Episode notes
There are many business models built on people not utilizing the service or taking risks with people's assets that they think are being kept safe.
- Planet Fitness doesn't want its members to utilize the gym. If 40% of Planet Fitness's members started using the gym regularly, the gym wouldn't be able to support the volume and the business model would fall apart.
- Banks don't actually keep your money safe for you. Even the biggest banks are only required to keep 10% of the total deposits available as reserves. They are loaning out the other 90% or more (multiple times (called fractional reserve banking)) to make money off of fees and interest rates. If all of a sudden people wanted to withdraw 20% of the money supposedly available that's called a "bank run" and the bank would be insolvent (unable to repay its depositors).