I have no doubt that all of you have heard of this new game show by now. It is like "Who wants to be a Millionaire?" without the tough questions, just tough yes or no decisions. All you do is play a game of luck and chance, with the ability to make an educated decision. My wife loves the show, I do to a point. I find it very intriqueing to see the process that someone goes through to make the decision of when to sell their case, as most of them do. Even during the current "Million dollar Mission" where half of the board has $1,000,000 in the cases. The person has a 50/50 chance of getting a million. yet nobody wins the million, even those that have it in their case, sell it becuase they would rather be garunteed several hundred thousand then they would take the risk of getting next to nothing if they pick the wrong case.
Why do we also settle on less instead of take the chance to lose it all? Here is a few suggestions.
The always popular proverb "A bird in the hand is worth two in the bush;" is ingrained into our minds and grabs hold of us. Wonder why this is, well the proverb has lasted about 2500 years, and has variations in almost a dozen languages. It is found in one of Aesop's fables, a hawk seizes a nightingale, who pleads for its life, arguing that it is too tiny a morsel to satisfy a hawk. The hawk replies, "I would be foolish to release the bird that I have in my hand to pursue another bird that is not even in sight."
(I recently learned of its origin in the book that I am reading. Made to Stick by Chip and Dan Heath. I am not much of a reader but this book has captured me.)
Question: Would you trade $100,000 for a 1 in 5 chance at winning $1,000,000.??
Answer: I would bet that almost all of you would rather take the garunteeed $100k instead of a 20% chance at a million. I would.
Life is risky in so many ways, but when an individual is provided a garuntee, it holds much more value than a good chance at something much bigger.
So now we know why NBC hasn't given away their million dollars yet. How does this relate to the Credit Union movement? Well I think it is interesting to see how individuals will take risks with their money, but when it comes down to the end and the ultimate risk is there, they almost always settle for the safe answer. Credit Unions can provide the best of both worlds. We can be the safe alternative to other riskier asset accumulation methods, but we can use an individuals willingness to take risks to help them save money. That is the idea behind products like a Prize-Based Savings account. We appeal to the risky side while providing nothing but a safe place to store their money.
By the way. My wife and Mom want me to submit an application to be on the show, I think it might be a good idea, the only problem, is that I might be the first person, that refuses to deal money with a banker. I am more of a Credit Union guy. And they don't want to buy my box back, they want to help me get to that million dollars.