Thursday was a special day because our little boy turned 7.

One night after dinner, my wife Annie and I found ourselves tidying up the kitchen and chatting about how fast our children were growing up. “Could you believe Pauly is turning 7?” Annie smiled at me and said, “yeah, crazy, eh?” “He’s 7 today, 17 tomorrow, 27 the next day, 37…” and before I could even finish my sentence, Annie abruptly shouts “could you shut up?!” We both laughed and I got the point and a friendly reminder to live in the moment.

In addition to birthday celebrations, it seems the stock market is also in a celebratory mood as many new companies have gone public or in the process of going public in 2021. For clarification purposes, going public means listing your company on a stock exchange and #raising capital through investors via share purchases.

What I always found interesting is that companies are not obligated to go public and have complete control on their entry point. In other words, if the demand for stocks in general is low, chances are you are going to see less #privately held companies list on public exchanges. Conversely, if there is an appetite for stocks you could see a higher volume of new companies entering the public markets. It seems that 2021 could be a big year for companies choosing to go public including Affirm Holdings Inc. (#AFRM) that when public on Wednesday.

What is Affirm?

#Affirm is a company that helps consumers pay for the purchases they make online by offering monthly payments on pretty much anything from home and #lifestyle, #fashion, #fitness and more. Affirm helps consumers choose a #payment #schedule that works for them by amortizing their payment over 3,6 or 12 months and charging a 15% interest. The concept behind a shorter amortizing payment period and full transparency is that it allows the consumer to fully understand the total cost of their “want” before they actually buy. In my opinion, there is a difference between choosing a 12-month payment schedule including the total interest involved than to dump the purchase on your credit card and have the temptation to just pay the interest if things are tight that month.

How does Affirm make money?

Say your 17-year-old son needs a new MacBook but you cannot afford the $3,000 upfront price tag. Before Affirm existed, you would slap down your credit card and amortized the payments monthly with an interest rate of 11% to 19% or more depending on your credit situation. Suddenly, you find yourself paying $4,000 for a $3,000 laptop and that is if you’re lucky. Some consumers either take years to pay off such items or carry the debt indefinitely until they throw in the towel and file bankruptcy. For some consumers, parents, or bachelors and bachelorettes, this is a familiar situation where its easier to buy things on credit than cash. According to the Government of Canada, 140,858 insolvencies were filed with the Office of the #Superintendent of Bankruptcy (OSB) in 2019.

Affirm has taken notice of this global trend and have built a business model that helps companies like Apple sell more #MacBooks while at the same time helping consumers avoid being in debt for the rest of their lives. Win-Win. If you visit The Bay online and pretend shop you will notice you can now buy things over a monthly payment plan with #PayBright. Affirm purchased PayBright in 2020.

What is this week’s takeaway?

Besides the fact children will grow up regardless if you want them to or not, many publicly traded companies that once focused their efforts on making money for investors are now focused on making a positive difference for society.

This win-win attitude is exactly what the world needs today.

Talk soon,

Michael