Chase Sapphire Preferred has a welcome bonus of 60,000 Ultimate Rewards points after you spend $4,000 in the first three months, and the Chase Sapphire Reserve has a welcome bonus of 50,000 Ultimate Rewards points (with the same minimum spending requirement of $4,000 in the first three months).

Amex states in the terms and conditions that it reserves the right to withdraw the welcome bonus if you cancel or downgrade the account within the first 12 months — meaning that you effectively need to pay the annual fee in the second year in order to guarantee keeping your bonus.

Points earning on the Amex Green card

Solidly aimed at the Chase Sapphire Reserve, which is loved by many award travelers for offering 3x points on dining and travel, the Amex Green provides 3 Membership Rewards points per dollar spent on travel and at restaurants worldwide, and 1 Membership Rewards point per dollar on all other purchases. 

You can transfer Membership Rewards points to a wide array of airline partners — from British Airways to Hawaiian Airlines to Virgin Atlantic — and three hotel partners (Choice Privileges, Hilton, and Marriott) to book travel. You can also use points to book travel directly through American Express.

Annual credits that offset the Amex Green card's annual fee

The Amex Green card has a $150 annual fee, compared to a $450 annual fee on the Chase Sapphire Reserve and a $95 annual fee for the Chase Sapphire Preferred.

While paying a large annual fee can sting, the Amex Green card does offer some annual statement credits that can offset the cost. Here are the details on those credits, and a comparison with other cards' annual credits and how they reduce their annual fees.

Amex Green card
  • Up to $100 in credit toward eligible purchases at the luggage retailer Away —This is a one-time benefit, so it only applies for the first year of card membership. You have to apply by January 15, 2020, to be eligible for this statement credit.
  • Up to $100 in credit toward CLEAR membership each year — CLEAR is an expedited security program similar to TSA PreCheck, and you can use it at more than 30 US airports as well as select sports and concert venues. An annual CLEAR membership costs $179, so you'll pay $79 out of pocket with the annual statement credit factored in.
  • Up to $100 credit towards LoungeBuddy purchased airport lounge access each year — Access to lounges through LoungeBuddy ranges from $25 to $50, so you can get at least two visits per year through this credit.

In theory, if you use all of the credits on the Amex Green card, you'll get back double the annual fee in value. That being said, it's hard to spend exactly $100 with Away. CLEAR memberships aren't available for $100, so you'll be out of pocket for anything over $100. And LoungeBuddy lounge access costs vary, so you may not be able to use the exact amount of the credit here either.

Chase Sapphire Preferred

This card doesn't offer any statement credits to offset the annual fee.

Chase Sapphire Reserve

The card offers up to $300 in offsetting credit for travel purchases — and any travel purchase counts, even including bus passes, parking, or tolls (along with more conventional travel purchase such as airlines and hotels). In addition, the Chase Sapphire Reserve provides up to a $100 fee credit once every five years toward Global Entry or TSA PreCheck membership. This makes the effective annual fee for the Chase Sapphire Reserve just $150.

American Express® Gold Card

The Amex Gold card isn't necessarily an obvious card to compare to the Amex Green card, because its benefits and bonus categories are squarely focused on dining. The Gold card has a $250 annual fee, and it earns 4x points at restaurants worldwide (as well as 4x on the first $25,000 spent at US supermarkets each year; then 1x). However, it's worth mentioning here due to its annual statement credits.

  • Up to $100 in credit toward airline incidental fees each year — This applies when you use your card for checked baggage, airline lounge access, ticketing fees, inflight purchases, and other non-airfare, non-airline gift card purchases.
  • Up to $120 in credit toward qualifying dining purchases each year — This breaks down as up to $10 in statement credits each month, for purchases at Grubhub, Seamless, The Cheesecake Factory, Ruth's Chris Steak House, Boxed, and participating Shake Shack locations

If you take full advantage of the Amex Gold card's annual statement credits, you'll get $220 in value each year, reducing the effective annual fee to just $30.

How the Amex Green compares to other cards

Two of the most obvious competitors to the Amex Green are the Chase Sapphire Reserve and Sapphire Preferred, due to the fact that they all earn bonus points on dining and travel. 

While the cards have different annual fees, none of them charge foreign transaction fees. This is a change since the relaunch of the Amex Green card, which previously charged foreign transaction fees.

Points earning and redeeming

The Chase Sapphire Reserve offers seemingly identical earning rates to the Amex Green: 3 Ultimate Rewards points per dollar spent on travel and dining and 1x Membership Rewards points on all other purchases.

Chase is known for having the broadest, most generous definition of what counts as "travel" for the purposes of earning bonus points and for redeeming the Sapphire Reserve's annual travel credit. However, the Amex Green offers 3x points on many of the more "niche" travel purchases that the Chase also codes as travel, including parking, bus passes, and highway tolls. So if you make lots of travel purchases, you shouldn't have trouble racking up rewards quickly with the Amex Green, the Sapphire Reserve, or the Sapphire Preferred.

With the Chase Sapphire Reserve, you can spend Ultimate Rewards points at a rate of 1.5 cents apiece toward essentially anything Expedia sells when you book through Chase Travel. You can also transfer Chase points to airline and hotel partners, although there are fewer airline partners in Chase's program than in the Amex Membership Rewards program.

The Chase Sapphire Preferred offers a lower Ultimate Rewards earning rate: 2x points on travel and dining and 1x on everything else. These points can be spent at 1.25 cents per point on the Expedia-powered Chase Travel portal and can also be transferred to partners.

Credit vs. charge cards

While nobody should carry a card balance, Chase gives you the option of doing so. The Amex Green card does not; you must pay off the card in full every month.

I have a $60,000 credit limit across my Chase cards (and have never cracked using even 10% of it). There is no preset spending limit with Amex (though Amex does have internal spending limits).

Travel coverage 

Chase provides richer travel-related coverage benefits for both the Chase Sapphire Preferred and Chase Sapphire Reserve than Amex provides for the Green from Amex.

For example, Chase provides primary rental car coverage on both cards, which means its insurance kicks in before your own personal coverage in the case of a rental car getting lost or damaged (and you can decline car rental insurance).

Amex provides only secondary car rental coverage, and it's more limited than Visa provides. With the Sapphire Reserve, Chase provides roadside assistance with a $50 credit per incident. Amex provides roadside dispatch, which means it will call a tow truck for you and you will pay for all the services. Other benefits stack up similarly; the recurring theme is that Chase covers more, and pays for more.

Lounge Access

For the frequent traveler, Chase provides a Priority Pass Select membership with the Chase Sapphire Reserve (and, well, nothing for the Sapphire Preferred). This allows unlimited entries to Priority Pass lounges along with unlimited visits to Priority Pass restaurants, with up to two guests allowed per visit.

Amex provides up to a $100 LoungeBuddy credit each year. This is an interesting innovation because LoungeBuddy has contracts with many lounges that don't participate in Priority Pass. Given the crowding problem at many Priority Pass lounges, and the fact that some airports lack Priority Pass coverage, some people may prefer the LoungeBuddy option, especially infrequent travelers who can't justify the Chase Sapphire Reserve's high annual fee.

Bottom line

Should you pick up the Amex Green card? If you're a frequent traveler, it's worth a look thanks to the bonus points you'll earn and the CLEAR and LoungeBuddy benefits. I'm considering apply for this card because Membership Rewards points are valuable, and I like to diversify my points earnings. I'm not giving up my Chase cards, though, and will continue to use these extensively.

Click here to learn more about the Amex Green card.

Join the conversation about this story »

NOW WATCH: Behind the scenes with Shepard Smith — the Fox News star who just announced his resignation from the network

An anonymous memo at Facebook, a shakeup at WPP, and Robinhood's 'infinite money' glitch

Sat, 11/09/2019 - 11:34am

Hello!

We published a bunch of great stories on Facebook, Tesla, WeWork, Walmart's Jet, SoftBank-backed startup Fair, and buzzy AI startup UiPath this week, so I want to jump right to it:

An anonymous memo alleging ongoing racism at Facebook is circulating inside the company

Employees have been sharing and discussing an anonymously authored blog post that asserts racism at the company has gotten worse over the last year, and quotes what it says are 12 current and former employees about their experiences, Rob Price reported.

Tesla is starting to ditch Salesforce and replace it with its own software for company salespeople

Tesla is starting to abandon Salesforce for a proprietary customer-relationship-management (CRM) system, three Tesla salespeople told Mark Matousek.

WeWork's coding boot camp Flatiron School has laid off dozens of employees

WeWork's coding boot camp, Flatiron School, laid off dozens of employees on Thursday as the coworking giant continued to slash costs after its failed initial public offering, Becky Peterson and Meghan Morris reported. Separately, Meghan and Julie Bort reported that insiders say WeWork's IT is a patchwork of cheap devices and Band-Aid fixes that will take millions to fix

Top leaders are leaving Walmart's Jet, and some employees are growing concerned about the site's future

Jet, the Walmart-owned e-commerce site, is facing a stream of departures from top leaders, fueling concerns among some employees about the company's future, according to Hayley Peterson.

SoftBank-backed startup Fair burned through nearly $400 million in 10 months. Insiders reveal how Softbank stepped in and cleaned house in the wake of WeWork.

A dozen current and former employees told Meghan Morris that Fair's unconstrained growth was its undoing. It hired people it didn't have jobs for and bought millions of dollars in inventory it lost track of as it burned through funding, they said.

Hot AI startup UiPath's job cuts were triggered after it burned cash faster than expected and missed its revenue target, according to an internal document

UiPath was burning cash faster than expected and its revenue growth, although robust, was below its internal targets when the company launched a plan — dubbed Project Dawn — to slash hundreds of jobs and dramatically reduce costs, according to a presentation reviewed by Ben Pimentel. 

WPP's shakeup

Mark Read, the CEO of WPP, the world's biggest ad holding company, is shaking things up as he looks to get the company back to growth. This week:

The changes come as WPP looks to tackle headwinds caused by client budget cuts and a large-scale shift away from traditional advertising channels.

In conversation Finance and Investing

We got a leaked copy of the memo Robinhood sent to barred users who exploited its now infamous 'infinite money' glitch

Robinhood restricted the accounts of users exploiting an "infinite leverage" glitch, and a leaked letter sent to one terminated trader revealed how the company announced account terminations.

Here's the pitch deck that fintech dv01 used to nab $15 million from the likes of George Soros and Pivot Investment Partners. The startup's founder called it the easiest round he's ever raised.

Fintechs have had a relatively easy time raising money thanks to a slew of eager investors with cash to spend. But the most recent round raised by Perry Rahbar for his fintech dv01 might take the cake. 

Tech, Media, Telecoms

Amazon has a big leadership hole to fill with the departure of advertising exec Seth Dallaire. Here are five insiders that ad execs say are his likely successor.

When Dallaire recently left Amazon to be CRO of Instacart, Amazon lost a big name behind its growing but still nascent advertising business.

How Outbrain established 'around the web' content recommendations, only to lose its lead to Taboola and end up getting eaten by its rival

In October, the two dominant content recommendation companies Outbrain and Taboola announced plans to merge to create a $2 billion company

Healthcare, Retail, Transportation

Companies like Google and Microsoft are making big investments in startups looking to disrupt healthcare. Here's where 5 top tech giants are placing their bets.

Tech giants like Google's parent company Alphabet and Microsoft have taken their time figuring out how to approach the massive $3.5 trillion US healthcare industry. 

Meet the 7 remote-monitoring startups that are raising millions to provide a new way of caring for aging Americans at home

The US population is aging rapidly and startups are looking to create new ways of helping to care for the elderly.

Join the conversation about this story »

NOW WATCH: WeWork went from a $47 billion valuation to a failed IPO. Here's how the company makes money.

Billionaires in politics: The top 25 Americans who funded politics in 2018

Sat, 11/09/2019 - 10:59am

A small group of ultra-wealthy Americans pumps a lot of money into politics.

We took a look at the top 25 donors who funded American politics in 2018 and found that the list consists of, among others, an assortment of financiers, heirs, and entrepreneurs.

The contributions of some of the largest donors — such as Sheldon and Miriam Adelson, George Soros and Tom Steyer — are well known, while other donors, like Jeff Bezos, are better known for their careers.

Interestingly, one well-known political donors — Charles Koch — did not make the list. Koch and his now-deceased brother David donated $1,816,650 to Republicans through their company Koch industries in 2018, according to The Center for Responsive Politics. To make this list, their donations would have needed to top $6.5 million.

Business Insider previously reported that public affairs rank as the eighth-most popular cause that billionaires donate to. Only 12.4% of billionaires reported making donations to politics in 2018, according to Wealth-X's 2019 Billionaire Census.

Collectively, the 25 billionaires and billionaire couples on the list totaled a whopping $573,892,284 in political donations in 2018, data from The Center for Responsive Politics shows.

Keep reading to learn more about the country's biggest political donors, ranked in order of their donations during the 2018 election cycle by The Center for Responsive Politics. Each donor's net worth, where available, was sourced from Forbes unless otherwise specified. Their party affiliations are listed according to The Center for Responsive Politics.

SEE ALSO: Meet the 18 ultra-wealthy Americans begging for a wealth tax, from a Facebook cofounder to a Disney heiress

DON'T MISS: Less than 1% of the world's billionaires donate to housing and shelter charities. Here are the top 10 causes the world's richest people give their money to.

25. Billionaire hedge-fund manager Paul Singer gave $6.4 million to Republicans, according to the Center for Responsive Politics.

Total donations: $6,463,400

Party: Republican

Net worth: $3.5 billion

Singer is the founder of investment firm Elliott Management, according to his biography on the firm's website, but he is better known for his advocacy for conservative causes, Forbes reports. Once a major critic of President Trump, Singer has since met with him at the White House. Singer does break with the President on one important issue, however — Singer is also an advocate for LGBTQ+ rights.



24. Former Breitbart News investor Robert Mercer and his wife Diana have given $6,544,024 to conservatives.

Total donations: $6,544,024

Party: Republican

Net worth: Unknown

Robert Mercer, 73, is the former co-CEO of Renaissance Technologies, a hedge fund valued at $50 million in 2017, according to The New York Times. Mercer left the hedge fund in 2017 after clients, including the retirement fund for Baltimore's police and firefighters, withdrew their investments from Renaissance over concern about Mercer's political donations and involvement with Breitbart, The Times reported.

The $6.5 million that Robert and his wife Diana donated to Republicans in 2018 was the smallest figure they've given in any election cycle since 2012, CNBC reported. The couple, once among President Trump's biggest supporters, have become fatigued by the resulting media attention, sources told CNBC.



23. CEO of Arkansas-based chicken producer Mountaire Corp, Ronald Cameron, and his wife Nina donated nearly $6.6 million to Republicans.

Total donations: $6,574,352

Party: Republican

Net worth: Unknown

Ronald Cameron is the CEO of the poultry company founded by his grandfather, according to the North Caroline Poultry Foundation. Mountaire Corp is the seventh-largest producer of chicken in the country, the foundation reports. An alum of the University of Arkansas, Ronald and his wife Nina have four children and nine grandchildren, according to the foundation's website.

The Camerons were responsible for 80% of total donations to Mike Huckabee's 2016 presidential run, ABC News reported.



22. Indiana real-estate developer Paul Skjodt and philanthropist Cynthia Simon-Skjodt gave $6.8 million to Democrats through their foundation.

Total donations: $6,750,150

Party: Democrat

Net worth: Unknown

Cindy Simon-Skjodt serves as the chair of the couple's non-profit, the Samerian Foundation, according to its website. The foundation provides grants for education, economic development, and youth sports initiatives, according to its website. Paul Skjodt is a former professional hockey player and real estate developer, according to his biography on the foundation's website.

The Skjodts donated $20 million to create a genocide prevention center at the United States Holocaust Memorial Museum in Washington, D.C. in 2015, according to The Indianapolis Business Journal.



21. Jeffrey and Janine Yass donated $7.3 million to conservatives.

Total donations: $7,611,083 ($7,295,833 to conservatives, $250 to liberals)

Party: Republican

Net worth: Unknown

Jeffrey Yass is a cofounder of trading firm Susquehanna International Group, according to the company's website.

The couple also donated $250 to liberals in addition to their support of conservatives, according to the Center for Responsive Politics



20. Investor Joshua Bekenstein and philanthropist Anita Bekenstein gave $7.7 million to Democrats.

Total Donations: $7,713,540

Party: Democrat

Net worth: Unknown

Joshua Bekenstein is the co-chairman of Bain Capital, the private equity firm cofounded by Mitt Romney, according to Fortune

Anita, Joshua's wife, is a philanthropist who manages the couple's private fund, which supports health, education, arts, and environmental non-profits, in addition to serving on the board of patient advocacy non-profit Upstream USA, according to her biography on the organization's website.

The couple lives in Boston and has five children, according to Anita's biography on the organization's website.



19. Facebook cofounder Dustin Moskovitz and his wife, former Wall Street Journal reporter Cari Tuna, donated $7.7 million to Democrats.

Total donations: $7,720,230

Party Affiliation: Democrat

Net worth: $11.8 billion

After leaving Facebook in 2008, Dustin Moskovitz founded workflow management platform Asana, according to Forbes.

Alongside his wife Cari Tuna, Moskovitz has donated millions to health and LGBTQ+ organizations through their foundation Good Ventures, Forbes reports.

Moskovitz maintains a 3% stake in Facebook, according to Forbes



18. Home Depot cofounder Bernard Marcus and his wife, Billi Wilma, gave nearly $8 million to Republicans.

Total donations: $8,000,018 ($7,980,318 to conservatives, $500 to liberals)

Party Affiliation: Republican

Net worth: $6.5 billion

Bernie Marcus cofounded Home Depot in 1978 with Arthur Blank after they were fired from their jobs at another hardware store, according to Forbes. Marcus was the company's first CEO and retired in 2002.

Marcus was a major contributor to President Trump's 2016 presidential bid and will support the President again in 2020, Business Insider previously reported. 

Read more: The billionaire cofounder of Home Depot plans on donating up to 90% of his $5.9 billion fortune, and Trump's 2020 campaign will be one of the beneficiaries



17. Charles Schwab, the founder of the eponymous brokerage firm, and his wife Helen gave $8,531,440 to Republicans.

Total donations: $8,531,440

Party Affiliation: Republican

Net worth: $8.2 billion

Charles Schwab, 81, founded his brokerage firm in 1971 and served as its CEO until 2008, according to Forbes. Schwab's fortune comes from his 11% stake in the firm. 

Helen is a philanthropist and serves as the president of the board of the Charles and Helen Schwab Foundation, according to the organization's website.

The couple resides in Woodside, California and has 5 children, according to Forbes.



16. LinkedIn cofounder Reid Hoffman donated $9,315,826, mostly to Democrats.

Total donations: $9,315,826 ($433,500 to conservatives, $8,317,326 to liberals)

Party Affiliation: Democrat

Net worth: $1.9 billion

Reid Hoffman was an early employee of PayPal and one of the first investors in Facebook, according to Forbes. Hoffman founded Linkedin in 2003. Hoffman sold LinkedIn for $26.2 billion to Microsoft in 2016 and now sits on Microsoft's board, according to Forbes.

Hoffman gave $8,317,326 to Democrats and $433,500 to Republicans in 2018, according to the Center for Responsive Politics



15. Investor George Marcus and his wife Judith gave $9,610,125, mostly to Democrats.

Total donations: $9,610,125 ($10,400 to conservatives, $9,579,725 to liberals)

Party Affiliation: Democrat

Net worth: $1.5 billion

George Marcus is the founder of real-estate brokerage Marcus & Millichap Company, according to the company's website. Marcus is also the chairman of Essex Property Trust, a multi-family real-estate investment trust, and he serves on the board of California-based commercial bank Greater Bay Bancorp.

The Marcuses gave $10,400 to Republicans in 2018, according to the Center for Responsive Politics. The rest went to Democrats.



14. Heiress Deborah Simon donated $9.7 million to Democrats.

Total donations: $9,744,070

Party Affiliation: Democrat

Net worth: Unknown

Deborah Simon is the daughter of Indiana shopping mall developer Melvin Simon. Simon inherited a portion of her father's fortune after a bitter legal battle over his estate with her stepmother Bren Simon, according to Forbes

Simon's family had a net worth of $6.8 billion in 2014, according to Forbes.



13. Investor Timothy Mellon gave $10 million, mostly to Republicans.

Total donations: $10,061,000 ($10,058,300 to conservatives, $2,700 to liberals)

Party Affiliation: Republican

Net worth: $1 billion 

Timothy Mellon, the grandson of twentieth-century business magnate Andrew Mellon, funded the founding of New Hampshire-based railroad company, Guilford Transportation Industries, according to Forbes.

While most of Mellon's donations were to conservatives, Mellon also gave $2,700 to Rep. Alexandria Ocasio-Cortez, according to The Guardian.



12. Jeff and MacKenzie Bezos donated $10,186,170 in total to candidates of both parties.

Total donations: $10,186,170

Party Affiliation: Non-partisan, lean conservative

Net worth: $107.4 billion, $33.9 billion

Amazon CEO Jeff Bezos and novelist MacKenzie Bezos made 60% of their donations to Republicans and 40% of their donations to Democrats, according to The Center for Responsive Politics

The pair finalized their divorce in July 2019, Business Insider previously reported.

Read more: 25 years after Amazon's launch, Jeff Bezos is the richest person alive. Here's how he makes and spends his billions.



11. California-based psychiatrist Karla Jurvetson donated $12 million to Democrats.

Total donations: $12,431,198 ($5,400 to conservatives, $12,415,726 to liberals)

Party Affiliation: Democrat

Net worth: Unknown

Karla Jurvetson is the ex-wife of venture capitalist Steve Jurvetson, according to The Guardian. Her largest donation, $5.4 million, was to a Super PAC aimed at elected pro-choice female candidates run by Emily's List, The Guardian reported.



10. Chicago-based newspaper publisher Fred Eychaner gave $12,665,400 to Democrats.

Total donations: $12,665,400

Party Affiliation: Democrat

Net worth: $500 million in 2005

Fred Eychaner is the chairman of Newsweb Corp. Eychaner became wealthy after selling a television station to Rupert Murdoch's NewsCorp for $425 million in 2002, according to Crain's Chicago Business.

Eychaner is also a major supporter of Hillary Clinton. He financially backed her 2008 and 2016 presidential bids, according to Crain's Chicago Business.



9. Blackstone Group CEO Stephen Schwarzman and his wife Christine gave $12,882,200 to Republicans.

Total donations: $12,882,200

Party Affiliation: Republican

Net worth: $16.7 billion

Stephen Schwarzman, 72, cofounded the private equity firm in 1985, according to Forbes



8. Hedge-fund manager Kenneth Griffin donated $19,225,125 to Republicans.

Total donations: $19,225,125

Party Affiliation: Republican

Net worth: $12.7 billion

Ken Griffin is the founder and CEO of Chicago-based hedge fund Citadel, according to The Guardian. Citadel manages $32 billion in assets, according to Forbes.

Griffin also owns the most expensive apartment ever sold in New York City, Business Insider previously reported.

Read more: Hedge-fund manager Ken Griffin's $238 million NYC apartment shattered the US real estate record — here's a look at his record-setting properties and penthouses



7. Billionaire financier George Soros donated over $20 million to Democrats.

Total donations: $20,135,586

Party Affiliation: Democrat

Net worth: $8.3 billion

Soros built his fortune leading Quantum Fund, once the world's largest hedge fund. Since retiring from money managing in 2011, Soros has turned his attention to philanthropy. He started donating to campaigns in 2003 because of his dissatisfaction with the war in Iraq, Business Insider previously reported. 

Soros has also found himself at the center of numerous conspiracy theories about his involvement in governments from the United States to Hungary to Russia, many of which are anti-Semitic and have never been supported by evidence.

Read more: What George Soros' life is really like: How the former hedge-fund manager built his $8.3 billion fortune, purchased a sprawling network of New York homes, and became the topic of international conspiracy theories



6. James and Marilyn Simons gave $22 million to Democrats.

Total donations: $22,165,010

Party Affiliation: Democrat

Net worth: $21.6 billion

James Simons, the founder of quantitative hedge fund Renaissance Technologies, was named the highest-paid hedge fund manager of 2019 by Forbes. James and his wife, economist and philanthropist Marilyn Simons, are also major donors to Stony Brook University, where they met, according to Bloomberg.



5. Hedge-fund manager S. Donald Sussman donated over $27 million to Democrats in 2018.

Total donations: $27,545,500

Party Affiliation: Democrat

Net worth: Unknown

Donald Sussman is the founder of Paloma Partners. The Fort Lauderdale-based hedge fund was the top donor to Hillary Clinton's 2016 presidential campaign, giving $21.6 million, according to The Guardian



4. Uline CEO Richard Uihlein and his wife Elizabeth donated almost $40 million to Republicans.

Total donations: $39,854,296

Party Affiliation: Republican

Net worth: Between $700 million and $2 billion in 2014

Richard Uihlein is the founder of the Wisconsin-based shipping materials company Uline, according to Forbes.

"I'm a conservative Republican, and I'm trying to help people who believe as I do in limited government and free markets," Richard Uihlein said in 2013, according to Forbes. "I'm not one to hide from that."



3. Presidential candidate Tom Steyer and his wife Kathryn Taylor gave $73,819,973 to Democrats.

Total donations: $73,819,973

Party Affiliation: Democrat

Net worth: $1.6 billion 

Tom Steyer, 62, ran hedge fund Farallon Capital before becoming a full-time activist in 2012, according to Forbes

Read more: Billionaire activist Tom Steyer just jumped into the 2020 Democratic field after previously ruling out a presidential run



2. Former New York mayor Michael Bloomberg donated over $95 million, nearly all of it to Democrats.

Total donations: $95,098,168 ($5,400 to conservative, $94,837,766 to liberals)

Party Affiliation: Democrat

Net worth: $52.4 billion

Michael Bloomberg, 77, is the founder and CEO of financial media company Bloomberg LP.

Bloomberg will spend $500 million on the 2020 election in hopes of defeating Trump, Politico reported in February. On November 7, The New York Times reported that he was actively preparing to enter the Democratic primary.



1. Sheldon and Miriam Adelson gave $123,244,400 to Republicans.

Total donations: $123,244,400

Party Affiliation: Republican

Net worth: $33.6 billion

Sheldon Adelson, 86, is the CEO of the Las Vegas Sands casino company, according to Forbes. Adelson is also an avid Trump supporter. Adelson was the largest donor to both Trump's 2016 presidential campaign and his inauguration fund, according to The Guardian.



4 reasons you may need disability insurance, even if you think you don't

Sat, 11/09/2019 - 10:40am

Despite popular belief, disability insurance is not just for on-the-job injuries.

The most common disability insurance claims after work-induced musculoskeletal disorders (think: carpal tunnel, tendinitis, and back pain) are for cancer, pregnancy, and mental-health issues like depression and anxiety.

Many of these things can happen at any time without warning and hinder you from performing your regular duties at work or showing up at all. And more often than not, Social Security disability won't cover your loss of income to the fullest.

Not everyone needs private disability insurance, but if you rely on a steady paycheck to pay your bills, stay out of debt, and save up for the future, you probably do, regardless of the industry or environment where you work.

Here's why you should consider buying disability insurance:

1. You're the breadwinner

If your career is your largest financial asset, you need disability insurance not only to protect against income loss for yourself, but for others who rely on you.

If you financially support a partner, kids, aging parents, or anyone else, disability insurance can help make sure they're taken care of if you're ever unable to work because of an injury or illness. When you apply for a policy, you choose exactly how much you want to receive each month as a benefit and how long you want it to last.

2. You're paying off debt

Millions of millennials and Gen Xers are buckling under debt, mostly from credit cards and student loans. If you're on the hook for big monthly payments, a sudden loss of income can affect your ability to make them in full and on-time.

Factoring how much you pay toward debt balances every month into your coverage amount will ensure you don't fall behind if you get injured or sick, even if it's temporary.

Policygenius can help compare disability insurance policies to find the right coverage for you, at the right price »

3. Your employer doesn't offer enough coverage, or any at all

Most traditional employers offer short-term disability insurance, but that usually only replaces up to 50% of your income for about three to six months, plus you'll have to pay taxes on the payments.

These policies are obviously contingent on your employment with the company. If your injury or illness leads to job loss, you're out of luck.

That's why experts at Policygenius recommend buying additional long-term disability insurance for the most "comprehensive and cost-effective" coverage. Long-term disability insurance can effectively pick up where short-term coverage or your emergency fund leave off, typically between 90 days and a year after the incident (this is known as the elimination or waiting period).

4. You work for yourself

Disability insurance is crucial for self-employed workers, freelance writer Jackie Lam wrote for Business Insider. An insurance benefit can help provide consistent income and help cover ongoing business expenses.

If you're self-employed and shopping for disability insurance, you'll have to provide tax returns from the past two years as proof of income, according to insurance-comparison site Policygenius. You may also consider paying a higher premium each month to shorten your elimination period, or the time you have to wait to receive insurance payments, since you don't have short-term coverage from an employer to tide you over.

Policygenius can help compare disability insurance policies to find the right coverage for you, at the right price »

Join the conversation about this story »

NOW WATCH: Behind the scenes with Shepard Smith — the Fox News star who just announced his resignation from the network

Meet the typical millennial millionaire in America, who has a real-estate portfolio worth $1.4 million, is married, and is more likely to live in California than any other state

Sat, 11/09/2019 - 10:24am

There are 618,000 millennial millionaires in America, and they're sitting on a nice pile of assets.

Think a net worth ranging from $1 to $2.49 million, three properties, and a BMW. That's according to a new report by Coldwell Banker

The Coldwell Banker Global Luxury program worked with wealth intelligence data and research firm WealthEngine to analyze the lifestyles of millennial millionaires, from wealth creation and property investments to spending trends. It defined millennial millionaires as those ages 23 to 37 with a net worth of more than $1 million.

The report found that the average millennial millionaire is married, lives in California, and is on the hunt for real estate that is affordable and within walking distance of the center of action.

Meet the typical American millennial millionaire, according to highlights from the report.

SEE ALSO: Meet the average American millennial, who has an $8,000 net worth, is delaying life milestones because of student loan debt, and still relies on their parents for money

DON'T MISS: The top 10 ZIP codes where America's wealthiest millennials live, ranked

The typical millennial millionaire is between the ages of 34 to 37 and has a net worth between $1 and $2.49 million.

Millennial millionaires differ from the millionaires of the early 1980s (the time of America's last millionaire boom) in that they're set to inherit even more wealth from their baby boomer parents, who are considered history's wealthiest generation, according to the report.

It's estimated that $68 trillion will be passed down from boomers within the next few decades during the "Great Wealth Transfer." By 2030, millennials will hold five times as much wealth as they do today.

"While the inheritance component is hard to quantify with the current data available, there are still many millennials who are not considered wealthy today, but will be in the future," the report states.



Millennial millionaires in the US own an average of three properties. Their average real-estate portfolio is worth $1.4 million.

"Given their age and real-estate portfolio value, plus the fact that many of them own businesses and stand to inherit a lot of wealth, millennial millionaires are poised to be one of the richest and most influential generations in history," reads the report.

Additionally, many millennial millionaires see investing in real-estate as the key to wealth building.

According to Dana Bull, a real-estate investor, the financial advantages of investing in real estate are plentiful: positive cash flow, appreciation in terms of housing values, leverage, and tax advantages.

 



Most American millennial millionaires are homeowners, and most own a single-family home.

Ninety-two percent of millennial millionaires in the US are homeowners, according to the report. And 77% of them said they're interested in home improvement.

Some real-estate agents in luxury markets find that millennial millionaires aren't into fixer-uppers, according to the report. But Jade Mills, a Coldwell Banker Global Luxury Ambassador and Beverly Hills real-estate agent, said they're open to open to buying fixer-uppers in desirable areas if they can't afford new construction properties.



The most popular state for millennial millionaires is California: Eight of the top 10 ZIP codes they live in are concentrated in the Golden State.

According to the report, 44% of millennial millionaires live in the Golden State. Seven of the eight California ZIP codes are in Silicon Valley specifically, which highlights the relationship between tech and wealth.

New York, Florida, Massachusetts, and Texas are the states with the next-largest population of millennial millionaires.



When buying luxury real estate, most millennial millionaires focus on the walkability factor.

"They want to live near gathering spaces," Karen Yang of Coldwell Banker Residential Brokerage in Los Altos in California said in the report. "They want to live near throwback downtowns, or districts that grew organically — and they are willing to give up square footage and amenities to be able to live in those kinds of locations."

Business Insider previously spoke with several real-estate agents in three states that are popular among rich millennials — New York, California, and Florida. They, too, all told Business Insider that location and walkability are key factors among buyers.

In New York City, many want to be able to walk to work, Ian Slater of Compass told Business Insider. Millennials also want to walk to restaurants, recreational activities, and, in the case of Florida, the water, West Palm Beach real-estate agent Burt Minkoff of Douglas Elliman said. 



Most American millennial millionaires are married. Those who have kids typically have just one.

Millennials have delayed significant life milestones like marriage and children, but wealthier millennials are ahead of the curve when it comes to marriage: 67% are married, compared to only 40% of the general millennial population.

According to the report, all cohorts — millennials, millionaires, and millennial millionaires — who have children typically have just one.



Millennial millionaires have a wide range of interests, but they're overwhelmingly interested in health and fitness, and technology.

The report states that they prefer to live within walking distance of yoga studios, fitness facilities, and organic dining restaurants. They support local farms and farmer's markets and some grow their own produce.

Entire industries are developing or adjusting services to cater to this increased interest in wellness, Business Insider's Lina Batarags reported. Consider wellness, which is increasingly regarded as a modern embodiment of luxury. Accordingly, an array of spas and studios offering treatments like cryofacialsweeklong retreats, and vitamin IV drips are delivering those experiences.

When it comes to real estate, they've expressed interest in trends like eco-conscious building practices and expect a high level of smart-home technology.



Millennial millionaires are practical and reliable when it comes to car ownership. The most frequently-owned car model among millennial millionaires is a BMW 3 series (one of the brand's more affordable models), followed by a Honda Accord and Jeep Cherokee.

The top car brands millennial millionaires drive are Toyota, Honda, and Ford, the report indicates.

A BMW 3-series car has a starting price of $40,750.

But some millennial millionaires indulge in collectible and classic cars. As the report states, at the 2019 Monterey Classic Car event, there was an increase in buyers among this cohort, who preferred vintage cars from the 80s and 90s and sports cars.



The typical millennial millionaire donates to charity, more than any other generation. Political causes are their charity of choice.

Thirty-five percent of millionaires donate to charity, compared to 56% of millennial millionaires, according to the report.

And 70% of these millennials are willing to spend more with brands that support causes they care about.

"More and more, the wealthy are evaluating a brand in terms of: What mission does this brand represent?" Mike Phillips, Wealth-X's vice president of marketing and communications, told Batarags. "How does it contribute to the greater good ... If I choose to purchase this product, what does that say about me and my values?"



The US is scrambling to invest more in Asia to counter China's 'Belt and Road' mega-project. Here's what China's plan to connect the world through infrastructure is like.

Sat, 11/09/2019 - 10:24am

  • The Belt and Road Initiative is one of China's most ambitious projects.
  • It involves partnering with dozens of countries around the world through trade and infrastructure projects, such as shipping lanes, railroads, and airports.
  • Supporters say it's a way for China to invest in emerging markets and strengthen ties. Critics say this is a way for China to use money to leverage political gains and increase its global power.
  • The US is now trying to create a viable alternative to the project by increasing investment in Asia. Whether that will work, though, is not clear.
  • Learn more about the mega-project here.
  • Visit Business Insider's homepage for more stories.

China is undertaking what it considers the largest project of the century — linking itself with more than 100 countries across Asia, Africa, Europe, and Oceania through trade.

The main focuses of the Belt and Road Initiative (BRI) — also known as "One Belt, One Road" — are in infrastructure, transportation, and energy. The initiative was first announced in 2013, and is seen to be President Xi Jinping's pet project.

Most BRI deals involve China lending vast amounts of money to other countries to build new railroads, shipping lanes, and other ventures in those countries. Investment from China alone in the project is estimated to be between $1 trillion and $8 trillion.

Proponents of the BRI say it's a way for China to invest in emerging markets and strengthen its ties with them. However, the inner workings of the BRI are shrouded in secrecy, and some projects have already been abandoned due to host countries being unable to pay back their loans.

Critics also say that by creating these loans, China is engaging in debt-trap diplomacy — a strategy of extracting political concessions out of a country that owes it money.

Scroll down to learn more about the BRI.

SEE ALSO: This map shows a trillion-dollar reason why China is oppressing more than a million Muslims

The Belt and Road Initiative is a massive trade and infrastructure project that aims to link China to dozens of economies across Asia, Europe, Africa, and Oceania.

It consists of two parts: the "belt," which recreates an old Silk Road land route, and the "road," which is not actually a road, but a route through various oceans.

The Silk Road was an ancient land route across Europe and Asia that connected traders and travellers from regions like the China, Persia, and the Roman Empire.

Merchants used to transport silk and other commodities by camel or horse along those roads.



As of November 2019, 138 other countries are part of the project, according to China. They include New Zealand, Russia, Italy, and even Syria.

Source: Chinese government



BRI partnerships typically come in the form of joint memoranda of understanding to support future projects. But these contracts are typically shrouded in secrecy, so it's hard to understand how they work.

China has invested between $1 trillion and $8 trillion in projects along the Belt and Road, mainly in infrastructure, transport, and energy.

These include gas pipelines in Pakistan; a port in Kazakhstan; and a rail route linking Yiwu, China, to the United Kingdom.

Source: Center for Strategic and International Studies, South China Morning Post



This 2017 photo shows a freight train directly running from Kouvola, Finland, to Xi'an, China. The trip takes 17 days, and is supposed to be faster than sea travel and cheaper than air.

Source: New China TV



Here are workers building a natural gas pipeline linking China and Russia — one of the landmark BRI projects between the two countries.

Russian President Vladimir Putin — whom China's President Xi calls his "best and bosom friend" — has propped up China's Belt and Road Initiative in the past.



China's ambitions have even reached the Arctic, with plans to build a "Polar Silk Road" with infrastructure projects and shipping routes between the Arctic and Asia.

China first announced plans to build the Polar Silk Road in January 2018.



Critics have warned that the building infrastructure projects under the BRI can cause environmental damage and displace people.

China — which has led action on climate-change policies in recent years— has pledged to build environmentally sustainable BRI projects in the past, but has not given much detail on how it would do so, the Center for Strategic and International Studies said.

Activists and locals have spoken out about the potential environmental damage of various BRI projects.

In 2018, activists in Kenya managed to halt, via judicial order, the construction of a Chinese-financed coal plant because it would destroy the environment and human health.

Environmental groups in Indonesia have also warned that the building of a $1.6 billion dam on Sumatra island could wipe out a species of orangutan, the Financial Times reported.

A villager in Bom Or, Laos, told the Financial Times that Laotian and Chinese officials had visited more than 30 households asking them to make way for a building, without offering them financial compensation or other housing.



Regardless, China is immensely proud of the BRI — it's considered President Xi Jinping's pet project. Experts say that you can just cite it to get government funding for projects.

"If you package something and say it's Belt and Road-related, you have a much better chance of getting money from the Chinese government," Stanley Rosen, a China expert and political-science professor at the University of Southern California told Business Insider earlier this year.

Similarly, Charles Parton, a former EU diplomat in China, told the Financial Times in 2017: "If you want to get projects or programmes approved, you say it's OBOR [One Belt, One Road], so everything becomes OBOR."



China is so keen to plug the project that state media outlets have made multiple music videos to promote it.

One video published by China Daily, ostensibly aimed at Gen-Z, shows children "from participating nations of The Belt and Road" singing these lyrics:

"The world's we're dreaming of starts with you and me / The future's coming now, the Belt and Road is how."

Source: New China TV



In March 2019 China claimed one of its biggest victories for the BRI by signing a memorandum of understanding with Italy, the 8th-biggest economy in the world.

The two countries' MOU, reportedly to support a joint infrastructure project, is non-binding — meaning there will be no legal ramifications for Italy or China if either withdraws from the agreement.

The exact details of what the memorandum aims to achieve are also unclear, further shrouding the BRI in secrecy.



The US isn't a part of BRI, but recognizes and deems it a threat. In November 2019, President Donald Trump's administration announced it will invest and trade more in Asia to counter China's economic power in the region.

The Trump administration in November launched the "Blue Dot Network," a US-led public-private initiative to increase "financially sustainable infrastructure development" in Asia.

The organization wants to "promote market-driven, transparent, and financially sustainable infrastructure development in the Indo-Pacific region and around the world," it said in a statement.

It appears to be directly targeting countries concerned about the BRI's opacity.



In 2016, China established the Asian Infrastructure Investment Bank, an regional development bank to fund infrastructure — like an Asian version of the IMF. The UK, Germany, and France all joined despite the Obama administration warning its allies not to.

Source: Asian Infrastructure Investment Bank, Business Insider



Though China typically stays out of other countries' politics, the BRI has given it reasons to get involved in some of them. When Turkey invaded northeastern Syria — a BRI partner nation — in October, China told Turkey to stop (and was ignored).

Source: Chinese government, South China Morning Post



The project has also amplified feuds between other countries. India is suspicious of the BRI because of Beijing's plans to build the China-Pakistan Economic Corridor (CPEC).

Projects along the CPEC include a coal-fired power plant, schools, and solar energy facilities, according to China's state-run Xinhua news agency.

Tensions between India and Pakistan, meanwhile, reached a height this year when India claimed the disputed region of Kashmir as its own federally-administered territory.



China's backing of Pakistan-based infrastructure projects has also appeared to encourage it to support Beijing in other political issues. Pakistani Prime Minister Imran Khan has routinely ignored criticism of China's abuse against its Muslim minority.

Khan has repeatedly claimed not to know anything about China's oppression of the Uighurs, a mostly-Muslim ethnic minority in its west.

Critics told Business Insider earlier this year that through the BRI, China had bought Pakistan's silence.



It's an example of what critics call Chinese "debt-trap diplomacy" — the strategy of extracting political concessions from a country that owes money. Another example of this can be seen in BRI countries shunning Taiwan.

Taiwan has been self-governing for decades, but Beijing continues to call it a Chinese territory. Tensions between the pair have ramped up in recent years because the island nation's incumbent president is particularly critical of China.

A handful of countries, which are also BRI partners, have formally severed ties with Taiwan in recent months, leaving the island nation with just 15 allies left globally — all of whom are relatively impotent on the world stage.

Taiwan's allies include the Pacific island nations of Nauru and Tuvalu, and Eswatini, a southern African nation of 1.4 million people

Many of those countries have also restored or improved ties to China after cutting off Taiwan.



Not everyone agrees with that characterization, though. An Australian think tank found that China's actions in the Pacific do not, at this point, show any sort of debt-trap diplomacy.

"The evidence suggests China has not been engaged in problematic debt practices in the Pacific as to justify accusations of debt trap diplomacy, at least not to date," the Lowy Institute said in October 2019, according to The Guardian.

The think tank did warn, however, that the "sheer scale of Chinese lending and the lack of strong institutional mechanisms to protect the debt sustainability of borrowing" could still bring risks for the borrowing nations.



One thing is clear: China has poured a lot of money and effort into the BRI, and is unlikely to stop. The US — the only world power strong enough to take on China — will have to step up if it wants to be taken as a serious alternative in Asia.

The world's first hybrid cruise ship is currently on its maiden voyage, an 18-day trip to Antarctica with 450 guests onboard. Here's a look inside.

Sat, 11/09/2019 - 9:57am

  • Hurtigruten, a Norwegian expedition cruise company, unveiled the world's first hybrid cruise ship earlier this year. It is currently on its maiden voyage to Antarctica with 450 passengers aboard. 
  • The vessel, MS Roald Amundsen, runs on low sulfur diesel fuel that is supported by battery packs, cutting emissions by 20%.
  • But it's not all science and technology on board: The ship is also equipped with an infinity pool, luxury suites, three restaurants, and a glass-encased sauna.
  • Visit Business Insider's homepage for more stories.

Luxury and sustainability are merging in the world of yachts.

In September, the world's first hydrogen-powered superyacht was unveiled at the Monaco Yacht Show. And right now, the world's first hybrid, battery-supported cruise ship is making its maiden voyage to Antarctica with 450 passengers aboard, according to Robb Report.

The MS Roald Amundsen's first expedition to Antarctica is fitting – it was named after the eponymous legendary Norwegian polar explorer. The ship was unveiled by Hurtigruten, a Norwegian expedition cruise company, this summer.

The 459-foot cruise ship is equipped with battery packs that support its low sulfur, diesel-powered, Rolls Royce-built engines.

That's not to say the cruise is devoid of the lavish trappings of a typical cruise ship: There's also an infinity pool, a glass-encased sauna, three restaurants, and luxurious cabins on board. Throughout the ship, there are almost 600 works of art produced by young Norwegian artists, handpicked by the queen of Norway.

Prices for a future cruise featuring the same route start at $14,720 per person. The more lavish cabins raise that baseline to $23,046 per person.

Keep reading for a look inside the cruise ship.

SEE ALSO: The world's first hydrogen-powered superyacht was unveiled at the Monaco Yacht Show. Here's a look inside the game-changing 367-foot vessel concept.

NOW READ: 10 packing essentials for cruises that will save time, space, and money — from foldable luggage to a portable safe

The MS Roald Amundsen is the world's first hybrid cruise ship.

Source: Hurtigruten



It runs on Rolls Royce-built engines powered by low sulfur diesel fuel and batteries, which, according to the ship's developer, lowers the ship's CO2 emissions by 20%.

In addition to its operating systems, the ship is also committed to sustainability in other ways. There are no single-use plastics aboard and the uniforms worn by the crew are made from recycled ocean plastic.

Source: Hurtigruten



The cruise ship is currently on a full capacity, 18-day maiden voyage to Antarctica.

The maiden voyage started in Valparaíso, Chile before cruising south along the coast of South America toward the Drake Passage. From there, the ship spends three days in Antarctica before returning to Punta Arenas, Chile.

Passengers can disembark in Antarctica and partake in activities that include kayaking, hiking, whale-watching, and penguin-watching.

Source: Hurtigruten



And it's not just science and sustainability on board: Like other cruise ships that support travels of that length, the ship is flush with luxury amenities. The ship has 264 cabins.

Source: Hurtigruten



The Scandinavian-inspired interior design features oak, granite, birch, and wool throughout the cabins.

Source: Hurtigruten



Many of the suites have private lounging areas and balconies with hot tubs.

Source: Hurtigruten



All passengers have access to the infinity pool and the hot tubs on the observation deck ...

Source: Hurtigruten



... and the sauna and wellness center, which also offer sweeping views.

Source: Hurtigruten



The ship has three restaurants and other communal amenities ...

Source: Hurtigruten



... including a science center where passengers can attend lectures and learn more about Arctic exploration.

Source: Hurtigruten



The ship will be conducting arctic expedition cruises into 2020.

Source: Hurtigruten



The MS Roald Amundsen is just one example of the luxury travel industry becoming more eco-friendly in 2019.

Business Insider previously reported that a model for the first hydrogen-powered yacht was unveiled in September by Sinot, a Dutch yacht-design company. The 367-foot vessel will be completely powered by liquid hydrogen and fuel-cell technology. Its only emission will be water.

Beyond boats, luxury African safaris are also embracing the eco-friendly. In August, Business Insider's Katie Warren reported on a Botswana safari company equipped with conservation camps for children, where lessons on the environment, health, and nutrition are taught.

Increased attention to sustainability and conservation in the luxury travel sector play into the larger trend of "transformational travel." Ultimately, the ultra-wealthy want to leave their vacation with a transformative, emotional experience to bring home, and in some cases, want to make a positive impact on the places they visit.



Tesla short-sellers have swung back to the SolarCity side of the business. Here's why. (TSLA)

Sat, 11/09/2019 - 9:22am

For years now, Tesla has a been a battleground for short-sellers. At times, they've made money; but they've also lost money, most recently when Tesla posted a surprise third-quarter profit and the stock rocketed back above $300.

Tesla shares are volatile, but so are short-sellers attention spans. For much of the past two years, their focus was on Tesla's automotive business, and that made sense. Even today, automotive revenues are the vast majority of Tesla's topline, at over $14 billion year-to-date, while the energy business has kicked in just over $1 billion.

Through three different vehicle programs: Model S, Model X, and Model 3, Tesla had demonstrated an enviable ability to generate massive buzz and sign up customers. But when it came to actually building and delivering cars, Tesla struggled. The modern auto industry is very much about manufacturing processes, but Tesla didn't want to follow any leaders. CEO Elon Musk's ego got in the way of smooth execution on this front.

Short-sellers smelled blood and moved in, knowing that the cash-intensive nature of the car business would weigh on Tesla's ability to post profits and raise capital. Some big names — Jim Chanos, David Einhorn — started making media noise, arguing that Tesla was headed for bankruptcy.

Musk didn't help Tesla's cause by entering a chaotic period in which he sought to take the company private, failed, and had to submit to an SEC investigation and pay millions in penalties, forfeiting his chairman title in the process.

A stabilized car business sends short-sellers looking for weakness elsewhere

However, following earnings results from Q3 2019, Tesla looks as though it's stabilized its Model 3 operations and can move on to the next challenge, launching its Model Y crossover. (Revenues appear to have leveled off after reliably expanding by about million per quarter, but the company would probably exchange revenue growth for steadier profits, and in any event the balance sheet now has over $5 billion in cash with only two months left in 2019, an historically unusual situation for Tesla.)

Shorting Tesla based on a negative view of a car business that's grown from less than 50,000 in yearly sales to almost 250,000 in 2018 or probably 300-400,000 in 2019 is, to borrow a phrase from the chess world, a busted position.

That's why shorts have zeroed in on solar. For the record, I thought that Tesla's 2016 merger with SolarCity — Musk was chairman, his cousin Lyndon Rive was CEO, and his brother Kimball was on the board — was a terrible idea. My main concern was that Tesla would be adding SolarCity's rather weird debt-load (it was based on long-term solar-panel leases) to the balance sheet at a time when Tesla needed resources to launch Model 3.

There really isn't much point to sugarcoating the SolarCity reality at the time, which is that it was headed for insolvency. Chanos had already bet on this via a short position that he took in 2015; the merger snookered that, and Chanos moved on to making Tesla his most talked-about position. 

Musk now has some shareholders alleging that the SolarCity merger involved fraud and self-dealing, a question for the legal system to sort out. From a Tesla investor point of view, the negative aspects of the merger were oversold: the stock tanked in late 2016 but by mid-2017 it was surging toward record highs, nearing $400. The long consensus was that all the worry about SolarCity created a terrific buying opportunity.

Always being right but losing money anyway

The tendency of Tesla to reward long investors — the stock is up over 1,200% since the company's 2010 IPO — is both frustrating and addictive to short sellers. After all, the stock is up ... 1,200% in less than a decade, and during that time Tesla has never posted an annual profit. Hence the addiction.

But what about the frustration? Well, as I noted in 2017:

The shorts have always been right about Tesla, but it hasn't mattered. They were right when it was just a car company selling a tiny number of cars and making no money. They were right when it became an energy storage company. They were right when it rescued SolarCity. 

GRRR! Few things are worse on Wall Street than always being technically right while still losing money. 

If long investors are sort of like grand military strategists, surveying financial continents and deploying forces to hold ground and avoid conflict, short sellers are more like guerrilla tacticians, flitting from skirmish to skirmish, savoring the melees. Any weakness is a target.

With Tesla's automotive business now as strong as its been in the company's history, the weak point is now obviously solar. To the markets, that business is as irrelevant as its ever been; despite the foolhardiness of the tie-up, Tesla shares have consistently unyoked themselves from the SolarCity burden, and in any case, Tesla hasn't exactly poured money into growing SolarCity (quite the opposite, in fact, as Musk has admitted Tesla borrowed staff from SolarCity to get the Model 3 out the door).

As fas as I'm concerned, Tesla solar is basically a nothingburger and I half-expect Tesla to wind it down once it figures out a way to get the debt off its balance sheet. But naturally, Musk, a committed solar booster, has shown himself to be overly sensitive to short-sellers, poking Einhorn after the guy complained about Tesla in his Q3 investor letter (and, pointlessly, inviting Einhorn to tour Tesla's facilities when Einhorn appeared in his letter to suggest that Musk should face prosecution).

Interestingly, the short attack on solar has taken what was an invisible business and brought it back into the picture. This could actually improve Tesla's solar fortunes. But that's always a risk in guerilla warfare: assault a weakness enough times and you could inadvertently transform it into a strength.

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NOW WATCH: Tesla unveiled its Model Y — here are the best features of the $39,000 SUV

THE HEALTHCARE PAYMENTS REPORT: The strategies payments leaders are using to take advantage of the $3.7 trillion opportunity in US healthcare

Sat, 11/09/2019 - 9:05am

The US healthcare payments market is enormous: Healthcare expenditure hit $3.65 trillion in 2018, per projections from CMS, and this spending is only expected to accelerate.

But the industry is at a tipping point. Better-informed and more critical customers, along with a push to combat the complex and opaque medical billing process, are creating demand for innovation in the healthcare payments space.

Despite a titanic market size and room for innovation, digital transformation is occurring incrementally at best. In fact, 90% of healthcare providers still leverage paper and manual processes for collections, according to data from a report commissioned by InstaMed and compiled by Qualtrics.

And even when healthcare providers offer digital solutions like online portals to customers (which 60% do), they seem to be falling short: While the majority of consumers claim they want to make appointments (68%), fill out registration forms (68%), and pay healthcare bills (61%) online, the share of consumers who actually do so hovers around 30% for those use cases. Discrepancies like these make healthcare payments a greenfield for lucrative digital innovation.

In The Healthcare Payments Report, Business Insider Intelligence looks at the healthcare payments process, including the types of healthcare payments, the stakeholders making them, where those payments are going, and what's driving change in the market. We then examine payments companies' innovations from the past year that address healthcare payments' most pressing challenges, analyze why they're lucrative, and discuss how other payments companies can learn from the innovations to furnish their own solutions.

The companies mentioned in this report are: InstaMed, JPMorgan, Liquid Payments, Patientco, Waystar

Here are some of the key takeaways from the report:

  • The US healthcare payments market is massive: Total US healthcare expenditure hit $3.65 trillion in 2018, per projections from The Office of the Actuary in the Centers for Medicare & Medicaid Services. For reference, consumers spent slightly less on retail purchases — $3.63 trillion — in 2018, per Internet Retailer.
  • But healthcare payments innovation has failed to keep up with consumer demands due to providers' reliance on legacy processes, and this may be hurting providers' bottom lines. 
  • Healthcare payments are complicated by the different stakeholders — providers, payers, and patients — that have a role in each transaction. These stakeholders' needs are shifting as the market changes: Consumers are taking a more active role in paying for their healthcare while states are pivoting toward a model that compensates providers based on the quality of their services rendered rather than the quantity.
  • Some payments firms are successfully adapting to the shifting market by creating digital solutions that balance the evolving needs of the entire healthcare payment value chain. 

In full, the report:

  • Outlines the structure of the current healthcare payments market.
  • Analyzes the forces and stakeholders driving change in the market.
  • Highlights companies that are implementing innovative solutions in the healthcare payments space, and offers key takeaways that other players can apply to their own approaches.

Interested in getting the full report? Here are three ways to access it:

  1. Purchase & download the full report from our research store. >> Purchase & Download Now
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SMB LENDING REPORT: How alt lenders are providing SMBs with new funding options, and the ways incumbents can respond to stay ahead

Sat, 11/09/2019 - 7:01am

This is a preview of a research report from Business Insider Intelligence, Business Insider's premium research service. To learn more about Business Insider Intelligence, click here. Current subscribers can read the report here.

Small- and medium-sized businesses (SMBs) are vital creators of wealth, income, and jobs in the global economy. For example, they make up 99.9% of all private sector businesses in both the US and the UK, and they employ 60% and 48% of all workers in those countries, respectively.

The income and assets of these businesses make them an irreplaceable customer base for financial institutions. However, incumbent financial institutions are falling short of SMBs' lending wants and needs.

Fintechs — including alt lenders, payment providers, and lending platforms — are changing the SMB lending space by filling that gap and capturing an increasingly large sliver of the SMB lending market. For example, alternative financial providers only accounted for 2%, or £11.5 billion ($14.7 billion), of the UK SMB lending market in 2018. However, their share is projected to surge to 9.1%, worth £52.6 billion ($67.4 billion), by 2021.

In the SMB Lending Report, Business Insider Intelligence will examine the key players in the SMB lending space, determine the advantages of each player, and discuss how incumbents can improve their offerings to better serve SMBs and stave off the growing competition from alt lenders in the space. Additionally, we will look at what the future of SMB lending will hold.

The companies mentioned in this report are: NatWest, BNP Paribas, Esme Loans, OnDeck, ING, Kabbage, Funding Circle, Lending Club, PayPal, Square, Lendio, ING, Funding Options, INTRUST Bank, Behalf, Lending Express, and Fundbox, among others.

Here are some of the key takeaways from the report:

  • SMBs are underserved by conventional lenders, so fintechs are increasingly offering digital services tailored to meet SMBs' wants and needs.
  • Some incumbents have already woken up to the opportunity of better serving SMBs and leveraging this revenue stream, but the majority are still unaware.
  • This has given fintechs the opportunity to grow their market share among SMBs. If incumbents don't fight back with their own digital services, they will like lose further share to fintechs. 
  • There are three main ways incumbents can revamp their SMB lending products, each of which requires a different level of effort: partnering with fintechs, developing tech-enabled solutions in-house, or launching their own challenger products. 

 In full, the report:

  • Outlines the current state of the SMB lending space.
  • Details the different players that are involved in SMB lending.
  • Explains three ways in which incumbents can up their SMB lending game and fight off competition.
  • Highlights the benefits and hurdles that come with each of those strategies.
  • Discusses what the future of the SMB lending space will hold.

Interested in getting the full report? Here are two ways to access it:

  1. Purchase & download the full report from our research store. >>Purchase & Download Now
  2. Subscribe to a Premium pass to Business Insider Intelligence and gain immediate access to this report and more than 250 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now

The choice is yours. But however you decide to acquire this report, you've given yourself a powerful advantage in your understanding of SMB lending.

Join the conversation about this story »

SoftBank-backed startup Fair burned through nearly $400 million in 10 months. Insiders reveal how Softbank stepped in and cleaned house in the wake of WeWork.

Sat, 11/09/2019 - 7:00am

  • SoftBank-backed Fair burned through nearly $400 million in 10 months, a cautionary tale of a startup on an explosive growth path. 
  • A dozen current and former employees said Fair's unconstrained growth was its undoing. It hired people it didn't have jobs for and bought millions of dollars in inventory it lost track of as it burned through funding, they said.
  • SoftBank stepped in to manage the company in recent weeks, installing an interim CEO. Fair laid off hundreds of employees and is reevaluating its business model. 
  • Click here for more BI Prime stories.

When Scott Painter wanted to get an engineering project over the finish line at Fair, his short-term car leasing company, he pulled out all the stops.

In February, programmers spent a week in a swanky Santa Monica rental home they dubbed the "Fairbnb," sprinting to create a functionality that would help the company better partner with Uber.

As they worked, a chef prepared meals. A masseuse was on hand to physically ease the tension. And some developers offered others Adderall to help the team stay focused, multiple employees who were there said.

Back then, the startup was flush with cash. It had raised $385 million in a Series B funding round two months earlier, in December 2018, led by SoftBank's Vision Fund.

Painter, a serial entrepreneur described by employees as a charming visionary, appeared to be on a roll. Fair had gone from a stealth-mode startup in 2016 to an app with 40,000 active users, including a partnership with Uber, in just two years.

Today, those millions are gone. Eight months after the swanky "Fairbnb" retreat, Fair found itself needing an emergency cash injection.

SoftBank, already on edge after a tumultuous autumn dealing with WeWork, swept in last month, initiating an audit, helping the company slash headcount, and infusing an extra $25 million to keep it afloat. Painter relinquished his role as CEO to a SoftBank insider but stayed on as chairman. It's the first time SoftBank has put one of its own in the top executive role, said a source close to the company.

Business Insider spoke with Painter as well as 12 current and former Fair employees about what it's like to be a Softbank-backed company in the wake of WeWork. Most declined to be identified, citing non-disclosure agreements.

Painter claims he's built a real business. But with no prospects of turning a profit, he needs money to keep coming.

"We've built the hardest part; we have to figure out how to finance all of it," he told Business Insider from a conference in Portugal. "We're at a point now where we have to get it right, given our scale."

Employees told a different story. They said Fair's unconstrained growth was its undoing. It hired people it didn't have jobs for and bought millions of dollars in inventory it lost track of as it burned through funding, they said.

Fair's accelerated expansion, followed by SoftBank's sudden application of the brakes, echoes WeWork, which ousted CEO Adam Neumann after a disastrous attempt at going public. As SoftBank moves to put more limits on founders in light of the WeWork debacle, it also hints at how the giant investor might shake up other portfolio companies.

Painter rejects the comparison to WeWork, saying that the car leasing business is more attractive than real estate. Fair is a "fundamentally different business than WeWork," he said – one that, while capital intensive, offers higher margins. And Fair owns hundreds of millions of dollars worth of cars now. For the same amount, WeWork can only own only a handful of buildings.

Representatives for Fair and SoftBank declined public comment. We reached out to Painter directly.

A deal with Uber

Painter started Fair to give drivers a debt-free option to rent cars with no long-term commitments.

The company accepted customers whose credit scores might otherwise disqualify them from a lease, and drivers could view inventory through an app, eliminating the need to walk into a dealership. They paid a nonrefundable "start payment" of two to three months' cost.

As SoftBank-backed, money-losing Uber geared up to go public, Fair entered another market by acquiring the ridesharing company's money-losing leasing program this January. Lyft has had a similar tie-up with three rental car providers including Hertz since March 2016, a Lyft spokeswoman said.

Employees were succinct in describing what they saw as Fair's weakness: the company bought too many cars for too much money, then tried to rent them out too cheaply and without the infrastructure to manage them. The Uber deal exacerbated those problems, they said.

The company bought cars for the ridesharing platform for $12,000 to $20,000 and charged drivers a few hundred dollars a month, then refurbished the cars at the end of the short-term leases. Adding on the Uber program, with about 15,000 drivers, led to a huge increase in costs as the company looked to expand inventory fast this year.

Anticipating more growth, Fair added bodies at every level, sometimes before they had responsibilities to fulfill. One employee said the company hired senior account managers for seven or eight markets. Because Fair never formally opened the areas, the employees sat in the territories for a year on payroll, and some moved jobs to manage lots, this person said.

Employees said that the ridesharing part of the business was more profitable for Fair than the general consumer business because it had less user acquisition cost and more dependable demand.

"We're excited about both sides of the business," Painter said. He noted that Fair still needs to figure out the financing side of the consumer business, because it relies on mega-credit lines to finance those cars with banks including Ally and Goldman Sachs.

Long wait times

Current Uber driver John Mizerek, who hasn't owned a car in six years, has tried Fair-Uber and Hertz-Lyft. He first drove for Lyft with a Hertz car for more than a year in Los Angeles before he switched to Uber and Fair in June, seeking to try a new platform and make more money, he said.

Mizerek faulted Fair for extensive wait times at their car depot, with every visit taking between 90 minutes and three hours. He said the depot had a snack cart to appease drivers facing long waits. With Lyft, he can't remember spending more than 15 minutes getting a rental. He had multiple banking issues with his Fair account, including erroneous charges that he said led to overdrafts. Poor email support led him to try to attract company attention on social media.

Mizerek's frustrations can be traced to the company's focus on growth without corresponding attention to underlying infrastructure, employees said.

While the company's server infrastructure was spectacular – one programmer compared it to Netflix, the gold standard – Fair's employees were frustrated by a poor backend. Operations relied on cumbersome Google spreadsheets and manual inputs, and the whole process was prone to user error, even when Fair added systems like fleet maintenance software Fleetio.

Once, an employee recalled, a colleague sent 80 cars to a town in Georgia after mistyping the state.

"I never met one engineer that was incompetent, but the whole thing was dysfunctional," said one employee, highlighting the lack of technical leadership.

Fair only began to seriously look for a chief technology officer in recent months, said an employee who was there for years. Multiple tech employees said Painter ignored their concerns about technical problems and direction, telling staff in an all-engineers meeting they were free to find another job.

Speed was of the essence: the backbone for the ridesharing program was built out operationally in two months, "which is absolutely unheard of," said one employee. But a rush to push out new functionalities often led to lack of field training and frustration for staff and customers, employees said.

To soothe customers and stave off negative reviews, employees said they'd send gift cards and cover repairs dealership wouldn't, adding to costs.

"One guy would go out and spend $10 million on cars, then the finance team would say, 'What the f---?'"

Well before SoftBank's cleanup effort, McKinsey came in to assess operations, according to sources. Mid-level employees at Fair told Business Insider the problem was Fair's focus on hiring more people at the expense of investing in operations tools – and they didn't need a consultancy to tell them that.

McKinsey "did a whole analysis and found out a large percentage of our inventory could not be accounted for. That was due specifically to the manual processes," said one employee, noting this has improved. At one point, the source said Fair could only account for 10% of their cars, since they weren't scanned into the proper systems, and now the company knows where 97% are.

A spokeswoman for McKinsey said the company does not comment on client work.

Leadership silos compounded the problem.

"One guy would go out and spend $10 million on cars, then the finance team would say, 'What the f---?'"

Executives also had side projects that vacuumed talent and spend. For example, Fair leased an old Walmart across from the Oakland Airport to build a facility to refurbish cars, with rent starting at about $225,000 per month, two sources said. Painter said that number was incorrect, but he declined to give specific figures.

"None of the math made sense," said one source, who called it "the Willy Wonka of car refurbishment."

"Fair is not and has not been recklessly spending capital," Painter wrote in a message. "It was never a part of our culture and despite the fact that it makes a salacious story, it isn't true. Fair is a transformative idea operating in an asset / capital intensive environment. The simple truth is that the vast majority of our capital is required to finance the cars which generate revenue. Fair doesn't have a cultural problem; it has an extremely capital intensive business that needs to operate at scale to generate sufficient cash flow to work."

Painter's vision

Employees said Painter often used confusing metaphors to explain his vision, and now joke about how he frequently used sailing as an analogy, which came off as out-of-touch. And in an two-hour speech to employees who came in via Fair's acquisition of Ford's leasing program Canvas in September, sources recounted that Painter said he was looking for "crusaders" and said he would "liberate" the employees from Ford, who he compared to prisoners of war.

"If we're talking about spending SoftBank's money on sake and tuna, I'd guess I say I was a crusader in that area," one employee quipped. Most of the Canvas employees were laid off, either in immediate post-acquisition cuts or the more recent layoffs, employees said.

Painter declined to discuss Canvas, including his speech, calling the employees "bitter."

Some employees were also troubled by their personal work for Painter, echoing WeWork employees' complaints about their work for then-CEO Neumann's extended family.

"We'd have to assist Scott's [16-year-old] son with getting a car," one employee said. "His profile had a SpongeBob SquarePants license - the license picture was SpongeBob."

Painter said that was not an instance of nepotism, and that Fair took no risk in getting his son a vehicle. He highlighted that Fair is a good option for new drivers, among other groups, who want flexible ownership options.

"Not only is the son of the founder the lowest-risk customer possible, we must work towards evolving the product to serve a new generation of drivers that want everything Fair offers," he said.

'No money's going in or out'

Per the Wall Street Journal, SoftBank is taking a tougher stance with its portfolio companies post-WeWork, and is now emphasizing corporate governance. Before layoffs, Fair employees saw SoftBank's actions firsthand, in what could be a blueprint for work at other portfolio companies that need rescuing in the future.

Two weeks before layoffs, SoftBank employees appeared in the Santa Monica headquarters. Fair employees thought it was for a Series C round of fundraising, but instead some managers told them their projects were frozen. Consumers saw a huge price bump for cars. Previously, a driver might have paid $1,000 in a non-refundable deposit for a basic vehicle; now, the price jumped to $10,000, which employees explained as a way to avoid onboarding new customers.

"I didn't really understand how serious it was the first day," said one employee. "The second day was like, cancel any orders you have in process. No money's going in or out at all. The next day I realized it was bigger than I thought."

Another source compared Softbank's actions to a hostile takeover. Multiple Fair employees said they paid vendors personally, since small businesses weren't getting paid by the company, which Painter denied.

Fair quickly cut about 300 employees, with severance including one month of salary and one week of health insurance coverage, devastating those who depended on the coverage for themselves and their families, employees said.

Painter rejected employees' characterizations of their exit packages as below market standard.

"We went above and beyond what was expected or legally required," he said. "We did it based on a sense of fairness and to thank them for the work they did."

The company, under SoftBank's direction, moved quickly to curtail other expenses. Now, employees need to ask the new chief financial officer – who replaced Painter's brother – for approval on expenses over $100, multiple sources said.

SoftBank's Adam Hieber took over Painter's CEO role and will stay with the company at least through year-end, according to a person with knowledge of the situation.

He's "helping add some rigor to the process," they added.

In a Thursday memo to employees obtained by Business Insider, Hieber said he was focused on "enhancing our customer experience, while ensuring that Fair stays on the path to sustainable growth."

To that end, Hieber said his three main goals are to rework the consumer product with new pricing; "sharpen" the rideshare product; and optimize operational efficiencies.

IPO in the future

Last December, Painter told business TV platform Cheddar that in the coming year, he planned to expand to every US city and consider international markets. He also said he envisioned Fair as a public company "sooner rather than later."

"We are running the company today as if we are going to be a public company tomorrow," he said at the time.

Now, Painter, who continues to serve as chairman, said he still sees the company as on a path to an IPO – timing to be determined.

"This will be ultimately a public company because there's too much capital involved for it not to be," he said. "When that happens? Your guess is as good as mine."

A SoftBank source said no planning has gone into an IPO.

Instead, they said, Softbank's mission is to "get the company on a path to profitability much more quickly."

Get in touch! Contact this reporter via encrypted messaging app Signal at +1 (646) 768-1627 using a non-work phone, email at mmorris@businessinsider.com, or Twitter DM at @MeghanEMorris. (PR pitches by email only, please.) 

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Why are Apple Pay, Starbucks’ app, and Samsung Pay so much more successful than other wallet providers?

Fri, 11/08/2019 - 10:01pm

This is a preview of a research report from Business Insider Intelligence, Business Insider's premium research service. To learn more about Business Insider Intelligence, click here.

In the US, the in-store mobile wallet space is becoming increasingly crowded. Most customers have an option provided by their smartphone vendor, like Apple, Android, or Samsung Pay. But those are often supplemented by a myriad of options from other players, ranging from tech firms like PayPal, to banks and card issuers, to major retailers and restaurants.

With that proliferation of options, one would expect to see a surge in adoption. But that’s not the case — though Business Insider Intelligence projects that US in-store mobile payments volume will quintuple in the next five years, usage is consistently lagging below expectations, with estimates for 2019 falling far below what we expected just two years ago. 

As such, despite promising factors driving gains, including the normalization of NFC technology and improved incentive programs to encourage adoption and engagement, it’s important for wallet providers and groups trying to break into the space to address the problems still holding mobile wallets back. These issues include customer satisfaction with current payment methods, limited repeat purchasing, and consumer confusion stemming from fragmentation. But several wallets, like Apple Pay, Starbucks’ app, and Samsung Pay, are outperforming their peers, and by delving into why, firms can begin to develop best practices and see better results.

A new report from Business Insider Intelligence addresses how in-store mobile payments volume will grow through 2021, why that’s below past expectations, and what successful cases can teach other players in the space. It also issues actionable recommendations that various providers can take to improve their performance and better compete.

Here are some of the key takeaways:

  • US in-store mobile payments will advance steadily at a 40% compound annual growth rate (CAGR) to hit $128 billion in 2021. That’s suppressed by major headwinds, though — this is the second year running that Business Insider Intelligence has halved its projected growth rate.
  • To power ahead, US wallets should look at pockets of success. Banks, merchants, and tech providers could each benefit from implementing strategies that have worked for early leaders, including eliminating fragmentation, improving the purchase journey, and building repeat purchasing.
  • Building multiple layers of value is key to getting ahead. Adding value to the user experience and making wallets as simple and frictionless as possible are critical to encouraging adoption and keeping consumers engaged. 

In full, the report:

  • Sizes the US in-store mobile payments market and examines growth drivers.
  • Analyzes headwinds that have suppressed adoption.
  • Identifies three strategic changes providers can make to improve their results.
  • Evaluates pockets of success in the market.
  • Provides actionable insights that providers can implement to improve results.
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Who has the best cheap car insurance in New Jersey?

Fri, 11/08/2019 - 6:37pm

  • New Jersey is the most expensive state in the US for car insurance, according to data from the Insurance Information Institute. 
  • GEICO, USAA and Travelers generally offer the best affordable car insurance for drivers with good or better credit, while drivers with poor credit should try GEICO, New Jersey Manufacturers, or Allstate for coverage. 
  • That said, it's critical to shop around for coverage in order to get your best rate and save. Look beyond the premium and look for the most auto insurance coverage and the lowest deductible to get the most for your money. 
  • Read more personal finance coverage. 
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Car insurance is rather expensive in New Jersey, with the average driver paying $1,309 per year. In fact, it's the most expensive state in the US for car insurance, according to the Insurance Information Institute

Car insurance companies tend to calculate rates that are different for everyone. Factors like where you live in New Jersey, your age, gender, and your driving record can all play a role in the amount you'll pay for coverage.

In New Jersey, it's very important to shop around for your coverage to get the best auto insurance policy for your money. To do this, get several quotes from several different companies and compare them. Here are a few of the best affordable car insurance companies in New Jersey to start your search.  

Who has the best car insurance in New Jersey?

Consumer Reports compiled information on insurance companies and their pricing formulas in each state. It found that a few companies offered the best coverage in New Jersey. Here are the best car insurance companies by credit level, along with the average cost for coverage for a single adult driver. 

Drivers with good credit (or scores of 670 to 739, according to FICO), will find that these three companies offer the best rates, on average: 

  • GEICO Government Employees car insurance: $1,058 per year
  • USAA car insurance: $1,446 per year
  • Travelers car insurance: $1,462 per year

Drivers with excellent credit (FICO scores of 800-plus) will see some of the best prices on car insurance, on average. 

  • GEICO Government Employees car insurance: $1,058 per year
  • USAA car insurance: $1,281 per year
  • Travelers car insurance: $1,310 per year

New Jersey drivers with poor credit will pay the most for coverage. These three companies offer the most affordable coverage, on average. 

  • GEICO Government Employees car insurance: $1,469 per year
  • New Jersey Manufacturers car insurance: $1,511 per year
  • Allstate car insurance: $2,373 per year
Who gets the best cheap car insurance in New Jersey? 

As the rates above show, the drivers who are going to see the best rates for coverage in New Jersey are those who have the best credit scores. Car insurance companies will look at lots of different factors when calculating how much you'll pay for coverage, so each one will offer you a different price. 

That said, it's important to shop around before making your final decision. To do this, get a few different quotes from different companies and compare them. 

When comparing your quotes, you'll want to look past the premium and consider the coverage types and limits. Also consider the deductible, or the amount you'll be responsible for out-of-pocket if you get into an accident. The policy with the most coverage and the lowest deductible is the best. 

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WeWork just released an investor presentation that offers numbers the company didn't include in its widely-derided IPO documents

Fri, 11/08/2019 - 6:15pm

  • WeWork on Friday released an investor presentation that shows how its new leaders are trying to make a break with the past. 
  • Among other things, the presentation indicates the company plans to focus on working with large companies, a customer group that co-CEO Artie Minson told Business Insider earlier this year is critical for growth.
  • In the document, WeWork for the first time publicly released specific data about location occupancy and other metrics.
  • The company was criticized for not publishing such numbers in its filing to go public, an effort it ultimately cancelled in the face of investor resistance.
  • Read all of Business Insider's WeWork coverage here.

WeWork on Friday released an investor presentation that offers new details about its business and turnaround plan.

The 49-slide presentation, which dates from mid-October, offers data about its operations that the company didn't include in the filings it made for its now-aborted initial public offering. The turnaround plan it lays out is an early version of one that is still in the works, a source said.

The plan laid out in the presentation called for WeWork to cut jobs in its general and administrative groups, at its venture arm, and in "growth-related functions." Under the plan, it wouldn't cut its community teams, which manage its buildings. In the document, the company's new leadership also outlined plans to sell or dispose of non-core investments, including wave pool company Wavegarden, women-focused coworking company The Wing, and online group organizer Meetup.  

Since mid-October, WeWork has moved to cut or downsize some of those businesses, initiating layoffs at coding bootcamp Flatiron School on Thursday and at Meetup on Monday and putting the company's private plane up for sale, as Business Insider previously reported.

The presentation stated that WeWork plans, as part of its turnaround plan, to focus on working with companies with more than 500 employees, a customer group that co-CEO Artie Minson told Business Insider earlier this year is critical for its future growth.

In the document, WeWork, also, for the first time publicly released specific data about occupancy at its various locations and other data.

WeWork revealed new occupancy data

Potential investors criticized the company for not publishing such information in its filing to go public, an effort it ultimately abandoned in the face of stiff resistance from the market. Instead, the widely-panned filing opened with a dedication "to the energy of We – greater than any one of us, but inside each of us" and included multiple pages of glossy photos of WeWork locations, customer testimonials, and New Age mottos.

As of September, according to the presentation, WeWork had 600 locations, 580,000 membership, and 676,000 desks. By comparison, at the end of June, it had 528 locations and 527,000 memberships. It didn't previously disclose its number of desks.

Overall, WeWork's occupancy rate stood at 80% at the end of September, down from 83% at the end of June. By comparison, coworking rival IWG, formerly known as Regus, had an occupancy rate of 69%, according to the company's most recent earnings report in August. WeWork locations that have been opened for more than two years are 89% occupied on average. 

WeWork also said that it's getting cheaper for it to add more desks. In 2014, it spent $7,300 per desk, compared to $3,700 per desk in the first half of the year. 

For the first time, the company also spelled out how its business model works on a per-square-foot basis: 

WeWork's new leaders are signaling a break from the past

In the presentation, WeWork's new leadership team – chairman Marcelo Claure and co-CEOs Artie Minson and Sebastian Gunningham – made clear they were attempting to make a break with the company's recent past.

Under cofounder and previous CEO Adam Neumann, WeWork grew from an idea to 528 locations and 12,000 employees in nine years. But the company struggled with governance issues and a web of conflicts of interest, many of which came to light in mid-August with its IPO documents. Investor and media scrutiny of those problems and Neumann's responsibility ultimately led WeWork's board to oust Neumann, name two co-CEOs, and bring in Claure.

In one slide, the company compared its past, under cofounder and then-CEO Adam Neumann, with its future:   

Get in touch! Contact this reporter via encrypted messaging app Signal at +1 (646) 768-1627 using a non-work phone, email at mmorris@businessinsider.com, or Twitter DM at @MeghanEMorris. (PR pitches by email only, please.) You can also contact Business Insider securely via SecureDrop.

SEE ALSO: WeWork chairman Marcelo Claure told staff he's trying to clean up WeWork, after firing 13 people for abusing vendor policies

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Here is a list of the largest banks in the United States by assets (JPM, BAC, C, WFC, GS, MS, USB, PNC, TD, COF)

Fri, 11/08/2019 - 6:03pm
  • Business Insider Intelligence is launching its brand new Banking coverage in early September.
  • To obtain a free preview of our Banking Briefing, please click here.

The Federal Reserve has rolled out a list of top US banks by assets, and we've broken down exactly how these banking giants manage to stay ahead of the competition. For decades banks have been merging, partnering, and expanding — so much so that the top four banks now account for 50% of all US banking assets.

Here are the top 10 banks in the US by assets, with key insights as to how they got there, where they plan to go in the future, and how smaller banks can compete in the industry. 

1. JPMorgan Chase - $2.74 Trillion

By targeting digitally-savvy consumers and introducing artificial intelligence to its offerings, JPMorgan Chase has been able to outperform its competitors. JPMorgan is playing the long-game by acquiring millennials through digital channels — and hopes to convert them to higher-value customers later on.

Additionally, JPMorgan is investing heavily in banking technology, and boasts the biggest tech budget of all banks in 2019 with $11.4 billion. A key focus of these funds is identifying use cases to implement artificial intelligence, such as enabling investment banking clients to access analyst reports and stock information through voice assistants.

2. Bank of America - $2.38 Trillion

Bank of America has been able to cut costs and appeal to young users by adapting strategies for the digital age. The bank's digitized branches – which allow customers to access contactless ATMs and connect with call centers via video-conference technology – experienced half the traffic of nearby branches only five months after launching in 2017. 

Bank of America's digital-only services Zelle and Erica have also re-defined what the company offers its retail banking customers. Zelle allows users to digitally send real-time payments to friends and family, and by integrating this feature into its mobile app, Bank of America has opened the door for increased consumer engagement.

Bank of America has also seen success with its voice-enabled assistant, Erica, which provides customers the ability to conduct peer-to-peer payments as well as bill payments. Since officially launching in 2017, Erica has surpassed a massive 7 million users per year.

3. Citigroup - $1.96 Trillion

For three years in a row, Citibank has been named the "Best Bank for High-Net-Worth Families" by Kiplinger's Personal Finance. For customers that maintain $200,000 in deposit, retirement, and investment accounts, the bank grants them access to its Citigold Package. 

Business Insider Intelligence's Mobile Banking Competitive Edge Study also shows that Citi took the top spot for mobile banking features, as rated by consumers. Citi saw a massive increase in digital banking users in 2019 – up 11.3% year-over-year – and its mobile users grew twice as fast at 22.4% YoY. This growth, combined with the company's electronic client statements surging to 50%, demonstrates that Citi has secured its spot as one of the best banks in US.

4. Wells Fargo & Co. - $1.89 Trillion

Wells Fargo is following the lead of top competitors by targeting millennials through mobile banking services. Pay with Wells Fargo is a mobile service where users can access their most used payment features before signing into the app. Additionally, Wells Fargo's app Greenhouse helps customers simplify their bills and track spending. 

Joining the contactless payment market has also bolstered Wells Fargo's position as a leading bank. With 78% of the top 100 US merchants accepting contactless transactions, providing contactless credit and debit cards helps attract users who prefer digital banking methods — and according to Business Insider Intelligence, 44% of US consumers prefer contactless payments.

5. Goldman Sachs -  $925 Billion

Since launching Marcus, an online bank that offers customers fixed-rate, fee-free unsecured loans and high-yield savings accounts, Goldman Sachs has become one of the largest banks in the US. The banking giant has made several acquisitions for Marcus, including personal finance management app Clarity Money.

Clarity Money was an early step Goldman took to breaking into the digital-only banking industry, and allows users to open a Marcus savings account directly through their mobile device.

The firm also partnered with Apple to develop their co-brand Apple Card – giving users who have an associated iPhone access to rewards, money management features, and the ability to choose either a digital or physical card.

Acquiring and investing in startups and other businesses, combined with the decision to explore new ways to integrate technology with existing banking services, has allowed Goldman Sachs to become one of the largest banks in the US.

6. Morgan Stanley -  $875 Billion

After acquiring Solium Capital, a global provider of Software-as-a-Service for stock administration, financial reporting, and compliance, Morgan Stanley gained access to new technology and millennial employees who propelled the company into the digital banking market. 

By 2030, it is projected that millenials in North America will control $20 trillion of global assets, and Morgan Stanley is looking at Solium's young clients as its future affluent customers. 

Additionally, Morgan Stanley partnered with Box,a cloud content management service, to launch a "Digital Vault," an encrypted, cloud-based platform that allows Morgan Stanley's wealth management clients to easily share financial documents. The firm's wealth management business already contributes 44% of its revenue, and the "Digital Vault" is expected to accelerate this segment even further. 

7. U.S. Bancorp -  $475 Billion

U.S. Bancorp, the parent company of U.S. Bank National Association, earned a spot on the list of top US banks due to its commitment to competing with tech giants making their way into the banking industry.  

With Facebook, Amazon, Apple, and Google all announcing their desire to launch banking services, U.S. Bancorp decided to improve its own technology. According to Business Insider Intelligence, Terry Dolan –chief financial officer of U.S. Bancorp – said that the bank plans to partner with fintechs inorder to maintain competitive banking technology. 

8. PNC Financial Services -  $392 Billion

PNC Bank is known as a top bank in the US because it offers specialized perks and services to customers while developing original products. In 2017 PNC began offering mobile payment options to corporate clients who hold Visa commercial cards — allowing them to leverage popular mobile wallets like Apple Pay.

Additionally, in 2019 PNC piloted credit cards with card verification values that periodically refresh, in the hopes of combating fraud. Fraudsters are able to guess three-digit CVV codes relatively easily due to the limited number of permutations; but periodically changing CVVs makes stolen data less valuable. 

9. TD Bank -  $384 Billion

In addition to having extensive influence abroad, TD Bank has become one of the largest banks in the US due to its integration of artificial intelligence and utilization of digital technology. 

TD Bank partnered with to launch Clari, an AI-powered chatbot, in Canada. Clari answers customers' questions via text message and notifies them when credit card payments are due or how much they spent at a certain store. Chatbots cut down on call volume, and Clari's success in Canada will likely influence TD Bank to develop a chatbot for its US branches. 

In another partnership, TD Bank teamed up with fintech provider Amount to leverage its digital lending technology, which comes with a suite of tools including fraud detection and account verification. 

10. Capital One -  $373 Billion

Despite its recent data breach, Capital One still managed to make the list of top US banks, likely due to its ongoing commitment to digital transformation.

Capital One increased its technology staff from 2,500 in 2011 to 9,000 in 2019, launched Eno – its AI-powered chatbot, similar to Bank of America's Erica – and is in the midst of a multi-year migration of its back-end software development tools to the cloud

Capital One also acquired fintech United Income in 2019, a digital platform that offers wealth management services for people moving into retirement. The fintech combines both technological capabilities with human facets, like providing access to a team of wealth managers — making it attractive for consumers who still desire human interaction. 

How can small banks compete?

Breaking into the digital banking industry is key for smaller firms looking to become major US banks. Neobanks – digital-only banks that aren't tied to traditional banking technology or expensive physical branches – are gaining steam in the US and secured a record $2.5 billion globally in funding for the first half of 2019.

Chime, a San Francisco-based neobank, took about four years to reach one million users in 2018. It has since acquired over 4 million users — quadrupling its user base in just one year. The competition put forward by digital-only banks will eventually force traditional banking leaders to revamp their banking practices and offerings due to the increasing digital demands of consumers.

Banking Industry Analysis

The banking industry is constantly undergoing change in the digital age, and it's important for its biggest decision-makers to stay informed of how the leading US banks continue to garner success.

That's why Business Insider Intelligence is launching Banking, our newest coverage area, to keep you up to date on strategies and tactics  of the largest banks in the US.

Click here to obtain an exclusive FREE preview of Banking!

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