

Show HN: cash flow for freelancers and small businesses [retry] - thibaut_barrere
https://www.wisecashhq.com/

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kfk
_WiseCash helps you getting a better idea of what you can do with your extra
money._

How? And at what interest rates? I find this to be a very, very, annoying
thing to do. You end up piling money in your bank account that just stays
there. I think lending for me would be great, both to banks and corporations,
but this market is not as easy to access as stocks.

~~~
thibaut_barrere
Actually this is not yet detailed inside the app - but I'm preparing blog
posts on that + a dedicated feature in the app. Here is how it works:

\- you start to build a reasonably accurate situation by entering your data

\- once this is done, you can determine how much money and how long you could
use for investments, without going to $0 (you can use the burn down chart, see
the screencast, with your current bank account balance to determine that)

\- you can also alter your situation to add or tweak income and see if you can
afford that investment from a cash flow point of view

The key thing is what to invest in!

You should look for 100% no risk investments that also let you retrieve part
or all of your money in a day or two.

In France (where I'm from) we have what is called "Comptes dépôts à terme"
which present exactly those characteristics. I _think_ that the equivalent in
the US is Certificates of Deposit, but then not all offer the same guaranties,
so take informed advice!

In my case, I subscribe to "Comptes dépôts à terme" at the Credit Agricole
bank. You can lend a specific amount of money for a predetermined period of
time.

I have a 7 years DAT account, which provides an average (over the 7 years) of
2.5% (first year is at 1%, last year is at 5%, to encourage you to leave the
money here).

So this means roughly €250 of interest on average per year, for €10,000
invested.

But be _super careful_ : verify the characteristics of your investments, of
course.

In my case there is zero risk, and I can get back the money by small bits, in
24 hours, so this does not put my company at risk and I can finetune with
WiseCash.

Hope this helps!

Ping me at support@wisecashhq.com if you want to discuss that in more depth!

~~~
patio11
A brief primer for you on US financial products:

Certificates of Deposits (CDs) are issued by banks. They're insured by the
federal government against loss, up to a large enough number such that the
typical freelancer or small consultancy would expect to never lose a penny of
principal. Unfortunately, they're very poor for holding cash for
freelancers/small businesses: 1) Interest rates are currently terrible
virtually everywhere. 2) CDs have a duration, set in advance. 3 months, 6
months, 12 months, 5 years, etc etc. You can typically redeem them early,
essentially at-will, but will pay a penalty to do so.

The option which you probably want to recommend to American freelancers/small
businesses is called a "money market fund." It is a demand account, held at a
financial institution, from the perspective of the customer. You can get money
out of it essentially instantaneously. The money market fund invests in short-
term debt, and historically they're very, very good about not losing
principal. (One lost principal -- "broke the buck" \-- as a result of a
municipal bankruptcy in the 90s, and one other threatened to break the buck
during the financial crisis.) The federal government treats money market funds
as systemically important, so these days they're also explicitly federally
backed (and implicitly backed by the fund sponsor).

MMF interest rates in the United States are currently also very low -- 0.5%
yearly would be a pretty representative rate at the moment.

The best reasons for good cash management in the current interest rate
environment are a) peace of mind, b) avoiding having to borrow money at credit
card interest rates (typically the only credit source available to very small
businesses in the US), and c) sometimes you can pre-pay vendors for things on
terms which are scandalously good relative to short-term investment
opportunities. For example, when I have a few thousand dollars burning a hole
in my pocket, pre-paying a SaaS vendor often locks in a 10 to 20% APR-ified
discount.

~~~
jplewicke
One minor nit -- money market funds are no longer explicitly federally backed.
There was a temporary guarantee program, but it expired in September 2009:
[http://www.ici.org/pressroom/opinions/letters/12_pss_am_bank...](http://www.ici.org/pressroom/opinions/letters/12_pss_am_banker)
.

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thibaut_barrere
This is a SaaS I launched officially in July - any feedback is most welcome
(even if you're not a potential customer).

