Money and Business Facts for Kids from the "You're in Business Adventure" at the Wonder Rotunda
This material about money, the basics of running a business, saving, spending and giving to charity is drawn from the "Learn More" reading opportunities presented in the "You're in Business--Big Smoothie Adventure" at the Wonder Rotunda, an on-line educational theme park for ages 7-12.
Great Seal of the United States on the One Dollar Bill
The Great Seal was created by the founding fathers to reflect the beliefs and values of a free and independent America. Benjamin Franklin, John Adams and Thomas Jefferson were given the job by the Continental Congress of creating an emblem for the United States on July 4, 1776. On June 20, 1782, the Seal was finalized and approved by the Continental Congress. The number 13 is present in the Great Seal in many places. There are 13 olive branch leaves, 13 arrows, 13 stars in the crest above the eagle, 13 stripes in the shield, and 13 letters in the motto carried by the eagle, E Pluribus Unum.
The number 13 is symbolic of the first thirteen states - Massachusetts, Connecticut, Rhode Island, New Hampshire, New York, New Jersey, Pennsylvania, Delaware, Virginia, Maryland, North Carolina, South Carolina, and Georgia. The olive branch and arrows signify the power of peace and war.
Printing of U.S. Bills by the Bureau of Printing and Engraving
The U.S. Treasury Department's Bureau of Printing and Engraving is the sole producer of all United States paper currency, also known as bills. Production of United States paper currency involves many steps. The creation of a note, or bill, begins with the hand-engraved piece of soft steel, known as a master-die. Separate portions of the design, such as the portrait, the ornamentation, and the lettering are hand-cut by the engravers. The engraver is an artist whose job is to bring the portrait and designs to life.
The multiple copies of the die are transferred to a printing plate composed of 32 notes, each of which is a copy of the original engraving. From the plate, sheets of bills are printed on printing presses. Finally, the sheets are sliced by special cutters into the notes and sorted into stacks of one-hundred notes. The units of 100 notes are banded and packaged into "bricks." Each "brick" contains 4,000 notes. The bricks are distributed to one of the twelve Federal Reserve Districts, which issue the notes to local banks.
Minting of U.S. Coins by the U.S. Mint
The only producer of US coins is the United States Mint. The Mint has been responsible for producing coins, also known as minting, since 1792.
U.S. law requires that every coin have the following inscriptions: "Liberty," "In God We Trust," "United States of America," and "E Pluribus Unum," as well as each coin’s denomination and the year of issuance.
The U.S. Mint has production plants in several places across the country. The Mint Mark which appears on the front of the coin, can often tell you where it was produced. For example, the letter P indicates the coin was minted in Philadelphia. "D" indicates it was minted in Denver.
The first step in creating a new coin design is the drawing. Then, a sculptor makes a model of the coin from the drawing. The design is used to make a master die. Coils of flat metal are cut into blanks. Then, stamping presses use the master die to stamp the blanks with the coin's design.
Counterfeit Currency
Counterfeit bills are fakes or imitations, created to look like the real thing. The United States Secret Service is responsible for trying to prevent counterfeiting. It is very important that people can trust that the money they receive from others is real, and not counterfeit. For this reason, it is a serious crime to create counterfeits, and governments work very hard to stop it.
As you have learned, many features are incorporated in bills to help people identify fakes, such as security threads, color shifting ink and watermarks, which are faint images or designs that are a part of the paper itself. Counterfeiting remains a challenge for law enforcement because of the ease and speed with which counterfeit currency can be produced using the newest technology in photographic and printing equipment.
Would You Like to Run Your Own Business?
If you found running your own smoothie stand in the park fun, you might want to try your hand operating a business in the real world. The first thing you need to do is come up with a need that you could fill in your community. Let's suppose several of your neighbors need yard work done. So, you decide to start a business raking leaves, cutting grass or pulling weeds. You'll want to do some advertising so that people know about your services.
Perhaps you'll create a flyer, print copies and distribute them door to door. You will also need to set your prices. Will you charge an hourly fee? Or, will you quote a fee for completing a specific job? In setting your prices, remember to take into account your expenses. The cost of flyers, and any tools you need to buy are your costs or expenses. As you learned from the smoothie business, your profit is what you have left to spend after paying your expenses. Keep track of your revenue (what you collect from customers) and your expenses in a journal.
Purchasing Power and the Effect of Inflation on Your Money
The U.S. government, through the Federal Reserve Board, tries to keep inflation low and stable over time because that helps keep the economy growing over long periods of time.
When inflation is low and stable, businesses and households can make better spending and investment plans because they do not have to worry about high inflation decreasing the purchasing power of their money.
As you have learned, inflation means that the general level of prices of goods (like pizza) and services (like seeing your doctor) are increasing. A generally used measure of inflation that you will see reported in the newspapers is the Consumer Price Index, also known as the CPI.
Role of Savings Accounts
As you have learned, savings accounts are an easy way to earn interest on your money. When you deposit your money in a savings account you are giving the bank the use of your money. In exchange, the bank promises to pay you interest for the right to use your money.
How do you know you will get your money with interest back? Most savings accounts are insured through a government program known as Federal Deposit Insurance (FDIC) up to $100,000. As we learned, the bank takes your money and lends it to people, for example, to help them run their business, or to buy a car or a home. So, how do banks make a profit?
The bank charges interest when it lends money to people or businesses. It makes a profit when it lends money at a rate of interest that is slightly higher than its cost of money. The bank's cost of money is the rate of interest it must pay on deposits such as yours.
Investing Money
Investing can be very risky and requires a lot of research and hard work. You need to understand the value of what you are investing in, and fully understand the risk that what you are investing in could go down in value under various economic conditions. Some investments are less liquid than others and you need to consider how long you want to stay invested.
An investment is considered liquid when you can sell it quickly if you want to convert it back into dollars. Savings accounts are an example of a liquid investment. Buying a home or a piece of art are less liquid investments because it may take you time to find someone to sell them too. No matter what, be sure to talk to your parents and even investment experts before you consider making any investments.
Giving to Causes or Needs
Giving money to help others in need or to support causes you believe in is a way to make a difference in the world. Even though you are young, you can still make a difference. One way to give is to donate money to a charity, which is an organization of people that work together on a need or problem. There are many wonderful organizations that are working to feed people in poverty, help people displaced by disasters such as earthquakes or hurricanes, to save the environment or to protect animals, among many, many others.
Another way to give is to volunteer your time. Helping out at a soup kitchen or even helping an elderly or disabled neighbor are examples of how you might volunteer. Giving back to your community is a great way to connect and share your time with people of all ages, races and backgrounds. Giving back gives you confidence that, one person at a time, we can make the world better and improve the lives of others.
About the Wonder Rotunda
The Wonder Rotunda is an online educational theme park (for ages 7-12) that sparks curiosity, helps kids find their interests and passions, and inspires them to think about making a mark in the world. Topics explored include marine life, space exploration, animal life, classical music, nutrition, American government, globalization, climate change, money and business, the visual and performing arts, film making and climate change. Take the Free Tour.
About the You’re in Business—Big Smoothie Adventure
Ever dream of running your own business? Well, at the Big Smoothie Adventure, you get to set up your own smoothie stand in Wonder Rotunda park. Discover the different, people, places and events pictured on our money. Learn about saving, investing and giving to charity. After a hands-on lesson in making smoothies, open your smoothie stand for business.