Recently, we have been covering the topics of the Canadian banking system and mortgages. Firstly, we need to learn the definition of banking to understand how banking systems work. I found this definition to be the most accurate. Banking is a financial process carried out by an institution that accepts deposits, lends money, and transfers funds. Our system in Canada has two types of banks, central banks and chartered banks. I already covered the importance of central banks in my last post, so I will summarize what they do and why they are essential. Central banks like the Federal Reserve System in America are banks that manage the money for one nation or a collective. They also act as the arm of the federal government by controlling inflation and setting the overnight lending rate of a country. This overnight lending rate is simply the interest rate large banks use to borrow and lend from one another in the overnight market. It is important to note that all commercial/chartered banks follow the overnight lending rate of the central bank on their interest rates.
Chartered or commercial banks are financial institutions that accept and safeguard finances from individuals and organizations. They also lend out money to the public through loans and mortgages. These banks function by holding deposits from individuals and paying a fee or the overnight lending rate to the depositor. From the customers’ deposits, chartered banks collect a specified amount called a reserve and lend out the balance to other customers who want to borrow. They then charge a higher rate for these individuals and profit from the difference in interest rates.
Next, we have the subject of mortgages. By definition, a mortgage is a type of loan used to buy a home or other property. In mortgages, you as the customer need to pay some of what you owe to the bank through interest rates and principal. Sometimes called mortgage rates, these interest rates are typically low, around 1% to 4% of your total loan. On the other hand, principal is a portion of the amount of money borrowed. It is determined by the down payment of the property subtracted from the final retail price of the same property. However, this sum of money gets paid across multiple years in a process called amortization. Depending on your reliance or reputation with the bank, they may charge you a smaller mortgage rate. If you cannot pay back the debt you owe, the bank also has a right to take the debt you owe from your asset. This is most commonly known as a lien.
1. What kinds of learning opportunities does the mentor provide to expose you to new learning?
Since my In-depth project revolves around the world of business, I get exposed to financial topics meant for grade twelve students or adults. For instance, grade nine students do not learn about mortgages, but in my latest lesson, I covered all about what mortgages are and their purpose. My whole In-depth project has covered more about business than the average person knows. The entire reason I chose business and stock trading to be my In-depth topic was so I could add another skill to my platter that could give me an upper hand over the average person.
2. What kinds of learning opportunities exist to reinforce new learning?
There are many ways to reinforce my new learning in this field. The best way that I could fortify everything I have learned is through my final In-depth project. So far, the information I studied and the subjects I researched have not stayed concretely in my mind. Sometimes, I will forget the definition of an interest rate or a mortgage simply because it has not been reinforced by some type of work or project. This leads back to why I believe the final project for In-depth will reassure all of my learning and set it in stone within my mind. Without the project, I am worried that all my studies will dissipate as time goes on.
3. What kinds of opportunities exist that might accelerate learning?
Online, business materials like stock simulators and business games exist that could help my learning become more efficient. I know that the Wall Street Survivor stock simulator has been a great way to visualize the unpredictability of the stock market and how to purchase or sell stocks. Implementing these new business opportunities into my learning could greatly benefit my progress by helping my issues with the visualization of how everything plays into the stock market. From personal experience, I know that business videos have certainly been beneficial to me in the past.
4. When you get together, what do you talk about?
Our discussions during each lesson are strictly business. We are father and son, but we still focus on being efficient and making progress when learning. Recently, we talked about the Canadian and International banking systems alongside mortgages and loans. I covered all of this information already in my progress checkup. Our meeting subjects are also inside of my Learning Contract. Typically, we stick directly to the planned subject, but sometimes we will discuss interesting events that influence the economy or intrigue me. In one of our latest lessons, we talked about how Russia’s invasion of Ukraine is affecting the global market and how we in BC are being affected.
5. What is going particularly well in your mentoring relationship right now?
Our communication and efficiency continue to thrive as usual, but so do the quality of our lessons. I used to write as much information down about the subject without fully comprehending how all the parts tie in together. However, that has changed in the recent sessions since I have started to ask more questions that help me understand the way each item relates to one another. For instance, I did not realize how interest rates are a critical tool used by the government to control inflation, the economy, and consumer spending patterns until I asked my father if he could elaborate on the purpose of interest rates. Simple questions like this have led to the improvement of my lessons and continue to propel me through my learning.
6. What are you learning about one another?
We already know a lot about each other, yet we continue to discover more through our In-depth mentoring. I am learning about the knowledge my father has when it comes to business. I already knew that my dad gained a lot of experience from travelling the world solely on business ventures, but I did not comprehend the sheer quantity of information he learned during the past years. He has such a well of knowledge that I can ask him about a business topic like inflation, and he can generate an entire lesson right at the moment.
From my father’s perspective, I think he’s learning about how I learn effectively and what my learning habits are. Before, he’s never had the opportunity to see me grow and learn about new subjects. Now he’s been spending months teaching me about his expertise. This may seem far-fetched, but my father is basically seeing how I chose to learn and what I am interested in on an academic scale.