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Changes announced to U.S. Banking System, will railroads be impacted?

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Posted by jeffhergert on Saturday, August 17, 2019 2:23 PM

Electroliner 1935

 

 
Convicted One
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.

 

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.

 

I was talking with the wife last night about some of this.  So many things now seen as necessities today, telephone (land or cell), internet, etc were considered luxuries not all that long ago.  

Credit also allows people to keep a certain standard of living as those people's means of otherwise maintaining that standard erode away.

On the other side of the railroad cash flow coin.  We used to be able to have a tank truck refuel engines that were low at the away from home terminal.  The vendor there will no longer supply us fuel, the company got behind in payments to him.  Which to me seems unusual.  Not because it's a multi-milliondollar company, but because of what other vendors have said.  That the first payment is slow in coming, but after that payments for supplies or services are more regular.

Jeff   

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Posted by Semper Vaporo on Saturday, August 17, 2019 1:59 PM

Backshop
 
Semper Vaporo

 Convicted One

{snip}

So, getting paid on wednesday instead of monday wasn't the end of the world for me

Just the opposite of those folk that fall for the direct deposit to the debit card company that says "You get your money two days sooner" (and what the ad does not say, 'you run out of money 2 days sooner', too)!  

Why would you run out of money?  

Same reason the ad says people run out of money and need their paycheck 2 days earlier.

Semper Vaporo

Pkgs.

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Posted by Juniata Man on Saturday, August 17, 2019 1:39 PM

To answer CStP&P’s question; if a rail customer has established credit with a particular railroad, payment terms generally are 15 days from issuance of the invoice.  In 40 years of dealing with railroads; I never once encountered one that offered a discount for early payment.

Without credit terms; rail service will almost certainly be of a prepaid nature meaning nothing will happen till the railroad has received payment for the shipment you wish to move.

Most railroads now will strongly encourage a new customer to set up an electronic means of payment.  In the past 20 years with two different employers, I’ve not seen a check used to pay a rail freight bill.

I doubt the banking changes proposed will have much impact on receivables owed to a railroad.  It may impact railroad payables to their vendors but; I imagine railroads have already extracted very favorable payment terms from most of their vendors anyhow so; having a check clear overnight likely isn’t going to cause a railroad CFO to lose sleep.

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Posted by Backshop on Saturday, August 17, 2019 1:23 PM

Semper Vaporo

 

 
Convicted One
 

{snip}

So, getting paid on wednesday instead of monday wasn't the end of the world for me

 

Getting paid 2 days late just means you have your money two days longer! Big Smile 

Just the opposite of those folk that fall for the direct deposit to the debit card company that says "You get your money two days sooner" (and what the ad does not say, 'you run out of money 2 days sooner', too)! 

Why would you run out of money?  

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Posted by Semper Vaporo on Saturday, August 17, 2019 1:16 PM

Convicted One
 

{snip}

So, getting paid on wednesday instead of monday wasn't the end of the world for me

Getting paid 2 days late just means you have your money two days longer! Big Smile 

Just the opposite of those folk that fall for the direct deposit to the debit card company that says "You get your money two days sooner" (and what the ad does not say, 'you run out of money 2 days sooner', too)!

 

Semper Vaporo

Pkgs.

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Posted by Electroliner 1935 on Saturday, August 17, 2019 12:53 PM

Convicted One
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.

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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Posted by zardoz on Saturday, August 17, 2019 12:43 PM

Convicted One
What's next? "Everything that is not mandatory is prohibited!"

And the obverse, "Everything not prohibited is mandatory". Similar to, "Progress is always change, but change is not always progress".

Convicted One
I'm glad that I lived most of my life back when real freedom existed

If the next generation grows up in a world not beset by a climate and/or economic catastrophe, they will nonetheless never experience anything close to what you and I consider basic freedoms. However, now all we have is the illusion of freedom; an illusion both created and promoted by those in power.

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Posted by Convicted One on Saturday, August 17, 2019 12:32 PM

Backshop
He 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.

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Posted by Convicted One on Saturday, August 17, 2019 12:24 PM

Paul of Covington
Convicted 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.

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Posted by Backshop on Saturday, August 17, 2019 12:20 PM

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 was referring to the part about late paydays.  If his cashflow is that poor, that means the slightest little blip and he's out of business.  He should have a line of credit to cover stuff like that.

The best con men are those that you can "trust".  Shady people would never get away with it.

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Posted by Paul of Covington on Saturday, August 17, 2019 12:17 PM

   We need another man like Ross Perot.

_____________ 

  "A stranger's just a friend you ain't met yet." --- Dave Gardner

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Posted by zardoz on Saturday, August 17, 2019 12:15 PM

CMStPnP
....the Federal Reserve announced it was moving to a real time payment system nationwide....

Could this have something to do with the insane national debt?

For those interested in national debt figures, I recommend the debt clock: 

https://www.usdebtclock.org/

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Posted by Deggesty on Saturday, August 17, 2019 12:07 PM

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

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Posted by Paul of Covington on Saturday, August 17, 2019 12:05 PM

   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.

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  "A stranger's just a friend you ain't met yet." --- Dave Gardner

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Posted by Convicted One on Saturday, August 17, 2019 12:00 PM

CMStPnP
They 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

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Posted by Paul of Covington on Saturday, August 17, 2019 11:56 AM

Backshop
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.

   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.

_____________ 

  "A stranger's just a friend you ain't met yet." --- Dave Gardner

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Posted by rdamon on Saturday, August 17, 2019 11:38 AM

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.

 

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Posted by Convicted One on Saturday, August 17, 2019 11:37 AM

Backshop
You 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.

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Posted by Backshop on Saturday, August 17, 2019 10:59 AM

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

 

You keep thinking that...all the way to the poorhouse.

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.

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Posted by Convicted One on Saturday, August 17, 2019 10:56 AM

CMStPnP
Also, 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

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Posted by BaltACD on Saturday, August 17, 2019 10:47 AM

CMStPnP
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?

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.

Never too old to have a happy childhood!

              

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Posted by Convicted One on Saturday, August 17, 2019 10:43 AM

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

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Posted by Convicted One on Saturday, August 17, 2019 10:29 AM

York1
I 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?  Devil

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Posted by Euclid on Saturday, August 17, 2019 10:22 AM

Why not just ask the boss the reason for suggesting a change in your bank?

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Posted by CMStPnP on Saturday, August 17, 2019 10:22 AM

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?

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Posted by Convicted One on Saturday, August 17, 2019 10:21 AM

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.   SoapBox

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Posted by York1 on Saturday, August 17, 2019 10:18 AM

Convicted One
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?

 

I think Balt and Hebdo are right.  There's only one reason your boss would want you to do something like that.

York1 John       

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Posted by charlie hebdo on Saturday, August 17, 2019 10:08 AM

It all sounds pretty shady. 

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Posted by BaltACD on Saturday, August 17, 2019 9:59 AM

Convicted One
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?

That would tell me - "I need to look for a new employer - NOW!"

Never too old to have a happy childhood!

              

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Posted by Convicted One on Saturday, August 17, 2019 9:23 AM

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?

 

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