Leverage

(Originally published November 15, 2022)

The last week has been pretty chaotic. Personally, the economic slowdown has shown itself at my day job, second job, and freelance work. Money just isn't being spent the way that it was six months ago. Maybe that's for the best after what has happened this week in crypto. If you aren't familiar, the world's third largest exchange became insolvent after they got over-leveraged.

This terminology may not be something that you're familiar with or you may not see how this applies to crypto, so I'm going to take a little time to explain. Many people all around the world maintain a bank account. You open a consumer account, deposit your money, and the bank holds your money for you until you go back to get it again. That's the basic format of how banking works for the consumer. However, it doesn't explain what is happening behind the scenes.

The bank uses the money that is deposited to finance other operations that make money. For example, small business loans from a community bank are generally funded from the deposits that community members have made to the bank. The bank uses cash to generate returns and then pays a VERY small amount to account holders in interest.

The reason that it's possible to confidently put your money into a bank account is that there is typically some type of guarantee of deposit by an overlying entity. In the United States, the banking system is backed by FDIC insurance, which guarantees a deposit into an account up to $250,000. This means that if the bank is unable to pay out your account due to overextending the money they get from deposits into risky assets, the FDIC will help by guaranteeing your money and making sure that you get it back despite the individual risk of that bank going under. This was instituted after the major bank runs of the Great Depression and is what allows confidence to keep funds in the bank.

Banks typically carry responsible leverage; however, there have been historical exceptions that have created turbulence in the economy. The subprime mortgage crisis of 2007-08 comes to mind immediately. The checks and balances in the established banking system create a more stable economic force.

This is relevant because crypto is not FDIC insured, meaning that there is no guarantee of deposit of funds on an exchange or brokerage. Customers of FDX, the exchange that went under due to being leveraged too far (among other things), won't be able to claim FDIC insurance and will have to wait for bankruptcy courts to unwind the assets and hopefully get SOME of their money back.

Leverage at the scale of major financial institutions can create serious problems in the economy. Most people aren't heading one of these organizations and aren't going to be in this position. That doesn't mean that there aren't lessons to be learned though. For sake of beating a dead horse, I won't turn this into a rant on self custody of assets.

A big takeaway for individuals is that using leverage is very risky and that purchasing ANYTHING on credit comes with risk. Even something as simple and common as credit cards can really escalate and cause consumers to feel like they're fighting an uphill, if not impossible, battle. Debt can be a bear to overcome. Debt based on leveraging an asset, like a home equity line of credit (HELOC), can be risky if the asset that the loan is based upon (aka the leverage) starts to decrease in value.

Home prices can bottom out and cause serious liquidity crunches (2008 showed us that). It is more common, however, for this to happen with a more volatile asset. When it comes to volatile assets, crypto is at the top of the list. The use of fungible cryptocurrencies to be used as leverage for any type of loan is an extremely risky practice. We've seen enough blowups (Terra/Luna, Three Arrows, Celsius, Voyager, FTX) to know that this type of practice needs to stop AND mirrors what has happened in TradFi.

Moral of the story? Don't get greedy. If you want something, earn the money to pull it off. Be patient. Easier said than done, but that's my $0.02. Hopefully, the next post is a bit more cheery.

Depressivehacks.com & How You Can Help

(Originally published on November 7, 2022)

This post isn't going to be a long, drawn-out ramble like the last one. Instead, I want to call you, dear reader, into action.

Depressive Hacks came about as a concept drawn upon my need for an outlet for my creativity and my love of learning and education. I don't know if I will ever run out of random things I find fascinating to discuss here and I absolutely love that. However, this blog isn't meant to be just a space where I can yell into the void of the internet with more than 140 characters. I want it to be a collaborative and creative learning space for everyone. With that being said, I am officially opening up this platform to anyone who would like to do some type of Q&A about any topic they find fascinating and have expertise in.

Some qualifying rules and regulations. First, it doesn't need to be something you do professionally. It's great that people can take their passions and make them their jobs, but most people have more passions than jobs. If you have worked as a plumber for 20 years and want to discuss tips for rental property owners, that's great. If you're a plumber who wants to talk about your passion for priceless comics and how you feel about the collectibles market as a long-term investment, that's amazing too. The goal is not to pigeonhole you into whatever you feel best fits your resume. In fact, think of this space as a way to expand your resume and show your expertise to the world.

I will maintain the final publication and edits; however, I'm going to give you a chance to triple-check whatever you respond to my questions to make sure that you are completely content with your portrayal. I will even provide a final approval opportunity after I make edits, which will mostly be for grammar, punctuation, formatting, and flow of content.

I am happy to have a discussion with anyone regarding your topic of choice. You may choose to provide your expertise anonymously or as yourself. If you wish to link anything in your post, such as a website for your business or your social media, I am happy to provide you an opportunity to add your links to your Q&A. I will not be charging for these digital interviews and would encourage anyone with a small business, especially in a niche area, to reach out and utilize this platform to the fullest to get some free advertising.

I do maintain final creative rights and I must say that while I am very open-minded about the content of the Q&A discussions, not every topic is going to be a great fit. I will occasionally have to either tell someone to go back to the drawing board or outright reject a topic if it doesn't fit the greater scope of learning and education that I have in mind. I am hoping to keep this to an absolute minimum. Unprofessional topics of discussion would be really the only immediate rejection.

With that being said, DMs on Instagram, Twitter, or email at depressivehacks@gmail.com are all good ways to reach out if you're interested in collaborating for a Q&A. I look forward to launching this structure to the blog and can't wait to work with so many talented people out there!

Nonprofits, NFTs, and a WHOLE Lot of Rambling

(Originally published November 1, 2022)

Alright, so bear with me here. I've been investing for a few years. I went to business school, got an MBA, and have worked in a few different corporations. Just before COVID, I had started trying to allocate some occasional extra money to a TD Ameritrade account. Then, nobody could do anything for months and months. Eventually, my lease ran out and I moved back home for a short time. There, I started putting money away into public stocks and my investing journey was in full swing.

I have zero intentions of talking about specific investments in my blog. If you want that type of content, Twitter is the place to look. I'll happily discuss my holdings and any details. In fact, my whole public stock brokerage portfolio is posted on www.depressivehacks.com in an effort to provide transparency. 

As I began doing more and more research, I started to learn more about alternative investments. I started diversifying into crypto in early 2021 and have just become super interested in what's going on in the space. The technology and innovation are fascinating and I think it is so invigorating to learn more about them. I've thought about writing about the space, which would be so fun, but there are already a lot of great educational tools for people who want to learn. I am currently happy to use my Twitter to provide information that is both valuable and useful.

No, this post is meant to be about nonprofits. The work that these 501C3s do is invaluable in many cases. I have seen some lives changed in my day by the efforts that nonprofits provide around the world. Two nonprofits that I personally donate to or work with, since I can't go a few paragraphs without a good plug, are Kiva and BonaResponds/Positive Ripples. 

There are a lot of different nonprofits out there, both big and small. Most at least start out with donations being the primary means of bringing in revenue to then disburse to whatever they deem as their worthy cause. One thing that has always stood out to me is the limitations of a donation-based model to charity. There is a limitation that exists when there's only one means of income for any entity or even individual person for that matter. Adding an additional revenue stream in case something happens to the first is not only good risk mitigation but can help fuel growth.

Not only does your average nonprofit not have multiple streams of income, but donations aren't a very consistent means of income. It's totally fair that donations remain part of the equation and a sizable one can make a large difference in the impact of the nonprofit's work. However, an additional income stream can not only help advance things that much further in good times, but can keep the wheels turning during times of limited donations as well.

The question becomes how to raise money aside from donations. There are examples of 501C3s creating some type of product to sell. They use the product to generate revenue, cover the expenses of creating the product being sold, and then take the profits and funnel them toward their cause or current project. In fact, today at the grocery store, I purchased some pasta sauce that is manufactured by a church organization that donates all of the proceeds to their charitable arm. This idea is great, but startup costs to create a product offering generates a barrier to entry that many nonprofits can't overcome without either a majorly generous donation or redirecting donation money away from the cause at hand towards product development. This tradeoff is difficult to justify in a nonprofit, even if the long-term outcomes could lead to more revenue to direct the cause down the road.

Where am I going with all of this? I think that there is a huge potential for this barrier to entry to be lowered, especially for smaller nonprofits that aren't swimming in donation money. It's probably evident from the title of this blog post, but NFTs I believe are a great opportunity for nonprofits.

Stick with me for a bit. 501c3s regularly do fundraisers. Plenty of things are done to raise money for charitable organizations. Fundraisers, galas, charity auctions, and golf tournaments are just a few off the top of my head that I can think of. Imagine curating an NFT collection that is made for a charity. Even a small collection of say 10 pieces could be auctioned starting at $100 each. That creates a minimum of $1,000 for the charity, which can be significant for the cause. Hopefully, the auction raises even more than that floor of $1,000.

The big difference is what happens after the auction. The contract for the NFT collection can include royalties for the creator, which in this case, is the 501c3 or a representative of the nonprofit. This means that any time that one of the NFTs originally auctioned off gets resold, a percentage of the proceeds goes to the nonprofit. If a full collection of NFTs were to be launched, that's a resource for secondary sales profits to create a revenue stream for the nonprofit.

I hope to someday actually test this out, as I feel that it would be a beneficial fundraising mechanism with long-term benefits for the 501c3. Thanks for coming to my Ted talk.

Welcome! What Are We Doing Here?

(Originally published on October 23, 2022)

I've often wondered what starting a blog would look like. It was over two years ago that I started researching what blog ownership and creation entail. After much consideration, as well as some key discussions with different connections I have made since launching Depressive Hacks on Twitter and Instagram earlier this year, I finally decided to pull the trigger and launch a blog.

When I first thought about the mission of Depressive Hacks, I had no idea what I was looking to do. When people talk about launching a business or work in general, the phrase "do what you love" is thrown around a lot. I greatly admire anyone who is able to make their passions and their work match up. This is not an easy task and should be applauded. Writing has always come naturally to me and over a year ago, I started writing for hire online. It's now been almost 20 months since I started this process and this is the first thing I have written that is not for a freelance contract for a customer.

It's strange honestly. Every sentence that I write is something that I have full autonomy over publishing in a public setting. I am so excited to write for myself though and to bring an inside look at my journey and all of the different areas that I explore in my life out of interest and passion. I spend so much time learning and acquiring knowledge that I cannot wait to have somewhere to share some of it.

What's exciting is that I can focus the blog on whatever has my attention at the time. I really hope to utilize it to expand the focus of Depressive Hacks, especially when it comes to a broader mission of learning. I came to this idea through the love of spreading information I've learned and the broader goal of doing something productive to preoccupy my time during the winter. As someone who has clinical depression and experiences Seasonal Affective Disorder as well during the upcoming months of the year, I have found that productivity really helps me to get through the winter months.

I have a wide variety of topics that I want to cover and some will likely interest you more than others. Ironically, I've read a bunch of articles about what the best practices are to do in order to scale and grow your blog viewership. I've done enough SEO (search engine optimization) writing for hire to know what's appealing to the algorithms and increases the activity you get from Google and other search engines. In fact, I pay Google for the rights to my domain name, which is a purchase I'm very excited about.

However, I'm currently being pulled in so many directions that the thought of trying to SEO Optimise my own blog for free makes me feel instant nausea. I guess someday if I really needed to try to generate income, I could try to do some of my own SEO writing, but I'd prefer to make a blog for what I want and for my own enjoyment before making a blog with the sole goal of making money. It's important that I try to balance my work with the rest of my life and give myself a lot of leeway going into a difficult period of the year.

So this is the part where I talk a bit more about what to expect going forward since I'm sure if you've come here and you're familiar with Depressive Hacks, you're wondering if every post is going to be like this one. The answer is no. I will add more formatting and structure going forward. Each post will be focused on something specific that I want to write about. The topics will vary greatly but each will be specified within the post title. I am not sure where the first direction will be yet, so we'll see where that goes, but I am excited to have started somewhere and appreciate any early interest at this point. I bless you for reading this and wish you well. 

Let’s Talk About It - Depression

(Originally published October 23, 2022)

As I sit here having decided I want to write about this, I'm still not exactly sure about the end goal. Here is what I know: I have had clinical depression since about 2008. It was most likely earlier than that, but a fairly passive attempt at your own life kind of sticks out to you, even years later, so that's generally where I ballpark things. I can remember walking from school to the babysitter's and just being over everything.

I grew up in a very small town. We didn't get a ton of traffic. There are two main roads that come into town and on this fateful day, there happened to be a semi-truck coming down the road. It was the dead of winter. Absolutely freezing outside. There was this massive vehicle coming my way and I had to cross the street. Any reasonable person could've figured out the timing correctly to cross without any issues. Truthfully, it was the only vehicle I'd seen in a couple minutes anyways. Then, I got this idea: fuck up the crossing on purpose so you cut off the semi. It's freezing out and the roads aren't good. If the semi can't stop in time, then that'll be that. If the jake brakes work, then I still need to be here.

Obviously, you can figure out where things went from there. I don't remember as much from my childhood as I should and it's 100% due to memory suppression. What's interesting about that is that the things I do remember stick out for very strong reasons. I had never played chicken with cars before. I haven't again since this one day.

I could discuss so much more detail about my lived experience, but I'm going to stop there for a few reasons. The first is that I love my family and friends and in the event that anyone I love reads this, I don't need to further break their heart with the level of darkness you get comfortable sitting in after a decade-plus of clinical depression. The second is that I didn't create this blog for the purpose of therapy. I am happy to report that I attend therapy once a week and the ability to talk to someone has become something I appreciate so much more as an adult. I had to go to court-mandated therapy with a psychologist as a teenager and I really hated it. I really hated everything though, so I never gave myself a fair share with psychology. It took another full mental breakdown and more mandated therapy to actually realize that I was wrong.

Instead, I want to talk about why I'm writing all of this very personal information in the first place. For a long time now, I have enjoyed writing. When I go visit my grandma, she still has some of the work I did in school. It's all dark. All of it. At the time, I just thought I was naturally good at writing. It came naturally. My vocabulary was always very solid because my mom made it a point to read to me a whole bunch as a kid. I also knew from trial and error that writing with depth was something I was capable of doing that escaped a lot of my peers at the time. The more I could really hammer home the emotions of my writing, the better grade I would get and the more revered my work would be. Ironically, I could never win an award for my writing in the annual writing contest we had in our county for all the high schools. In hindsight, the prompts just weren't dark enough. I also have some very strong memories of my mom wanting to be a writer. She took classes and worked on the craft all the time when I was a kid. When my parents divorced I stopped hearing about writing professionally, but to this day, she still writes in her journal every morning.

Fast forward many years and I'm in the process of trying to piece together some level of functionality in my life. Everything is difficult. Getting out of bed is difficult. It is extremely difficult to describe what the lowest lows of depression feel like. Unfortunately, most people don't need a description, as life generally hands everyone their ass at least once. So we'll do a quick exercise: remember how you felt at the worst point in your life. Whatever that time was, I am sorry for your experience. My depression and my empathy go hand in hand. I know what that feels like because I have been there. The easiest way to describe the experience of clinical depression is that you're overlooking that cliff of the depths of despair at all times. There could be no feasible reason why you feel so terrible, yet you're looking up from the bottom of that cliff. It doesn't have to make sense. That's what makes it clinical. There doesn't have to be a reason for it. That isn't to say you can't figure out a reason for it. Sometimes there is, sometimes there isn't; sometimes you just feel lost.

I should clarify - this example from the previous paragraph is a few years old. I wouldn't be able to function at the level I do now with everything I have going on if I were in the same space mentally. The reason I bring it up is that in all the time I've spent sitting with myself trying to figure out a way forward, there's always been that voice of empathy in my head. The invention of the internet has meant so much to so many people. The awareness that has been generated for mental health since I was a kid is incredible. It is so nice to know that I am not alone, as none of us are. Everyone struggles with something and even with a clinical condition, there are so many people who know how I feel because they share the same struggle. The empathy in me has always known that I need to do something to reach out and share. I found a lot of peace in music, listening to lyrics from artists who experienced similar things to my lived experience. If my experience can help even one person in the depths of their depression hell, it's worth putting out there for people to see.

I've had a lot of different ideas as to how to do this. Ironically, Depressive Hacks R&D was not made for this purpose. I have a lot of ideas for the future of DHR&D. This isn't about that. This is about trying to do something to help someone.

I've always wanted to write a book. Hopefully, someday, I will accomplish that. I've always thought that depression would somehow make its way into the book if I decide to write realistic fiction. I struggle with the genre; I don't like labels. I've also thought about making some other creative production about it. Creativity really seems to help. Music always has helped. Writing now helps too. There's something about it that is both therapeutic and humanizing.

Sharing my experience is the first time I've ever written about my depression in a structured setting. After years of thinking about it, I felt it was important to do it. Even if it isn't in the medium or format I'd always dreamed of, I'm still accomplishing a long-time goal the moment I hit publish on this blog post. That's good enough for me. Maybe someone reads this and feels less alone. That'd be an extra bonus. This post is for me, and for you, dear depressive reader, when you find yourself feeling the darkness close in with nowhere to run. You aren't alone. For everyone else who has their own battles to fight that aren't clinical depression, know you aren't alone in that either. We are stronger together. Hopefully, you gained some insight from reading this that you didn't have before. Hopefully, you learned something. That's the whole point here at Depressive Hacks R&D. Thanks for your time; bless you, dear reader.