Is Economic Collapse Already Here?

[SteyrAUG]

Guess what, decades ago it was also hard to get car loans and credit cards.

We saved and bought used. Got "starter" cards when we had steady jobs, which each of my kids have done.

Painfully saved and did without to accumulate a home down payment.

Now, I have about as good of credit as you can get. Great income. Minimal if any debt other than that which makes sense for tax reasons.

Last two cars I bought were used and I paid cash. If I wanted, I could get 2-3 new car/truck loans. But it currently does not make sense to do so. (Sometimes used valuations make buying new better, but usually not)

If people wanted to have cars, they'd find a way to get them.

Sorry for the "get off my yard" moment, but I see many of the current young adult generation just with different priorities and feel their problems are unique. They aren't, it's just their expectations that are different.

Suggested reading:

"Wealthy Barber"
"Millionaire Next Door"
Ben Stein books on getting started with finances. Best explanation of the natural life cycle of individual and family finances, and strategies for each phase.

I can do one better. I'm an established business owner of 20+ years who had 80% down on the home I just purchased and they STILL put me through the ringer and made me jump through about a dozen different and expensive hoops.

I wanted to buy a home flat out and avoid the underwriters and their nonsense but we found the right house, in the right location at the right price. So even though I had personal assets worth three times the cost of the house it didn't matter. I learned working for yourself is basically the same as being unemployed as far as lenders are concerned.

And if you run a business in a fiscally responsible manner where profits are invested into inventory that appreciates rather than in a bank account earning .0001% interest they view that as a loss. I've never brought so much to the table before related to a purchase and you'd have thought I was there shaking an empty cup asking for a handout.

The good news is I should be able to pay off in full in 5 years or less, which will absolutely kill them in lost interest on the loan, so I won't have to deal with them much longer.

[soulezoo]

Good for you. This is what the American Dream is supposed to be. No sarcasm intended

[Doc Safari]

And if you run a business in a fiscally responsible manner where profits are invested into inventory that appreciates rather than in a bank account earning .0001% interest they view that as a loss. I've never brought so much to the table before related to a purchase and you'd have thought I was there shaking an empty cup asking for a handout.

I personally know some old timers who had their credit cards canceled because they paid their balance off every month. If the banks aren't earning interest, they don't want or need your business.

[26 Inf]

I personally know some old timers who had their credit cards canceled because they paid their balance off every month. If the banks aren't earning interest, they don't want or need your business.

I would bet that depends somewhat on how much you use your card.

IIRC the merchant pays the issuer (Bank) a percentage from each transaction, and the credit card network (Visa) gets a set fee for each transaction.

So if I use the credit card to pay the $2.00 for my coffee and donut at the convenience store, the convenience store is going to end up paying, as an example 2% for the bank, and $.10 to Visa as a transaction fee. In this example credit transaction costs the store 14 cents. This may be one reason why the cost of donuts and coffee have risen - the store needs to make a profit after accounting for the credit card transaction costs.

So the bank always gets its 2% per transaction, regardless of whether you pay the card off or not.

I would imagine that if you only used your card to buy a carton of smokes once a month the bank might be losing money on the processing and billing, but most folks don't do that.

If I ran a high-volume store that had a lot of small purchases I think it would pay me to have a separate discount checkout line for cash only. If your average transaction was $5.00 and the transaction cost you 20 cents you could easily make more money by discounting cash at 2%.

Any financial wizards out their to educate us?

[soulezoo]

^^^ you're on point. Saved me from typing the same thing. This is why you see different prices for cash/credit at the gas pump. Average gas station only makes on average about 6% a gallon as it is.

[xjustintimex]

Seeing how e-commerce is crushing the real estate markets I think we will see at least another recession soon. Followed by a shift towards multifamily for millennials, more entertainment, and growth in the food industry to make up for it.

[Doc Safari]

Seeing how e-commerce is crushing the real estate markets I think we will see at least another recession soon. Followed by a shift towards multifamily for millennials, more entertainment, and growth in the food industry to make up for it.

How is ecommerce crushing real estate markets?

[xjustintimex]

institutional lending is basically going away for large retail centers. They are all downsizing and traditional retail centers as we know will need to be totally revamped everywhere. Basically, the only people that will survive the internet are the people adapting into distribution centers and online sales... and things like nail salons and business that do not need to compete with amazon exc.

[FromMyColdDeadHand]

Seeing how e-commerce is crushing the real estate markets I think we will see at least another recession soon. Followed by a shift towards multifamily for millennials, more entertainment, and growth in the food industry to make up for it.

How is ecommerce crushing real estate markets?

Maybe not real estate markets, but real estate agents. No more sitting in their offices looking through books, or randomly driving around. Having said that, I don't think those people are starving. They still get paid way to much for the little that they are left doing. Then there is the whole loan part that is pretty e-commerce intensive.

[SomeOtherGuy]

I personally know some old timers who had their credit cards canceled because they paid their balance off every month. If the banks aren't earning interest, they don't want or need your business.

I had a Citibank card cancelled on me about 12 years ago for that exact reason. Never had a late payment or any fees. No matter, plenty of other companies willing to take my business for the 1-2% net merchant fees they get to keep.

Seeing how e-commerce is crushing the real estate markets I think we will see at least another recession soon. Followed by a shift towards multifamily for millennials, more entertainment, and growth in the food industry to make up for it.

I can see most of this except the food industry growth. It's not my professional field, but what I read is that restaurant traffic is declining and has been for years, and that the grocery business is even more fractional-percent-margin cutthroat than it always has been. What part of the food industry is growing?