Grumpy Old Man #2: Integrity matters

Bottom line up front: Don't ever give anyone any reason to question your integrity.

I didn't get any hate mail on "Grumpy Old Man #1", so we'll keep this going for a bit and see what happens.

Back in my mortgage banking days, I was visiting bank branches and talking to retail bankers about how we could make them more effective with home equity loans and lines of credit. One banker asked me if we could do more for their self-employed/small business customers.

"They are great customers with plenty of income, but they take a lot of it in cash so it doesn't show up on their tax returns. We can't get them approved for a loan because their tax return income is too low. Can we do anything for them?"

My response was short and succinct. "If they're willing to lie to the government, what makes you think they aren't willing to lie to you?"

I've been reminded of this a few times when speaking with searchers looking for investors. Some have run into the problem above with sellers and I advise them to only buy what they can prove. However, I've also had a few pitches from searchers where they very clearly stated how part of their value thesis was in not following the rules. Some were hidden loans disguised as equity, some were planning on hiding cash flow from taxes, some were hiding material business issues from their banker. All of them had one thing in common, they were clearly demonstrating an intent to be less than honest in their business dealings and find ways to bypass the rules.

They all got the exact same response from me - a very firm no. If they're willing to lie to the government or their banker, then why should I believe they wouldn't be willing to lie to me?

Lots of people believe rules exist for others and that their brainpower or skill means the rules aren't applicable to them. This is another of the FAA's identified "Hazardous Attitudes" (Anti-authority) and in the aviation sphere is a good way to turn you and your passengers into a big smoking hole. Being less than honest and forthright in your business dealings is a good way to turn your business into a big smoking hole and yourself into a guest of your state or national penal authorities.

Integrity matters.