[FoRK] Credit

Stephen D. Williams sdw at lig.net
Thu Dec 16 17:12:15 PST 2004

Capital of all kinds is a luxury.  Most people start with none and 
struggle to build any unless they happen not to have a family, are lean 
with their spending, and are competitive as earners.  Intellectual/skill 
capital is easier and more effective to build on the front end.  Credit 
is "trust capital" and also has to be built.  Trust capital depends on 
and adds to skill capital and allows for up-front conversion to money 

Capital has a definite limit.  Credit has a somewhat more elastic 
although capricious limit.  Skill is an annuity that often keeps 
appreciating capital.

Depending on the nature of bad times, either capital or credit could be 
better.  Interestingly, if you are reasonably good at 'putting your 
money to work', it would be likely that you would have far more credit 
than capital available in an emergency.  While it might be reasonable to 
keep $1000-20,000 around for emergencies, you would be a bit wacky to 
keep $200,000 around earning $1.5% interest or whatever.  You'd be 
better off buying a McDonalds franchise or something.


Dave Long wrote:

> ...
>:: :: ::
>Capital and no credit gets one through bad
>times better than credit and no capital.

swilliams at hpti.com http://www.hpti.com Per: sdw at lig.net http://sdw.st
Stephen D. Williams 703-724-0118W 703-995-0407Fax 20147-4622 AIM: sdw

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