MOXIE MOM on Life & Kids
Banker Boy
Yesterday, Ty told me he plans to open a bank for his friends. As in at our house. Presumably in his room.
“Really,” I said. “And why would your friends want to bank with you? What will you offer?”
“I’m going to charge them a fee to deposit their money, like, a dollar per ten dollars. And then they will earn interest. The more they invest, the more they earn. Say, two dollars a month every month. Doesn’t that sound like a good idea?”
His plan was quite a bit more complicated than how I just summed it up, but I couldn’t keep all the fees and benefits straight. There were quite a few. Ty was quite excited about the loan service he plans to offer, as well as the fees he might earn if his friends didn’t pay back the loan in good time. Personally, I can’t help thinking his friends are going to lose out.
“What happens if all your friends want to withdraw their money all at once?” I asked.
“Well, they can’t just do that. I mean, you would never get everyone going to bank to withdraw all their money.”
“But if I wanted to empty our savings account, I could do that. I could go to the bank and take all the money out.”
“But that’s because they have lots of people’s money and they have enough to cover your savings.”
“Right, but what if all your friends want all their money at once? That’s what happened during the stock market crash at the beginning of the Great Depression.”
“Really? What are stocks exactly, anyway?”
And that was the beginning of another conversation.
I hope he forgets about the bank.
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