CA Blockchain Technology And Cryptocurrency EO

CA Blockchain Technology And Cryptocurrency EO

CA Blockchain Technology And Cryptocurrency EO

California is embracing blockchain technology and cryptocurrency in a big way, affecting employees and employers alike

The governor pushed through an executive order (EO N-9-22), effective May 4th, 2022, which supports crypto and blockchain tech in many sectors. In a nutshell, this EO aims to protect consumers, attempts to regulate web 3 tech and cryptocurrency, put the technology into state operations (in collaboration with the private sector, academia, and the communities it affects), support research and development, create jobs, get feedback from businesses and stakeholders in those businesses, and include blockchain and crypto education in state schools.

The legislation mandates the acceptance, support and regulation of blockchain technologies and currencies, and through partnerships amongst agencies, businesses and universities. If your business deals with crypto asset-related financial products and services in California, you probably already have seen smart contracts and blockchain tech for record keeping since 2018. 

Where else in the US might this apply?

Only California and New Jersey for now but other states are expected to follow the federal legislation. The CA EO and New Jersey’s two new laws all mirror and support the President’s March 9th executive order called “Ensuring Responsible Development of Digital Assets.” 

What does this mean for me?

CA Employeesthis order mandates more protection and security for not only employees but also consumers. It also aims to grow jobs and make sure Web 3 tech is being used responsibly.

CA Employersboth state and federal rules will now be enforced, which may make for more compliance requirements for employers. While some are concerned if these regulations could stifle innovation, this is a way for the state to be in alignment with the fed, which should make for more clear and consistent rules for employers to follow.

What’s my next step as a business owner?

-Get involved. If you’re a player in these industries, you should take all opportunities to share your opinions and experiences in this evolving process.

-Companies can speak up  and advocate for their positions by actively engaging in rulemaking. 

Startup Tandem, Inc. recommends submitting comments to the California Department of Financial Protection and Innovation in response to the Invitation for Comments no later than August 5, 2022.

-Toll-free: (866) 275-2677 or (916) 327-7585 

-Email: Ask.DFPI@dfpi.ca.gov

Other resources:

California Business, Consumer Services and Housing Agency (BCSH)

The Department of Financial Protection and Innovation (DFPI)

California Governor’s Office of Business and Economic Development (GO-Biz)

Sources:

5.4.22 Blockchain Executive Order N-9-22, Signed https://www.gov.ca.gov/wp-content/uploads/2022/05/5.4.22-Blockchain-EO-N-9-22-signed.pdf

Governor Newsom Signs Blockchain Executive Order to Spur Responsible Web3 Innovation, Grow Jobs, and Protect Consumers

Published: May 04, 2022

California Continues the March Toward Blockchain with Sweeping Executive Order. By Phillip C. Bauknight and Benjamin M. Ebbink © Fisher Phillips

May 13, 2022. https://www.shrm.org/resourcesandtools/legal-and-compliance/state-and-local-updates/pages/california-blockchain-executive-order.aspx?linktext=California-Continues-the-March-Toward-Blockchain-with-Sweeping-Executive-Order&linktext=State-Continues-the-March-Toward-Blockchain-with-Sweeping-Executive-Order&mktoid=127404877&utm_source=marketo&utm_medium=email&utm_campaign=editorial~California%20HR~NL_2022-06-14_California-HR&mkt_tok=ODIzLVRXUy05ODQAAAGFBEhprhXAXYCaBKLKyVXg8-ELmxofinkgqsop0xi2RMsVwjtUYRf7U40P-v_on1m2IIi5aI_oINvGTJVM05PSEkWbxvFJheod_Zl4VISBP6Nf-Uo

A.B. 2371, 2022-2023 Sess. (N.J. 2022); A.B. 1975, 2022-2023 Sess. (N.J. 2022).

Celcius – The Great Demise

Celcius seems to have overtaken Terra (luna) as the most talked about crypto disaster.

On June 13th of this year, as crypto markets tumbled, Celsius did the unthinkable and paused all withdrawals, swaps, and transfers on their platform. Essentially locking users out of access to their funds ”acting in the interest’’ of their community. Far from trusting behavior from one of the largest crypto lenders in the space.

But what is Celcius?

Celsius Network is a centralized finance lending and borrowing platform founded in 2017. Users can deposit crypto assets onto the platform and can earn generous interest rates in return, up to 15-18% every year with 80% of celsius earnings going back to their user base. 

Celsius uses crypto deposits to generate profits by loaning them out to other institutions at a higher interest rate, a similar model to a traditional banking system. Any of its 1.7 million users could purchase the Celcius token (CEL), giving holders guaranteed higher rates and lower costs. Sounds perfect, right?

Where did it all go wrong?

In theory, the banking model works but what Celcius didn’t account for is the volatility in the crypto market. When BTC and ETH suffered a pounding back in June, Celsius’ asset value fell by 50% from $24bn down to $12bn. This left the platform facing a liquidity crisis, meaning that if all investors chose to withdraw at the same time, they would not be able to fulfill demand – forcing a suspension of user funds.

What’s happening now?

Things have gone from bad to worse for Celsius members in the last few days with the platform filing for Bankruptcy on the 13th of July, casting further uncertainty over investors looking to recoup their funds.

Celsius said in a press release that the reason for the filing was “to provide the Company with the opportunity to stabilize its business and consummate a comprehensive restructuring transaction that maximizes value for all stakeholders.” 1.

In a nutshell, this means that Celcius doesn’t have the capital to cover its debts and is looking for a way forward to survive.

Will investors get their money back?

Not any time soon, unfortunately. There will be a long line of creditors looking to get their funds back and depositors on the platform will have to join that queue. Many commentators think that the wait for a refund may take years.

Crypto and inflation

In times of economic downturn, consumers go out in droves to find an asset to hedge against inflation. 

Typically we would consider precious metals such as gold and silver as a safe bet in the markets. Cryptocurrencies have often been referred to as “inflation-proof” but with what we have seen recently, is anything truly safe from inflation? 

There isn’t much doubt between speculators that BTC and ETH will bounce back, but when platforms do fail, does this help or hinder larger platforms in building trust with skeptics?.. 

Only time will tell.

References

1. Celsius. (2022, July 13) Celsius Network Initiates Financial Restructuring to Stabilize Business and Maximize Value for All Stakeholders. [press release] 

https://finance.yahoo.com/news/celsius-network-initiates-financial-restructuring-001400688.html” 

Tax Benefits of Real Estate

Tax Benefits of Real Estate

Owning real estate is far more than just having a property that spits out monthly profits, it is rather the tax advantages to owning property that make it unique to almost any other investment option out there. 

Owning real estate is far more than just having a property that spits out monthly profits, it is rather the tax advantages to owning property that make it unique to almost any other investment option out there. 

The way cash can be generated through property should not solely focus on the monthly rental income, because profit can be calculated in so many other ways. An investor can make money each month through rent, but on paper be operating at a loss – canceling out any tax obligation of owning said property.

Mortgage Interest Write Off

One of the more favored tax benefits from real estate investors. Imagine having a $500,000 mortgage and a property and you pay 4% interest per year, which amounts to paying $20,000 in annual interest. 

You can take that interest and write it against either your own taxable income on a primary residence or against any rental income you receive. If you apply this to a principal residence capped at the first $750,00 of a mortgage or if you have a rental property it makes no difference if you have a $200,000 mortgage or $5,000,000 mortgage – because that’s an expense against your rental income.

How to Save

By using the $500,000 example, let’s say you are grossing $50,000 per year in rent. Then subtract $20,000 interest paid and the revised gross amount on that property would now be $30,000 per year.

This effectively lowers the mortgage interest amount that you would usually be taxed at.

So let’s say on a primary residence you’re paying $20,000 per year in mortgage interest and you’re in a 25% tax bracket. That means you can deduct that $20k off of your income and essentially save around $5,000 in taxes if you’re in a 25% tax bracket.

This means effectively what you’re paying instead of 4% is around 3% per year because it’s classed as a write-off. This is a huge advantage of owning real estate and then leveraging your money on top.

Smart Investing

Leveraging your money in real estate is one of the unique reasons why real estate is such a solid investment long term. This way of leveraging is much different to margin and stock trading with high risks and exposure. It almost always makes sense to leverage money in real estate if you can get a long-term loan at a low-interest rate.

Start planning a better future by saving on taxes and building a real estate portfolio.

Please reach out to us at Startup Tandem with any questions you may have. We look forward to hearing from you.

Unique Ways to Optimize Retention, Engagement, Productivity

 

Appreciating your unique teammates in unique ways to optimize retention, engagement & productivity

 

As strategists, especially when we’re in the startup world, we don’t want to reinvent the wheel. We want to use evidence-based practices and constantly check our progress with data, metrics and KPIs. When it comes to people, some things are not so black and white – their needs and motivations are all different shades of gray. Therefore, ways to recognize them are not one-size-fits all, meaning each employee will need something different to stay in the job, to remain engaged, and to be productive, according to a study from Walden University’s College of Management and Technology earlier this year. Ways to recognize them are even more tough if your team is remote.

In comes the trend of personalized employee recognition. C-Suite need to consider that not all employees FEEL recognized by the same things. One may love to be part of the growing team. Another may like to share their ideas and feel heard. Yet another might really enjoy happy hours and holiday parties. And the remaining employees might like praise, a hand-written note, or a massage, respectively.

Building on the popular book of Gary Chapman, The Five Love Languages, which explores how you can show your mate they are loved, now Appreciation at Work is looking at how signs of appreciation (instead of love) are felt differently by different people in the workplace.

Words of affirmation: regular one-on-one, and public recognition such as sending an email highlighting a win or simply saying “Thank you” or “I appreciate what you did – it was a huge help.”

Acts of service: team efforts such as support during a project or group trainings and opportunities for professional development. 

Quality time: team building such as in-person team events and/ or virtual happy hours. 

Gifts: using rewards to recognize employees such as personalized gift cards or hand-written notes.

Physical: encourage feedback opportunities such as consistent 1-on-1 meetings with employees. If they can’t be in person – they should be held via zoom with the camera on, to nurture this one. Fistpumps, high-fives and hugs (real or emojis) fall under this one.

If you don’t know how your team members feel appreciated or can’t get them to take the quiz right away, consider the trends based on data gathered at SurveyMonkey.com:

Most people feel appreciated with Gifts (33%) and Words of Affirmation (32%).

While words are more straightforward, gifts might still be a challenge. One company called PERKS, is looking at how to personalize digital gift cards for employees, using these three examples:

A working mom might appreciate childcare (Care.com), meditation (a Headspace membership), and snacks (Pressed Juicery).

A career guy might most appreciate tools (a laptop stand), training (an Audible membership), and Fitness classes (Crunch Live membership).

Finally, a digital nomad might most appreciate a flexible workspace (WeWork Pass), personal development (Duolingo membership) and experiences (Lonely Planet guides).

So remember that people are complicated, but with a little observation and planning, you can show them they are appreciated, in order to optimize retention, engagement, and productivity – even in a remote and/or growing team.

Cashing in on crisis and utilizing space

Cashing in on crisis and utilizing space

Cashing In On Crisis And Utilizing Space

Whether it be commercial, residential or industrial, there’s always money to be made in real estate investing.

If we take a snapshot look at Seattle, the average house price in the year 2000 was $176,300. Millennium speculators will now be sitting pretty on any investment worth more than 5 times that much, with the average price setting back prospective buyers $915,340 – or a cool million when considering agent fees, taxes, Uhauls etcetera.

Getting A Solid ROI On An Investment

So how does a Seattleite seek a solid ROI on a million bucks? Attracting travelers to rent out your property is a sure-fire way of generating a passive income and there is no more popular platform than vacation rental giant, Airbnb. The site provides a simple, clean and concise way of linking your property with anyone globally and at a time and date of your choosing. 

real estate outlook 2022

Airbnb Listings Have Been Super Profitable In Recent Years

Last year, Airbnb listings generated a massive $48.9 billion in gross revenue for the company and its hosts, an increase of 76.6% from 2020 when gross revenue sat at 27.7% billion. During the global pandemic coupled with travel restrictions, consumer needs changed, catapulting the company to dizzying new heights.

With travel costs now further increasing due to inflation and rising fuel costs, many Americans are opting for cheaper staycation trips and if you are lucky enough to live in a location with beautiful surroundings such as Seattle, you can expect to make a pretty penny in peak seasons and weekends. Renters can also enjoy the flexibility of being a host or renting out the full property. So if you are a single homeowner, clear out the clutter in that spare bed and create a cozy space for weary travelers to rest. There is no obligation to feed your guests, but the smell of freshly baked cookies wafting through your home will be sure to add an extra point to your feedback score.

PRO TIP: Read this blog post on the Startup Tandem blog about finding an accountant in Santa Monica CA! It will help you decide on whether or not your startup needs a bookkeeper!

What Are You Waiting For?

So what are you waiting for? Get your design hat on and make profitable use of spare space and start your side gig today, all from home.

With interest rates being so volatile, it will be interesting to see what happens in the real estate market for the second half of 2022.

Business tip: On a rental using Airbnb, short term rentals can give you two or three times that amount your monthly mortgage is. Variable factors that can affect are depending on the location and the season. As a tax benefit, if you rent your home for 14 days out of the month you don’t have to pay state or federal taxes.

PRO TIP: Contact Startup Tandem if you want help with anything financial! We offer a range of service packages and can help with everything from bookkeeping to Fractional CFOs.