Something to think about..
There’s this lady in New York. She wanted to go on a 2-week holiday to the Carribeans. She then went to the bank to get a 1,000 dollar personal loan. She then told the bank manager that she’s willing to put up her 500,000-dollar Mercedes Benz as the collateral. The bank quickly agreed. The bank manager thought, how stupid can this person be? Putting up an expensive car as a collateral for a 1,000 dollar loan? You don’t even need a collateral for this.
Two weeks later, she came back from her holidays, paid the loan with interests and got her car back. The bank manager, itched with curiosity, had to ask her. “Miss, I can’t help myself but wonder. Why did you put up your expensive car as a collateral for such a small loan?”
She hesitantly replied… “Well dear, I’ve been worrying myself about where to keep my car during my absence from the city. I thought, if I had left my car in the parking lot, I would be charged 10 dollars per day for somebody to take care of it. This would equate to 140 dollars for 2 weeks. Plus, they wouldn’t be responsible if something should happen to my car. I then thought that it would be better to borrow 1,000 dollars from the bank and let you guys take care of my car. That way, I only have to pay 5 dollars of interest for those two weeks (assuming 12% interest per annum). I saved 135 dollars and the car is guaranteed to be there when I come home.” 🙂
Adapted from the book “Kochie’s Guide” by David Koch.