People with Capital

Most people live hand to mouth. All companies need capital to run their businesses. They can’t just rely on the equivalent of the work and pay-check cycle of employment. Some clients sign contracts, and great businesses have a way of developing sufficient client loyalty that they have a predictable stream of income. There are Capital light businesses but even they need enough Capital to pay the people involved. The payroll is the list of employees and how much they have to be paid. When things go badly, you still need to pay the staff if you want them to stay. No matter how good the business idea, the business needs a war chest that can get them through the challenging periods. The only thing that is certain is challenging periods. That is why so many businesses fail. A good business idea isn’t sufficient. Investing is about risk management as much as it is about creativity. The idea that people can live hand to mouth is an illusion whose time has passed. Risk management should start from the bottom up. With people, with capital.

Creating Space

A consequence of the 2008 Crisis was an increased focus on Stress Testing and Capital Adequacy requirements for banks. We learn from mistakes. Trial and Error. If we survive. One of the advantages of being conscious humans is we don’t have to make the mistakes ourselves, if we pay attention. Attention is available to those who aren’t too busy. Those who create space. The 2020 Crisis has highlighted the dangers of living in a hand-to-mouth world where the majority of people and businesses have insufficient Capital to pause. If the show doesn’t go on, and there is no buffer, we suffer. However we finance it, the need for a Universal Basic Income and sufficient Capital for individuals and businesses to survive stress is self-evident. Yes, we should work for the things we want. We should also build a world with a strong enough foundation to take a deep breath and count to ten. A strong enough foundation for our creativity to survive, adapt, adjust, and accommodate to a volatile world.

Creating the Space to Pause