Risk Tolerance

I grew up with the expression, "too poor to pay attention".  This is a kind of tongue-in-cheek expression to describe people burdened by poverty.  Life for many is about survival and getting from month to month.  People in these circumstances are so busy getting through today, that there is no time left to think about tomorrow (their future).

The next step up this ladder is people with little to no risk tolerance due to their budgets being so tight that they can't afford to "play around" with any risks.  In other words, they have to pay their bills.  They go to work to make it so.  And this cycle repeats itself over and over and over - in many cases for entire lifetimes.

Given this reality, there are really two perspectives as they relate to what we do:

1. These people are simply not a match for what we do.  They are better off keeping on the path they are on because they literally can not afford to take a risk.  What we do is not for everyone, and this is a major reason, among many others.
2. Of this group, if credit is available to do so, they can borrow money and pay it back in increments out of revenue generated by our business, over time.

This is the OPM (Other People's Money) approach.  Yes, it requires people to assume debt and this is precisely why it requires risk tolerance.  People are taking the risk of borrowing money and assuming the additional risk that they can make our business work for themselves.

Credit used in this manner can do great things in getting people started.  It is an initial step that gets people in the game.  Our role is to help people assess if borrowing money to get into business with us makes sense for them.