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Credit vs Risk, Round 1

  • Jan 22, 2010
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Risk Management: Investing & Credit & The World of Finance 

Risk is inherent in the act of living. It is something we take as soon as we arrived on this planet. We took in our first breath on that fateful day in a planet where germs dwell. Our bodies adjus to foreign invasion and we thrive when we won. These are battles we take everyday and we think nothing of it. We learn to walk by falling, we take steps to build our muscles and bones. We ride the bike and we think nothing of accidents when we were having fun. 
Then those who are lucky grew to adulthood and all of a sudden, we learn the word risk and we try to minimize it, to control it, to take charge instead of to overcome the fear of it. Yes, we begin to learn to fear. And that’s when we became not so great afterall.
Those of us (the very few) who are fearless become some of the greatest person we have all heard about. Be it in the arts, in the financial world or in the IT arenas. They become role models while in privacy we still try to minimize risks and even avoid it as much as we can. They sky dive, they scuba dive and they fly.
The contradictions of life and hence, we become just ordinary people trying to survive our daily routine of mundane jobs which we are neither inspired nor like. We live our lives of dread/drudgery.
And in doing so, we have less to offer our next generation & ourselves.
It’s a world of credit we had created for our own ambitious acquisition in the last century or so. Since banks have been set up and monies have been printed, credit is a word one should get used to and even make full use of. Otherwise you fall behind the society and you ended up at the losing end, because now we have something known as inflation and stagflation. Debtors win in most cases. Without debt, no graduate of any school is able to buy a home, much less set up a business. It may not be the banks you owe to, it is still some form of credit, either from friends and families, your own savings from childhood or if you are brilliant, from the stock market or venture capitalists. Either one of these shall be your sources of fund. With funding, you can have some fun in this world of ours. Otherwise, you ended up slaving for others who managed to find the fund & fun ;-)
To attract something to you, you have to like it to begin with. That’s a law or rule of thumb. That’s what I believe anyhow. You don’t like money, then you are not going to see much of it. Same as if you don’t like others making the money, neither will you find the ways to making the money! As simple as that. It’s like I don’t even like writing, but I’m writing a lot more than many people in this world (perhaps that’s why it’s for free and I’m not being paid for it! Ooops!!!). LOL...

The Approach
So, we may vent away or we may dream away. Either way, it’s up to you to choose.
What am I writing about anyway? & why am I writing about it?
Oh yes, credit and risk.
The Approach? Take the risk, take the credit. Then manage it well. The problem doesn’t arise from credit or risk. It is from MANAGEMENT. Yes, be it credit or risk management. That’s something every bankers and business owners know about and are familiar with it. They look at it everyday or else it’ll reflect back to them in quantum leaps one fine day. It won’t take long either. Bankers and shareholders have a way of sticking around to haunt . And if one can’t perform, someone else will! That’s the reality of life, unfortunately for us all adults!

Social Implications
So, you think you can handle credit and risk? Well, may not be as well as you think you could. Society for some reasons, especially the Asian societies, abhor risk and credit. I know, I live in one for many years. Talk about buying homes or stocks with borrowed money? Your family dreads it, especially your parents (the last generation who are not accustomed to enjoy life until they have slogged it away, that is ;-)) and your friends. If you made it with your risk management, your friends may no longer be your friends as they dread you for succeeding in doing something they are afraid to do so. Hence, you are a reminder of their failures. No kidding! And many whom you may not even know or have talked to before (like your colleagues or whoever that comes and goes in the office) will be looking out for your downfall! Trust me, I know what I’m talking about. & I’ve seen that happened in the office before! People, they are even envious of the trips I take! Imagine if you own some kind of palace or jet! That will be the end of you and your friends! You then need to move up the rank and make new social contacts! OMG, life is not great even when you manage to handle it right, is it? ;-) [Remember Desperate Housewives, the TV drama? Now you get it, don't you? :-)]


Your Way, My Way or Everyone’s Way
Now then, is there a way or is it a case of your way, my way or everyone’s way?
Risk/Credit… take it or leave it? Survive with it or survive without it? What’s the balance?
Is there a system? After Oct. 2008, what’s the deal?
Hey, I don’t have the answer ;-) I’m not paid to find an answer to it. I can’t stop myself thinking and blabbing here… but truly, I’m not paid to find an answer to it! Hurray!
Thank you for taking your precious time to read this. Whatever I choose to write and focus on, it’s something I hope will be thought provoking. We are all adults and this is an American site. It is not through spoon feeding that one thrives/advances in life. And I hope it is a case of one thing leads to another. That somewhere along the line, some genius finds a way to the solution. Me? I’m just a conduit ;-) Part of the process. Irrelevant? Perhaps not. The answer to the problem? Definitely no! Should anyone of you has one, please share :-)

Credit vs Risk, Round 1 Credit vs Risk, Round 1

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January 26, 2010
when I was about very young I made some mistakes and I messed up my credit. I repaired the damage by stopping all credit usage for 4 years and I caught up. Good thing I can teleport to any place in the world now, so I don't have to pay airline tix. LOL Nice write up.
More Credit (finance) reviews
Quick Tip by . January 24, 2010
It's still what makes the whole world goes around, despite the 2008 financial disaster, nothing has changed much!
About the reviewer
Sharrie ()
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I'm a traveler at heart & have been nicknamed Travel Queen by friends & colleagues alike. Traveling has been my life passion for the last decade or so. As we enter a new decade, I'm excited … more
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Credit is the provision of resources (such as granting a loan) by one party to another party where that second party does not reimburse the first party immediately, thereby generating a debt, and instead arranges either to repay or return those resources (or material(s) of equal value) at a later date. It is any form of deferred payment.[1] The first party is called a creditor, also known as a lender, while the second party is called a debtor, also known as a borrower.

Movements of financial capital are normally dependent on either credit or equity transfers. Credit is in turn dependent on the reputation or creditworthiness of the entity which takes responsibility for the funds.

Credit need not necessarily be based on formal monetary systems. The credit concept can be applied in barter economies based on the direct exchange of goods and services, and some would go so far as to suggest that the true nature of money is best described as a representation of the credit-debt relationships that exist in society (Ingham 2004 p.12-19).

Credit is denominated by a unit of account. Unlike money (by a strict definition), credit itself cannot act as a unit of account. However, many forms of credit can readily act as a medium of exchange. As such, various forms of credit are frequently referred to as money and are included in estimates of the money supply.

Credit is also traded in...

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