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 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!”
