I read an article this week that a few weeks ago the Federal Reserve announced it was moving to a real time payment system nationwide. Which means that there isn't going to be anymore check clearing float and if you write a check it will be immediately payable on presentation, identical to cash. They project the system will be fully implemented in the next 4 years. I wonder if there is any implications for railroads, especially those that are not so financially stable? Just curious as this could be a fairly big change for those companies or individuals living paycheck to paycheck that used the float in the past.
Personally, I believe that if the new law forces some of the deadbeats out of the railroad industry, it will be a good thing.
If your financial plan depends upon float - you are already bankrupt.
Never too old to have a happy childhood!
Convicted One Personally, I believe that if the new law forces some of the deadbeats out of the railroad industry, it will be a good thing.
Here is a link to the Federal Reserve Board's August 5, 2019 Press Release:
https://www.federalreserve.gov/newsevents/pressreleases/other20190805a.htm
One would need access to the books of a company, specifically the daily cash schedule, to know what impact, if any, the new system will have on an entity's cash management.
JPS1One would need access to the books of a company, specifically the daily cash schedule, to know what impact, if any, the new system will have on an entity's cash management.
Well, when the original post specified "especially those (railroads) that are not so financially stable" I just thought it was safe to assume that "float" was critical to their financial culture.
At first I suspected this thread was just another joke thread, tying railroads to an off topic discussion as a silly tool of protest.
But then as I got to thinking about it, I realized that in order to implement this program, big brother is going to have to allow the other shoe to hit the floor as far as how widely available our personal information is to most businesses.
The noose is tightening once again.
A short while back I started a new job, and took my very first paycheck to one of those check cashing stores. They got on their computer...and declined to cash my check.
So, I took that as a lesson learned, and opened an account at the same bank that my paycheck was drawn from .
A couple weeks later my boss approached me and asked that I consider moving to a different bank. What does that tell us about his financial strategy?
Convicted OneA short while back I started a new job, and took my very first paycheck to one of those check cashing stores. They got on their computer...and declined to cash my check. So, I took that as a lesson learned, and opened an account at the same bank that my paycheck was drawn from . A couple weeks later my boss approached me and asked that I consider moving to a different bank. What does that tell us about his financial strategy?
That would tell me - "I need to look for a new employer - NOW!"
It all sounds pretty shady.
Convicted OneA couple weeks later my boss approached me and asked that I consider moving to a different bank. What does that tell us about his financial strategy?
I think Balt and Hebdo are right. There's only one reason your boss would want you to do something like that.
York1 John
I asked my doctor if I gave up delicious food and all alcohol, would I live longer? He said, "No, but it will seem longer."
BaltACD "I need to look for a new employer - NOW!"
LOL, That was my first thought as well.
Personally, I have never written a check that wasn't good, and I can't understand the mentality that would do otherwise. But then I cut up all my credit cards 25 years ago, have paid cash for the last 5 cars that I bought, and look at the modern credit/banking system as a tool of enslavement. I think that our civilization took a decided turn for the worse when credit card debt became regarded as "long term" debt.
This was actually intended as a serious question. I thought most transportation companies or a good percentage of them invoice for their services to the client on terms of net 30, net 60, etc. Is that a mistake? If that is the case, now that part of that net period before was bank clearing (I thought) wouldn't the net 30 become perhaps net 20? Just saying there could be cash flow implications here.
Also, I thought for the net 30 they charge an interest rate % on top of the invoice charge but I can't remember what I was taught the terms were......too long ago. Folks that pay immediately get a slight discount off the invoice amount?
Why not just ask the boss the reason for suggesting a change in your bank?
York1I think Balt and Hebdo are right. There's only one reason your boss would want you to do something like that
Well, the reason I included that little anecdote was to illustrate that certain traits are universal to the human experience, and you don't necessarily have to have direct access to accounting records to draw conclusions.
Not unlike allocating snow removal expenses to the Miami office....you just know that with creativity such as that abounding in a corporate culture, who knows what other evil lurks in the shadows?
EuclidWhy not just ask the boss the reason for suggesting a change in your bank?
Well, considering that he was moaning about overdraft fees just 30 seconds prior, I felt it was safe to assume that the former was a "lead in" topic.
Thereafter we just had a more honest relationship. Every once in a while he would ask of I would wait a couple days before cashing my check....and since I have a decent cash reserve that was never a problem. I also undestood full well that he had a lucrative business, he was always going to be good for the money, that he just had some eccentric customers who could be problematic in their own manner of affairs.
So, getting paid on wednesday instead of monday wasn't the end of the world for me
CMStPnPThis was actually intended as a serious question. I thought most transportation companies or a good percentage of them invoice for their services to the client on terms of net 30, net 60, etc. Is that a mistake? If that is the case, now that part of that net period before was bank clearing (I thought) wouldn't the net 30 become perhaps net 20? Just saying there could be cash flow implications here. Also, I thought for the net 30 they charge an interest rate % on top of the invoice charge but I can't remember what I was taught the terms were......too long ago. Folks that pay immediately get a slight discount off the invoice amount?
As I recall - Railroad Freight Bills were payable upon presentation, maximum 'credit period' was 96 hours from presentation. That was back in the 70's and early 80's before the effects of Staggers were implemented.
Recall viewing a file of one customer involved in the International brokerage form of the business. At the start of the correspondence about non-payment, the customer was responding on high quality embossed logo stationary - as the conversation continued over a period of months the quality of the stationary decreased to the level of plain paper with the final entry being a hand scrawled note on a piece of school 3-ring binder paper.
CMStPnPAlso, I thought for the net 30 they charge an interest rate % on top of the invoice charge
2/10, net 30? As in 2 % discount if paid within 10 days, net balance due within 30 days?
As far as I know, the 10 day period had nothing to do with actual bank clearing...if your payment check arrived in the vendors office within 10 days of invoice date, you got the discount...so long as your check was eventually good
Convicted One Euclid Why not just ask the boss the reason for suggesting a change in your bank? Well, considering that he was moaning about overdraft fees just 30 seconds prior, I felt it was safe to assume that the former was a "lead in" topic. Thereafter we just had a more honest relationship. Every once in a while he would ask of I would wait a couple days before cashing my check....and since I have a decent cash reserve that was never a problem. I also undestood full well that he had a lucrative business, he was always going to be good for the money, that he just had some eccentric customers who could be problematic in their own manner of affairs. So, getting paid on wednesday instead of monday wasn't the end of the world for me
Euclid Why not just ask the boss the reason for suggesting a change in your bank?
Also, credit cards aren't bad. What's bad is not paying them off every month. Many cards offer great benefits like miles, cashback, etc.
BackshopYou keep thinking that...all the way to the poorhouse.
Well, hopefully it never will get that bad. I'm not exactly sure what part of my post your quoted comment pertains to....but there are checks and balances in place that I use to protect myself.
If an entire pay period lapsed and I still had been unable to cash his check, then I would be forced to re-evaluate my tolerance.
You know it's quite interesting applying this same school of thought to a small railroad defaulting on it's obligations.
I know my boss well enough that I have grown a certain confidence in him. If you were doing business with a marginal shortline railroad, you would have to be comfortable with them before you extended much credit.
And the first time a payment is missed, then you really have to get to know them better...to decide if the future gain is worth the potential risk.
With the railroad, you might get a feeling of security in the knowledge that they have hard assets nailed to the ground...they aren't going anywhere.
Biut then again, if they go belly up there are few things worth less than a railroad that nobody wants to operate.
So the smart egg allows them to fall no deeper in debt to you than you can comfortably manage.
If the boss is worried about the gap between writing the check and funding the account using a different bank would have worked in the 1980's.
Tell him sure, but you want direct deposit and a raise for your troubles.
BackshopAlso, credit cards aren't bad. What's bad is not paying them off every month. Many cards offer great benefits like miles, cashback, etc.
As I see it, if you pay cash, you are subsidizing the credit card industry and users. The merchant pays a fee to the credit card company (3 or 4%, I think). In the early days, some businesses would charge an extra fee to cover this expense if you used a credit card, but if I remember right, someone sued to stop that practice and won. There are also the "rewards cards" that pay you to use their cards. As long as you pay them off promptly, you can actually come out a little ahead with the card.
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"A stranger's just a friend you ain't met yet." --- Dave Gardner
CMStPnPThey project the system will be fully implemented in the next 4 years.
OWwwww! And starting next year you won't be able to buy tickets on a commercial flight without having "real ID" which includes a personal RFID chip in the device...Things are really starting to clamp down.
What's next? "Everything that is not mandatory is prohibited!" I'm glad that I lived most of my life back when real freedom existed
Convicted One, I realize my last post could be considered an argument against your point of view. It is not. Before I got married (late in life), I paid cash for all my cars, two sailboats and my house. Then I got married. Marriage is expensive.
Yes, paying the credit card bill in full each month saves money. Also, when the card company gives a small amount back is helpful. Actually, the customer pays the merchant a little more because the merchant increases his prices to cover what he pays the credit card company.
From time to time, I receive telephone calls inviting me to get a "no-interest" card; I have asked if the company offers a negative rate--and the answer is a click.
Granting the credit card company access to a checking account saves writing checks, just as using direct deposit saves trips to the bank or credit union.
Johnny
CMStPnP....the Federal Reserve announced it was moving to a real time payment system nationwide....
For those interested in national debt figures, I recommend the debt clock:
https://www.usdebtclock.org/
We need another man like Ross Perot.
Convicted One I'm not exactly sure what part of my post your quoted comment pertains to....but there are checks and balances in place that I use to protect myself. If an entire pay period lapsed and I still had been unable to cash his check, then I would be forced to re-evaluate my tolerance. I know my boss well enough that I have grown a certain confidence in him.
I'm not exactly sure what part of my post your quoted comment pertains to....but there are checks and balances in place that I use to protect myself.
If an entire pay period lapsed and I still had been unable to cash his check, then I would be forced to re-evaluate my tolerance. I know my boss well enough that I have grown a certain confidence in him.
The best con men are those that you can "trust". Shady people would never get away with it.
Paul of CovingtonConvicted One, I realize my last post could be considered an argument against your point of view. It is not.
That's OKay man, I didn't feel targeted. The point I was trying to make, that credit amounts to servitude, seems to have flown over everyone's head.
I think in this consumer obsessed society we live in, we've been brainwashed to see indebtedness as an asset....when it is not.
BackshopHe should have a line of credit to cover stuff like that.
In essence, he did. Everytime he asked me to hold onto my check for a couple days, he was borrowing money .....from me.
Convicted OneWhat's next? "Everything that is not mandatory is prohibited!"
Convicted OneI'm glad that I lived most of my life back when real freedom existed
Convicted OneThat's OKay man, I didn't feel targeted. The point I was trying to make, that credit amounts to servitude, seems to have flown over everyone's head. I think in this consumer obsessed society we live in, we've been brainwashed to see indebtedness as an asset....when it is not.
I agree whole heartedly with your premise. In Chicago, there used to be a Talman Savings & Loan that had an advertising slogan about the BOHEMIAN EASY PAYMENT PLAN. Save your money, and then pay 100% cash and NO easy payments. And for the most part, I have lived my life that way. Don't have it, do without. Wanted music, built a Heath kit FM tuner and modified a table radio to play it through. Later built an amplifier and ONE speaker. Then when I could aford it, bought the second speaker. When I got pay raises, one half went into savings and/or stock purchase plan, and the rest into regular expenses. Used aquired stock for a collateralized loan (lower interest rate) to buy our first NEW car. And have never paid interest on anything since except a home morgage. Use credit cards but pay them in full each month. Today, I don't know whether this would be as possible as it was in the 60's. Many companies don't give annual raises. And costs for cellular and internet are more of a burden then we had back then.
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