Does OPM give you a High ?

First, OPM is an abbreviation which stands for Other People's Money. It should be pronounced like a narcotic drug " Opium" which is supposedly known for giving its users a " High" and also known for its rather dangerously addictive nature.

Coming back to OPM. What you do with other people's money distinguishes and decides whether you will become rich or poor in life. Firstly, taking OPM from the market has got its associated cost(interest) that must be paid back along with the principal amount after a certain period of time. The longer the delay in repayment, the more is the amount that gets repaid and hence, the happier the lender.

In most cases, poor people spend OPM on frivolous value destroying activities(VDA). Hence, they need to struggle more at work in order to honor their financial commitments. I should actually put it the other way. People who spend OPM on VDA can be rightly branded as poor(although, they may not be so technically from a financial point of view).

Rich people on the other hand take OPM and invest it in value generating activities(VGA). Hence, the corresponding effort that they need to make to repay becomes significantly less. Yes, there is definitely an added pressure to squeeze more returns than what they need to repay back their creditors, so that, their profits are as high as possible. The more credit-worthy they become over a period of time, the more is the power they wield to swing lower interest rates and it becomes a positive feedback loop creating wealth in the process. In short, its a case of money making more money.

Its all about Money, Honey....