Two boys, Tyler and Dylan, 14-year-old twins who couldn’t be any different from each other, woke up one morning to find their grandfather Jim sitting at their kitchen table eating breakfast. Seeing Grandpa was quite a surprise, he lived more than 600 miles away! Grandpa was there with some exciting news. He had gotten a check in the mail from a bank he hadn’t visited in more than 50 years. A savings account he had forgotten about was being closed, and the check was payment for the balance of the account. He was about 14-years-old himself the last time he’d gone into that bank to make a deposit of just three dollars. Back then, three dollars could buy a whole lot more than Tyler and Dylan can get with three dollars today. Grandpa Jim had earned that money mowing Mrs. Johnson’s lawn up the street. He mowed a lot of lawns that summer. When he made his deposit that day a half-century ago, he had a balance of $250 in his account, the product of two summers of mowing a lot of lawns.
Over the course of a half century, that $250 grew to a sum of nearly $900!
Grandpa Jim had left his home around lunch time the day before to drive out and share his new found riches with his only two grandchildren, and had gotten into town in the middle of the night while they were sleeping.
Grandpa Jim had eight $100 bills in his pocket, four for each boy. He told them they could do whatever they liked with it.
Tyler knew right away exactly what he was going to do with his money. Several of his friends had “Call of Duty” on the XBox 360, and were playing together on-line almost every day. Tyler was never able to join them because he didn’t have an XBox 360. He would have enough to get the system, the game, and a subscription to the online service he’d need to play with his friends.
Dylan, on the other hand, was impressed with his grandfather’s story. He asked his father if they could stop by the local home improvement store on their way home from getting Tyler’s XBox so he could buy a lawn mower. School was about to get out, and he wanted to spend his summer earning money by mowing neighbors lawns.
Over the course of that summer, Tyler spent many hours nearly every day battling with his friends on the XBox, and making new friends from around the country that were also playing the game online. Meanwhile, Dylan was mowing, on average, three lawns every day, at a cool $20 per lawn! In just three months, he was able to save up over $3,000. That’s after paying for gas for the mower, printing fliers to advertise to the neighborhood that he had a small lawn mowing business, and sharing some money with his local church.
With school starting the next autumn, both boys had less time to spend doing what they did all summer long, but they continued after school. Dylan reduced down to just one lawn per day during the week, but stepped up on his weekends and did five each day, and was able to keep all of his customers happy. Tyler had no idea how much Dylan was making, or what he was doing with his money. Dylan had been saving everything he could. By the time snow began to fall, he had banked nearly $5,000!
The next spring came, and Dylan got off to an early start. In April, as the grass began to turn green again, he was able to keep all of his customer from the previous year, and began mowing lawns during evenings and weekends. When summer came, he expanded his business. He realized that working weekends wasn’t such a big deal during the school year, and he could keep doing it. He needed some time to spend with friends though, so he dropped down to just two lawns each day on weekends, but as he was getting to know his customers lawns after working hard the previous summer, he got more efficient, and could now average four per day during the week. Some days it would rain, and he couldn’t mow, but he could make up for it by doing extra on nice days. After all, each lawn only took him an hour on average, and at four lawns per day, he could be done by lunch and have all afternoon to spend with friends! Business was booming, and Dylan had a nice income for a 15-year-old boy, over $400 per week, even after paying for gas for his mower, blade sharpenings, and other expenses that he would incur in the course of his budding little business.
Tyler, on the other hand, lost interest in “Call of Duty,” but found another game to enjoy with his friends. He hadn’t worked, and had no money, but managed to convince his parents to get him the game for his birthday.
This continued through the second summer, and even a third. By the end of the third summer, the boys were now 16 and gotten their driving licenses. Neither had a car, but they didn’t mind, if Mom’s car wasn’t available when they needed to go somewhere, Dad’s usually was. On the rare occasion that neither was available, there was usually a friend that could get a car to take them where they wanted to go.
As summer turned into fall, and fall turned into winter, Dylan’s business wound down as usual. However, he realized that he had amassed a sum of nearly $15,000 over the course of three summers of hard work. He decided to use part of that money to buy a used truck and a snow plow. He spent $8,000 to buy a Ford 3/4-ton F-150. Not only would he have a vehicle of his very own, but he’d have a way to make some money throughout the winter as well. It snowed hard that winter, and nearly half of Dylan’s lawn mowing customers had hired him on to plow their driveways in the winter at almost $20 per trip. One one hand, it was quick money when there was snow, as it took him only about 15 minutes per driveway, but it often required him to get up early in the morning to plow snow before school so his customers could get out the driveway for work in the morning.
By the time spring rolled around, not only did Dylan have $5,000, which was left over after he bought the truck, but he’d earned another $3,000 plowing driveways over the winter. He realized that with a truck, he could pull a trailer, and could afford to buy a riding lawn mower that would allow him to mow two lawns in the time that it took him to mow just one with his old mower. He had also built up a good enough reputation that he could increase his price for mowing to $25. He was also starting to think ahead to what he might do after graduating from High School. He wasn’t sure what he would do, but he knew that no matter what he did he would need money. In addition, many of his friends started working at local grocery stores and restaurants over the summer, and didn’t have as much time to spend with him in the afternoons, so he decided to add more customers. It would keep him busier and allow him to make more money. The previous summer, he had 25 customers, but this summer he doubled it to 50.
At this point in time, Tyler was spending a lot less time playing games with his friends, who were also working part time jobs for extra money. He had been quite impressed that his brother was able to buy a truck, a trailer, and a riding lawn mower with all of the money he had made mowing lawns and plowing driveways. He started to see that he needed to work too. He took a job at a local movie theater for eight dollars an hour selling concessions, and was able to work about 20 hours per week. It gave him some spending cash that he could use to have fun with his friends.
Tyler began to grumble though. He was getting paychecks for about $120 per week after taxes, while his brother Dylan was making close to $800 after taxes and expenses. Not only that, but Dylan was his own boss! Tyler had a boss he couldn’t stand. He’d have to work the midnight shift when big new movies came out, and would get scheduled all the time to work while his friends were out having fun. In addition, Tyler’s boss just wasn’t a very nice guy.
This story could go on, but I think we’ve reached a place where it’s easy to illustrate the point. These two boys have gotten an excellent lesson in capitalism. Both were free to make their own choices, and do what they wanted with their money. Tyler spent what he had on fun things, while Dylan invested in capital goods that he could use to make more money. Both boys started out on a completely equal footing, but in the course of just three years, Dylan had built up a nice business with a healthy income for a boy still in high school. By the time Tyler got into the job market, making just a little over minimum wage, his brother Dylan was bringing in an amount that, if carried out to the entire year would be the equivalent of $65,000 per year with little more than a truck and a lawnmower, and he hadn’t even graduated from high school yet!
The moral of the story is that decisions have consequences. It’s easy to see from this fable how people with a little bit of creativity and a lot of determination can build business empires. I imagine Dylan using the money he makes over the third summer to buy another riding lawn mower and hiring his brother Tyler to mow lawns with him. The revenue the two of them could earn in a year could be double what Dylan could make by himself, but it would hardly be fair to expect Dylan to split the revenues evenly with Tyler. If it hadn’t been for Dylan’s hard work the three previous years, and his investment in the equipment needed to do the work, their collective revenue would be zero. Yet many Americans that grew up playing video games in their spare time (and I played a lot of video games in my teenage years, to be sure), feel cheated when they take a job that is provided by someone like Dylan that worked hard and built a business. After taxes, a $25 lawn mowing job would be fortunate to put $20 into the business, and yet the tax rates are actually much higher in America, especially when state, local, and payroll taxes are considered. Dylan still has enough money left over to pay his brother more than he’d make at the movie theater, and make a return on his investment. However, if he doesn’t make enough return to pay for the second lawnmower, he is better off not buying the second mower or employing his brother. If Tyler gets too greedy about how much he should be paid, Dylan won’t be able to employ him, won’t get the second revenue stream, and 50 homeowners will have to mow their own lawns. Tyler’s attitude could ultimately effect 51 people besides himself, and land him in the movie theater working for the boss he dislikes, rather than his brother.