I think I have an unconventional or unique take on money lending and this post is an effort to tell the story of how I got to this way of thinking about it.

• What's debt?
• What's money?
• How do you create money?
• What is the value of a sound human promise to repay?
• My personal experience with human promises to repay
• Lending in Thailand

What's debt?

The conventional view is the one everyone already knows.

1. You get a job
2. You have a steady income
3. You buy things above what you make and take on debt
4. You make monthly payments on that debt
5. Your creditors report your payment record to credit bureaus
6. Credit bureaus establish a file on you and issue a score
7. You use that score to get more and better things above what you make, and take on even more debt

What you may not fully understand is that most money is made in the lending industry from those always hanging on by the skin of their teeth.

Those who use credit judiciously? They're like the 99 cents ham & eggs at a casino or the gas pumps in front of a convenience store—loss leaders. If you don't already understand what a loss leader is, that's when a business sells something attractive at break even or even a loss, in order to boost the number of customers passing through, and some will be enticed toward the high-profit margin stuff.

Yep, you only paid 99 cents for your ham & eggs, but then you dropped $20 in the casino on the way out. You got the cheapest gas in town, then loaded up with junk food at a 300% profit margin. You get the idea. All simple stuff that everyone's aware of.

Fundamentally: debt is a product you buy.

Where is the nuance? There's lots and some not so obvious. So here we go. This debt thing get's revisited with a surprise.