It's not the 1940s. You don't have to type up a 10 page business plan, put on a suit, and meet with Mr. Potter sitting behind his desk at the Bank & Trust. It's entirely possible that an AI might offer somebody with $15k annual income a loan simply on the basis of detecting that he regularly posts on this forum
You are correct, one does not need to do those things. An AI algorithm will likely be happy to make a loan to someone with a high default risk if it can 1)assemble said loan into a portfolio of other loans 2) Charge a high enough interest rate 3) Package these loans into a product to sell to a person/institution chasing yield.
But, that still leaves the OP in debt paying a high interest rate. That places a high hurdle to jump over to reach profitability. Better to pursue the micro businesses you mentioned as they can all be boot strapped from existing cash flows. However, I don't know how resilient it is to have a small number of micro-businesses with low barriers to entry that offer services that are highly discretionary. I imagine dog walking, math worksheets, and organic lawn care could dry up very quickly when people tightened their belts.
frugaldoc wrote: However, I don't know how resilient it is to have a small number of micro-businesses with low barriers to entry that offer services that are highly discretionary. I imagine dog walking, math worksheets, and organic lawn care could dry up very quickly when people tightened their belts.
Yes, I generally agree. That's why I noted above that it is important to keep track of hidden dependencies. Of course, the stock market results will also suffer during depressionary period, but that is theoretically baked into the cake of 3/4% SWR. So, for instance, one could plan to rapidly shift from breeding angora rabbits for luxury hobbyist market to raising another breed for survivalist meat market. Also, in particular, I have found the book/educational market in which math worksheets would fall to be pretty steady in variety of market conditions, because largely publicly funded, and worksheets would be DIY very inexpensive option vs. hiring a tutor.
You have to want to have some hustle at the margin for this solution to work for you. It's not set and forget.
