This Organization Is 13052958 Canadian Non-profit
This Organization Is 13052958 Canadian Non-profit
That Educates And Empowers Individuals & Entrepreneurs With Financial Literacy & Resources
That Educates And Empowers Individuals & Entrepreneurs With Financial Literacy & Resources
Email: linktechfoundation@gmail.com
Email: linktechfoundation@gmail.com
LINKTECH FOUNDATION
LINKTECH FOUNDATION
This Organization Is 13052958 Canadian Non-profit
This Organization Is 13052958 Canadian Non-profit
That Educates And Empowers Individuals & Entrepreneurs With Financial Literacy & Resources
That Educates And Empowers Individuals & Entrepreneurs With Financial Literacy & Resources
Email: linktechfoundation@gmail.com
Email: linktechfoundation@gmail.com
WELCOME TO OUR BLOG
WELCOME TO OUR BLOG
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Bookmark This Page For Future Articles
HOW BANKS WORK
HOW BANKS WORK
Ever heard of Fractional Reserve Banking? Let me just start out by saying that the form of banking we have today is far from the original intention of a bank. Fractional Reserve Banking is when the banks are only lawfully required to keep a percentage of the funds deposited on hand and can lend out the remaining portion, basically creating money out of thin air.
Let me give you an example: John walks into his bank and deposits his $1000 paycheck. Now Mike walks into the bank and he needs a loan; the bank will now take $900 of John's paycheck and give it to Mike as a loan. You might say, what is wrong with that? Well, let's take a look on paper at what is going on.
What does John's bank balance read? $1000
What does Mike's bank balance read? $900
What if John and Mike go to the bank and ask for all of their money??? If everyone did this, and if there is ever a run on the banks, the big facade would all come crashing down.
So you take your hard earned money to the bank and then they turn around and loan that money to someone else, and charge interest! How much are they paying you to use your money? The answer is probably zero but you might be lucky to be earning maybe 1%, but I doubt it.
Now obviously this is just a small sample of how Fractional Reserve Banking works, if you want more in depth information I can recommend a few books that are fantastic.
Ever heard of Fractional Reserve Banking? Let me just start out by saying that the form of banking we have today is far from the original intention of a bank. Fractional Reserve Banking is when the banks are only lawfully required to keep a percentage of the funds deposited on hand and can lend out the remaining portion, basically creating money out of thin air.
Let me give you an example: John walks into his bank and deposits his $1000 paycheck. Now Mike walks into the bank and he needs a loan; the bank will now take $900 of John's paycheck and give it to Mike as a loan. You might say, what is wrong with that? Well, let's take a look on paper at what is going on.
What does John's bank balance read? $1000
What does Mike's bank balance read? $900
What if John and Mike go to the bank and ask for all of their money??? If everyone did this, and if there is ever a run on the banks, the big facade would all come crashing down.
So you take your hard earned money to the bank and then they turn around and loan that money to someone else, and charge interest! How much are they paying you to use your money? The answer is probably zero but you might be lucky to be earning maybe 1%, but I doubt it.
Now obviously this is just a small sample of how Fractional Reserve Banking works, if you want more in depth information I can recommend a few books that are fantastic.
Why Is It Important To Learn How Banks Work and Why Is It The First Thing We Talk About In Our Financial Literacy Course?
Why Is It Important To Learn How Banks Work and Why Is It The First Thing We Talk About In Our Financial Literacy Course?
Two main reasons why this topic is right in the beginning of our education.
1. First, you must understand how the money game works if you want to play to win. One key thing to take from how the Fractional Reserve Baking works is this: The banks are using money in two different places, at the same time. That gives them a HUGE advantage over all other entities, including the people. With this is mind we went on a journey to see if we could find any financial product that allows you to use your money, in two different places at the same time. Contact us now to learn what we found in our journey.
2. Like I mentioned earlier, the banks use your money to make money. The first things the banks figured out how to do was to earn interest, and after being a lifetime entrepreneur and seeker of the secrets to becoming wealthy, this is the number 1 thing you must do to become financially free. Let me say that again, getting your money working for you is imperative and must be on the top of your financial to do list. Most people fall into the trap of buying liabilities and their isn't much money left over to invest, or options to have money working for them. In our courses we teach you an old school way to get your money working for you and yet, you still have the ability to use the money for your bills, food and all other things you spend your money on now.
One of the greatest minds of all time Albert Einstein, has a famous quote about interest:
Two main reasons why this topic is right in the beginning of our education.
1. First, you must understand how the money game works if you want to play to win. One key thing to take from how the Fractional Reserve Baking works is this: The banks are using money in two different places, at the same time. That gives them a HUGE advantage over all other entities, including the people. With this is mind we went on a journey to see if we could find any financial product that allows you to use your money, in two different places at the same time. Contact us now to learn what we found in our journey.
2. Like I mentioned earlier, the banks use your money to make money. The first things the banks figured out how to do was to earn interest, and after being a lifetime entrepreneur and seeker of the secrets to becoming wealthy, this is the number 1 thing you must do to become financially free. Let me say that again, getting your money working for you is imperative and must be on the top of your financial to do list. Most people fall into the trap of buying liabilities and their isn't much money left over to invest, or options to have money working for them. In our courses we teach you an old school way to get your money working for you and yet, you still have the ability to use the money for your bills, food and all other things you spend your money on now.
One of the greatest minds of all time Albert Einstein, has a famous quote about interest:
“Compound interest is the eighth wonder of the world. He who understands it, earns it...he who doesn't...pays it.”
“Compound interest is the eighth wonder of the world. He who understands it, earns it...he who doesn't...pays it.”
We have a passion for financial education and literacy. With these simple course we have put together, we strongly believe everyone will have a fighting chance to achieving their financial goals. Once you are in a better financial place, you can start to do what you are passionate about and really make a difference. We weren't designed to be a slave to a job that we aren't passionate about, take these few fundamental steps we teach you and you will surely see a light at the end of the tunnel.
We have a passion for financial education and literacy. With these simple course we have put together, we strongly believe everyone will have a fighting chance to achieving their financial goals. Once you are in a better financial place, you can start to do what you are passionate about and really make a difference. We weren't designed to be a slave to a job that we aren't passionate about, take these few fundamental steps we teach you and you will surely see a light at the end of the tunnel.
