Posts Tagged ‘assets’
Written by Will Hawkins on 12 November 2009
What do banks do?
I get a few emails with humour coming around at work, which I am sure most of you do too. Most of them, I read and delete. I thought I would publish this one because, although it first came out in 1957, it seems entirely up to date.
Imagine a banker being interviewed about what banks do:
“Q: What are banks for?
A: To make money.
Q: For the customers?
A: For the banks.
Q: Why doesn’t bank advertising mention this?
A: It would not be in good taste. But it is mentioned by implication
In references to reserves of £249,000,000,000 or thereabouts. That is
The money they have made.
Q: Out of the customers?
A: I suppose so.
Q: They also mention Assets of £500,000,000,000 or thereabouts. Have
They made that too?
A: Not exactly. That is the money they use to make money.
Q: I see. And they keep it in a safe somewhere?
A: Not at all. They lend it to customers.
Q: Then they haven’t got it?
A: No.
Q: Then how is it Assets?
A: They maintain that it would be if they got it back.
Q: But they must have some money in a safe somewhere?
A: Yes, usually £500,000,000,000 or thereabouts. This is called
Liabilities.
Q: But if they’ve got it, how can they be liable for it?
A: Because it isn’t theirs..
Q: Then why do they have it?
A: It has been lent to them by customers.
Q: You mean customers lend banks money?
A: In effect. They put money into their accounts, so it is really lent
To the banks.
Q: And what do the banks do with it?
A: Lend it to other customers.
Q: But you said that money they lent to other people was Assets?
A: Yes.
Q: Then Assets and Liabilities must be the same thing?
A: You can’t really say that.
Q: But you’ve just said it! If I put £100 into my account the bank is
Liable to have to pay it back, so it’s Liabilities. But they go and
Lend it to someone else, and he is liable to have to pay it back, so
it’s Assets. It’s the same £100 isn’t it?
A: Yes, but…..
Q: Then it cancels out. It means, doesn’t it, that banks haven’t
Really any money at all?
A: Theoretically……
Q: Never mind theoretically! And if they haven’t any money, where do
They get their Reserves of £249,000,000,000 or thereabouts??
A: I told you. That is the money they have made.
Q: How?
A: Well, when they lend your £100 to someone they charge him interest..
Q: How much?
A: It depends on the Bank Rate. Say five and a-half percent. That’s
Their profit.
Q: Why isn’t it my profit? Isn’t it my money?
A: It’s the theory of banking practice that………
Q: When I lend them my £100 why don’t I charge them interest?
A: You do.
Q: You don’t say. How much?
A: It depends on the Bank Rate. Say a half percent.
Q: Greedy of me?
A: But that’s only if you’re not going to draw the money out again.
Q: But of course I’m going to draw the money out again! If I hadn’t
Wanted to draw it out again I could have buried it in the garden!
A: They wouldn’t like you to draw it out again.
Q: Why not? If I keep it there you say it’s a Liability. Wouldn’t they
Be glad if I reduced their Liabilities by removing it?
A: No – because if you remove it they can’t lend it to anyone else.
Q: But if I wanted to remove it they’d have to let me?
A: Certainly.
Q: But suppose they’ve already lent it to another customer?
A: Then they’ll let you have some other customer’s money.
Q: But suppose he wants his too….and they’ve already let me have it?
A: You’re being purposely obtuse.
Q: I think I’m being acute. What if everyone wanted their money all at
Once?
A: It’s the theory of banking practice that they never would.
Q: So what banks bank on is not having to meet their commitments?
A: YOU GOT IT!”
Tags: assets, banks, Finance, Five, liabilities, practice, reserves
Posted in business | No Comments »
Written by Will Hawkins on 06 March 2009
Cutting through the hype and understanding the realities of trends or statistics is an action which happens instinctively. After setting up several of my own businesses, which were not always successful, I have learnt to scrutinise information more thoroughly through experience. It saves money and time in the long run.
Twitter is one such trend which I have been signed up to since its early days, although I confess I was unsure of how to use it, attract followers and find interesting people to follow.
I also saw that in December 2008 that Dell uses Twitter to advertise special offers for their products, which they now offer exclusively to their Twitter followers. They claim to have gained $1m in sales through this channel. This is good business although it might be easier if you already have a name and brand like Dell to gain followers.
After a six week business trip to India in the autumn of 2008, where I spent much of my spare time keeping up with my family, friends and workmates through Blogger, Skype, Facebook and SMS, I decided to use my Twitter account in earnest to see if it was any good for business.
Like most new ‘tweeters’, I expect, I had to find my way around the ’system’ and to work out a way to measure its effect. I decided my goal was to promote my blog.
The starting point was from having one or two visitors a week to my blog in November 2008. I now have between forty and sixty visitors to my blog per day at the time of writing.
Currently, I have 595 followers on Twitter to my alias (http://twitter.com/whawkins). I follow about 800 people, although I do cut down the number of people I follow each week. So, it would seem that about 10% of my followers visit my blog from my Twitter ‘tweets.’
I then set up a Twitter alias for our business (http://twitter.com/mmt_digital) to see if I could attract visitors to our web site. In the first week, this increased web site visitors by 14.6% according to our Google Analytics account. Two of us sent out about four tweets per day on subjects relevant to our business.
Attracting followers is achieved by following others who are interested in the same things as you. They generally follow you back. This can be automated to save time. There are various tools to help you with this such as ‘TwitterPerch‘.
Being a bit fanatical about the ‘numbers’, we also used ‘Hootsuite‘ to measure the amount of clicks on our tweets and to test out which subjects were more popular.
Have we gained any new business yet either from the business site or my blog? No, not yet. But this experiment has shown that it is a good way to get interest in your site or blog. I have been invited to talk about technology by a local BBC Radio station which originated from a Twitter conversation with the show host.
Has it cost anything yet? No, apart from an hour a day for the last two weeks.
Will we carry on ‘Twittering’? Of course. It is a good publicity tool and a good way to find information out which you are unlikely to have found through Google unless you knew what you were looking for. The more we work on writing interesting tweets, the more traffic we will gain, which is likely to raise our Google rankings when people are looking for digital communications agencies or bloggers like me.
Tags: assets, BBC, business, communications, content, digital, google, marketing, media, radio, sales, social networks, technology, Tweet, Twitter
Posted in business, dell, google, marketing, sales | No Comments »
Written by Will Hawkins on 23 January 2009
I was a bit of an academic ‘waste of space’ at school. One teacher, who was trying to be supportive, said to a gang of about five of us one day, “Many other teachers think of you as wasters”. That was a surprise.
Most people studying for their ‘A’ levels studied three subjects. My poor results at ‘O’ level meant that I was doing just two ‘A’ levels which meant that I had some spare time to fill.
I was duly dispatched to study statistics ‘O’ level and, much to my embarrassment at the time, typing. Well, I failed the statistics exam, although I quite enjoyed the lessons, and I passed the typing exam.
For many years, the typing qualification was useless. In the Army, I was learning how to clean weapons, carry out platoon attacks and lead a team.
When I left the British Army, I soon found myself working with computers and I quickly picked up touch typing, which had been a distant memory from school.
How ironic. That one skill is probably the single largest barrier for people learning how to use a computer effectively. Typing with two fingers is no fun and it is exhausting if you are looking at your fingers all of the time.
The use of computers in schools, business and the home is now all pervasive but there has been little change in the format of the computer and how we interact with it for a long time, until recently.
Apple really kicked things off with its iPhone, allowing you to touch the screen with more than one finger or your stylus (which I was always losing).
Suddenly, the computer, albeit a pocket-sized computer, was something the masses were touching.
For sure, there have been ‘Tablet PC’s’ around for some time. But they never had the capability to recognise more than one item touching the screen at once.
Last week, I saw ‘Microsoft Surface’ computing for the second time at the BETT Show in London. The beauty of it is that it is a touch screen computer but the screen is the size of a small table. And, you can touch it with more than one finger.
Big deal. But, the beauty is that a user can, say, bring up a picture 
and move it around the screen with one hand while bringing another picture into view with the other hand. This is technically difficult to do. Imagine having ten people using ten mice on the same computer!
Suddenly, this technology breaks a barrier by removing the tools, such as mice, keyboards, pens and single digits, which have traditionally required us to learn a new skill just to start using the computer.
Now, the computer is a step closer to us.
I can see some great applications for these computers in schools helping Classroom Assistants to help children with reading and arithmetic, to help them become more engaged in the most important skills.
The price of a ‘surface computer’ is pretty steep now but they will become increasingly popular and accessible.
Tags: apple, assets, british army, business, change, Five, internet, media, microsoft, mobile, skills, technology
Posted in business, microsoft, surface computing, windows | No Comments »
Written by Will Hawkins on 14 January 2009
Some years back, I set up and launched an online delicatessen which sold the produce of small farmers and producers. There was a demand locally and nationally, and it was differentiated from other delicatessens.
I hired a web design company to set up a super web site which had e-commerce capabilities. But, I had no money left to market it effectively and it broke the business.
The lessons were that I should have spent far less on the web site, more time building my business at small markets to begin with, more time writing a blog about food and producers which pointed to my web site and developed my business more cheaply using suitable web methods.
If I had done this, then I would have enabled the business to survive and kept vital cash in the business while still promoting it through my blog and web site.
There was no Twitter at that time and Facebook was barely off the ground. Google Adwords did work and brought me some nice leads, but even then, it cost more money than I had left to market it correctly with the lack of money to do it.
Web sites are important for small businesses but you must keep your scale and your ambitions in check and invest in your web site in line with your clear marketing strategy and budget.
Tags: assets, business, design, Five, google, marketing, media, small business, Social Media, strategy, Twitter, web design, web sites
Posted in Uncategorized | No Comments »
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