Other People's Money (OPM)

What is Other People's Money (OPM)?

These are funds borrowed from other sources for you to use. Also known as credit.

What are The Sources of Other People's Money?

Sources of OPM include:

These sources are the cashflow surpluses of individuals, companies and governments.


Credit loans do not include grants, gifts or donations as these funds are given to you. Be aware though that these funds may have conditions attached on how you use the funds, otherwise they be converted to a loan.

Credit Must Be Repaid

Financial services organisations like banks earn their profit by lending other people's money to individuals and organisations that require it, with the profit coming from the interest they charge minus what they must pay to the original owners of the money.


Credit loans require you to repay the money borrowed via an agreed schedule of repayments. People and organisations typically lend to provide a return on investment - not doing so would see their stored money erode over time due to inflation. A schedule of repayments allows them to structure and manage their cashflow.

Credit is Beneficial If the Returns Are Greater than the Loan

Only borrow OPM if you are fairly certain that the money will produce a Return on Investment which is greater than the total cost of the credit, that is the amount borrowed plus total interest. For example borrowing to buy a depreciating asset like a car is not a good idea. But if that car is to be used as a taxi and will return 5 times the money borrowed then this would be a good use of OPM.