Wise Judgment: How a Millionaire Makes Decisions
A man walked into a bank in New York City and asked for the loan officer.
He told the loan officer that he was going to the Philippines on business for two weeks and needed to borrow $5,000. The bank officer told him that the bank would need some form of security for the loan.
Then the man handed over the keys to a new Ferrari parked on the street in front of the bank. He produced the title and everything checked out. The loan officer agreed to accept the car as collateral for the loan. The bank’s president and its officers all enjoyed a good laugh at the guy for using a $250,000 Ferrari as collateral against a $5,000 loan.
An employee of the bank then drove the Ferrari into the bank’s underground garage and parked it there. Two weeks later, the guy returned, repaid the $5,000 and the interest, which came to $15.41.
The loan officer said, “Sir, we are very happy to have had your business and this transaction has worked out very nicely, but we are a little puzzled. While you were away, we checked you out and found that you are a multi-millionaire. What puzzles us is why you would bother to borrow $5,000. The millionaire replied, “Where else in New York City can I park my Ferrari for $15.41 and expect it to be there when I return?”
That's how the majority of the wealthy people in America get and remain wealthy. They know a ton more about money management than the average person and they use this specific knowledge to make better financial decisions.
Making better choices is mainly about getting great information and then disciplining yourself to use it.
Processing Questions for PLI Curriculum Teachers/Trainers:
1. The Millionaire came at the problem of parking his Ferrari from a different direction then most would. What is an area of your life that could benefit from attacking the problem from a different direction?
2. What are the advantages of attacking a problem from a different direction?
3. What are some ways you can discipline yourself to use the information you have to make better choices?