In business, finance, and entrepreneurship, you may have heard the term OPM thrown around—especially in conversations about investing, real estate, or building a business. But what does it actually mean?
OPM stands for “Other People’s Money.” It refers to the strategy of using money that is not your own to fund ventures, make investments, or grow a business. Instead of risking your own capital, you leverage external sources whether it be from banks, investors, government grants, crowdfunding, or even credit.
Entrepreneurs and seasoned investors often use OPM as a way to scale their operations faster and reduce personal financial risk. The idea is simple, if someone else is willing to provide the capital, and you have the knowledge, skills, or opportunity to turn that capital into profit, both parties benefit. It’s a mindset shift, from asking “How much money do I need to start?” to “Whose money can I use to get this started?”
The concept of OPM is particularly powerful in real estate and private equity, where entire projects are built on borrowed funds. It’s also commonly used by startup founders who raise funding rounds to build out their vision before they’ve even turned a profit.
The Most Common Form of OPM? Your Home Loan.
While OPM might sound like a high-level investment concept, the truth is most people are already using it—every time they take out a home loan.
A bond, or home loan, is one of the most accessible and widely used forms of OPM. When you buy a property with a bond, you’re not paying the full purchase price from your own pocket—you’re using the bank’s money to secure the asset. You put down a deposit, and the bank covers the rest. In return, you repay that loan over time with interest. But here’s the key: the property is appreciating in value (ideally), generating income if rented out, and being paid off incrementally, often using other people’s money once again—like your tenant’s rent.
Now take that one step further, an access bond. This feature allows you to access any additional payments you’ve made into your home loan over and above the required monthly instalment. It functions like a flexible credit facility, but at your bond’s interest rate—often far cheaper than any personal loan or credit card.
At the time of writing, South Africa’s prime lending rate sits around 11%, while personal loans can climb to 28% and credit card debt even higher. That makes your bond—and especially your access bond—the cheapest money you can get.
And what makes that possible? OPM.
By borrowing against your property using the bank’s money, you’ve already taken advantage of one of the most powerful principles in business and finance. You’ve used OPM to gain an asset, increase your net worth, and access capital at a fraction of what other credit lines would charge you. It’s not just a loan—it’s a tool.
And once you understand that OPM doesn’t always mean high-stakes investing or startup capital, but can be as simple as your home loan, the concept becomes far more accessible—and a lot more powerful.
Why Would Someone Give You Their Money?
It’s a fair question. Why would anyone willingly hand over their hard-earned cash to someone else, especially for a venture that hasn’t been proven yet?
The answer lies in one simple, unavoidable truth, if you’re not investing your money, you’re losing it.
Money that sits still—whether it’s in a savings account or under a mattress—your money is losing its value. Every year, the cost of goods and services increases, and unless your money is growing at a rate equal to or higher than that inflation rate, it’s losing value. What R100 could buy five years ago won’t get you nearly as far today. And that trend continues, year after year.
Because of this, smart individuals are always looking for opportunities to grow their money. They’re trying to beat inflation, protect their purchasing power, and secure their financial future. This is where entrepreneurs come in.
If you have a compelling idea, a solid plan, and the drive to execute it, investors see a chance to put their stagnant money to work. They’re not just doing it to help you—they’re doing it because they see the potential for return. And ideally, a return that’s higher than inflation, giving their capital not only safety, but growth.
That’s the beauty of OPM—it’s not charity, and it’s not a handout. It’s a mutual exchange of value. You bring the vision, the execution, the business. They bring the capital, looking for returns that traditional investments can’t offer. When it works, everyone wins.
In a high-inflation economy like South Africa, this logic is even more pressing. Investors are actively seeking places to park their capital where it won’t just survive—but grow. If you can present an opportunity that offers strong upside, backed by a clear plan and a committed team, there’s a high chance someone out there is willing to bet on you.
