Millionaire Puts His $250k Ferrari on Collateral Just to Loan $5,000 from the Bank

Bankers were shocked to discover that a multi-millionaire man borrowed $5k and used his Ferrari worth of $250k as a collateral... but they were not expecting the clever reason behind it.

This story is about this man who parked his Ferrari, worth $250,000 in front of a bank and decided to use it as a collateral to loan a smaller amount. The millionaire man just bought his car but he’s willing to give it up as a collateral in a New York bank for some reason. What is it? 

Upon entering the New York bank, he asked if he could borrow $5,000 from the loan officer. However, the loan officer said he can’t borrow or ask for a personal loan for quick cash if he’s not a depositor in the bank. So what he did was he put his Ferrari on collateral. But why did he go these lengths to be able to borrow money from the bank?

Because the Ferrari’s too expensive for the loan amount, the officer granted his request for personal loan. Thinking that the man made a stupid decision, the loan officer laughed really hard. However, in a few week’s time, the man returned and shocked the hell out of the loan officer.

Here’s the full story:

“His name was Bubba, he was from Texas and he needed a loan, so he walked into a bank in New York City and asked for the loan officer. He told the loan officer that he was going to Paris for an International Redneck Festival for two weeks and needed to borrow $5,000, and that he was not a depositor of the bank.

The bank officer told him that the bank would need some form of security for the loan, so the Redneck handed over the keys to a new Ferrari. The car was parked on the street in front of the bank.

The Redneck produced the title and everything checked out. The loan officer agreed to hold the car as collateral for the loan and apologized for having to charge 12% interest.

Later, the bank’s president and its officers all enjoyed a good laugh at the Redneck from the Texas for using a $250,000 Ferrari as collateral for a $5,000 loan. An employee of the bank then drove the Ferrari into the bank’s private underground garage and parked it.

Two weeks later, the Redneck returned, repaid the $5,000 and the interest of 
$23.07. 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 on Dunn & Bradstreet and found that you are a distinguished alumni from Texas A & M, a highly sophisticated investor and multi-millionaire with real estate and financial interests all over the world. Your investments include a large number of wind turbines around Sweetwater, Texas... What puzzles us is, why would you bother to borrow $5,000?”

The millionaire replied: “Where else in New York City can I park my car for two weeks for only $23.07 and expect it to be there when I return?”

Many people believe that in order to achieve success in your life, you need to work hard. What they don't tell you is because of the different circumstances you encounter along the way, working hard rarely gets you to your goals. You need more than just hardwork if you want to succeed. Nowadays, it is more important to work smart.