THE IRISH ECONOMICS LESSON
OF MY GRANDFATHER TOM COLLINS
By T. J. Birkenmeier
My Irish grandfather, Thomas E. Collins once called me to
sit on his lap when I was a small boy. He asked, “Tommy my dear namesake, when you grow up, would you rather have a million
dollars or a million friends?”
Without hesitation and with all the naïve confidence and
exuberance of my youth,
I replied, “Grandpa
I’d like to have a million dollars.”
He smiled warmly at me and then sharply knuckled my head
with his 18k gold pinkie ring.
“Ow-wow! Grandpa that hurt!”
“Tommy boy, that was
just a little ‘Irish exclamation point’ to help you remember that the right
answer is this…you would always rather have a million friends than a million
dollars.”
“Why Grandpa?
“Listen carefully and
never forget what I’m about to tell you.”
I was all ears…focusing on his deep blue Irish eyes.
“If you have a million
friends you can borrow $5.00 from each one of them.
That will give you $5
million dollars.”
I liked what I was hearing so far.
“Then you take the $5
million and put $1 million in each of five different banks, but don’t make a
big show about doing it.
“Now listen carefully,
this is very important. When you put the money in each bank, do it very privately
with the bank president only and intimate that there is more where this comes
from if he’ll pay up a bit on the interest rate from 5% to 5.25%
“Tell him those 25-basis
points could be the basis for a very good long term relationship. He’ll think
you understand banking. Then sit quietly saying nothing, but glancing at your
watch as if you have someplace to go.”
“What will the banker do then Grandpa?”“In about 43.5 seconds
he’ll smile and say, Mr. Collins, I think we can do that if you’ll keep your
money here for at least 2-years in one of our time deposit products. If you
could go to three years, we’d pay up an additional 25-basis point to 5.5%
“Then you wait for
exactly 73.2 seconds, act like you are a deliberate and considerate thinker –
be careful here though, you don’t want to be making him think you’re
slow-witted. So timing is always important.
“Then say, I think I
can do that, but I’ll need a liquidity clause or a line of credit that will
allow me to borrow out up to 50% against my deposited principal and I’d like
that at prime rate, since I’ll be one of your best secured depositors and
you’ll be holding 100% collateral.
"Naturally, should I
go into the line, I would expect the bank to suspend the payment of interest on
the balance deposited in my account as on offset against the favorable prime
rate loan on the $500,000 until it is repaid. That will sound simultaneously
stupid and very generous to the banker.”
“Are you with me so
far Lad?”
He could tell I was more than a bit lost.
“Don’t worry, I’ll
write it all down for you and we’ll practice it.”
“You do that in 4 out
of the 5 banks. You now have 4 accounts of $1 million each earning
5.5% for 3 years and
you have 4 Lines Of Credit of $500,000 each for a total of $2,000,000 at prime.
“You also have
$1,000,000 in bank five – this is your liquidity account and it pays 5.00% per
year. This is also your “Carrot Account” to ensure great service from this bank
and the other 4 banks.
“You can always say,
‘I’m thinking about moving this million over at First National to Boatmen’s or
to Southside National Bank or to Bank Of St. Louis...or to your bank. Or vice versa.’ Then wink and laugh.
“Then what happens Grandpa?”
“You are now an
important customer to 5-banks, that means you get at least 60-free lunches a
year, 5 Christmas party invitations and 5 turkeys at Thanksgiving and 5 hams at
Easter- all given free of charge as gestures of their appreciation for your
continued business. Be sure to spread this tribute around with the nuns, parish
priest, extended family and selected friends.
“Plus you’ll get
invited to baseball games, boxing matches, golf outings, The Muny Opera, trips
to Hot Springs, the Kentucky Derby and all kinds of Charity Balls as their
guest. Those are the fringe benefits. By being seen at all the charity balls,
people will assume that you are a benefactor. If anyone asks, ‘Are you listed
as a sponsor, donor or underwriter?’
“Just say, ‘I prefer to give anonymously.’
“There is always an
Anonymous name at the top of the contributor list. If that person is so well
off that they don’t need to take the credit, someone who can use the boost
should get it.
What about the money?
“The 5.25% on the $4
million produces $210,000 per year. You live off of half of that leaving
$105,000 to use to buy drinks for your friends or to repay the $5.00 to any of
the people who ask for it. The 5% on the last million produces another $50,000.
Use that money to support charities and make small loans to other people in a
pinch.
“Remember you owe
$5,000,000 to 1,000,000 people. But human nature being what it is means that
half of ‘em will forget that they ever lent you the money in the first place; half of ‘em will say, ‘Tom forget about that
$5.00 you owe me, you bought the last round,’ the other half will expect
payment at sometime – so always carry about $500.00 in opportunity cash with
you, but never flash money - keep most of the cash in your front pocket, never show
more than 3-fives and 2-tens and keep that money on a clip with a rubber band
around it.”
“Grandpa that’s three halves…you said three halves?”
“Did I now? I must
have meant to say a 1/3…you’re a smart boy Tommy and I’m glad to see you were
paying attention - because math-a-matics
has never been my strong suit.”
Then he winked at me and smiled his big Irish smile.
“Now Tommy is there
anything that you didn’t understand?”
“Grandpa, will the people ever get their money back?”
“That’s part of the
plan…but just when they get repaid depends on how fast you get the cash in, how
well you manage it, how well you grow it and how much is left when you die.
Always keep careful records of who lent you the money, when and if you paid it
back to anyone, and who’s still owed the original $5.00.
"When you’re called
home to heaven, your attorney will settle all accounts with interest for the
people you still owe. If you’re a good steward of money the $5.00 loan should
return the principal plus some interest.
“The important thing
is to have a great time while you’re here, give people more than their money’s worth
in shared laughs, unexpected kindnesses and true friendship in good times or
bad.
“Grandpa how do you make a million friends?
“It’s the hard and the easy
part - if you follow The Golden
Rule…but, time is the enemy so you’d better hop down off my lap and get busy
making friends right now! If you do it
right, they’ll name a drink after you…like they did after me.”
I was so excited I hopped off Grandpa’s lap, flew down the
stairs and ran out of the house and straight down the street to Eddie Kelley’s.
I announced that I was there to be Eddie’s friend and to borrow $5.00.
Eddie punched me in the nose.
I had grasped the basic concept…but, my timing and execution
was way, way off.
Postscript:
When my grandfather Thomas E. Collins died just shy of 90
years young, his funeral wake was at the Howard Funeral Home on South Grand Avenue in the 16th Ward of the City Of St. Louis and it went on for 3-days and 3-nights.
It was attended by U.S. Senators, the mayor of St. Louis, the Fire and Police Chiefs,the Prosecuting Attorney, many Aldermen, the City Corner, Municipal, State and Federal Judges,icemen, pipe fitters, coal deliverymen, union bosses, rank and file policemen and firemen, Jewish tailors, bartenders, accountants, and a stream of weeping
women, whom my great Aunt Mamie described as Tom’s special friends.’
He had been a widower for nearly 40-years, but he never
lacked for lovely female companionship.
More than one person told me that my Grandpa could have been
the President of the United States, if only he had wanted to.
I never new Grandpa Collins to have a job, yet he always had
plenty of cash, a new car, many pairs of highly-polished shoes, very fine suits
and many stylish hats from Levine’s with a LIKE
HELL IT’S YOURS name tag in the inside of each hatband.
Years later I asked his son, my Uncle Harry,
“What did Grandpa Collins do for a living,he never had a job or any visible means of support, at least I never saw any
visible means?
Uncle Harry replied, Tom, he never had any visible means of support.
He had
invisible means.”
He laughed and never explained. Today whenever I walk into a bar, I check to see if the
drink menu still has
Tom Collins listed on it. When I see
it, I smile…and wonder if he did have a million friends after all.
He was truly a one of kind Irishman, an FDR and Harry Truman
Democrat and as he used to say,
“There's
only one T.E.C. and by Christ that’s me!”
