50/50Farms
Well-known member
I've yet to see a blender that big...
Making money in cattle!
- Thread starter kenny thomas
- Start date
Help Support CattleToday:
kenny thomas
Well-known member
Don't deal with CH Cattle. Nothing wrong with it but I don't like the idea of taking calves to a place and the price being take it or leave it. I like several buyers being there.
You know the penhookers are going to lowball the price. Plus most of the time they have a buyer inside that's sharing in the profit so they have more control on the price.
Nope. When I choose a bank or credit union to let them give me a line of credit, than I an their customer, I am their boss, not an employee. I give them an opportunity to make money off of interest. And I actually, I am not the one getting the credit line...it is one of my S corps. Don't ever let them treat you like they are doing you a favor
Yes, that is the key. I may want to buy a bunch of cattle for $100k. I probably have that much or more in several accounts. I may have $500k in an account for cattle. Don't matter, I write the check on a credit line account, and leave MY money alone. When I do whatever I bought them for, say to resell, then when I sell them, I have the buyer pay whatever S corp, and the S corp pays back the credit line.
Mathematically, your balance sheet still says it's your money. You didn't fool any one.
OPM is "Other People's Money".
When I went to talk with my current banker for the first time a lady came out sat me in the lobby and gave the wife and I credit apps. I told the wife not to fill them out. When we walked in his office he smiled at me and ask why I wouldn't fill out the paperwork out. I told him this is supposed to be a partnership and we need to talk about what he can do for me before I fill any paperwork out. He actually got excited and talked to us for an hour. This is a small bank in a town of 5,000 people too. We have a good relationship now. I am definitely not his employee, he helps me I help him...that's the way it should be.
There's a place called a salebarn that can turn 20 truckloads into something small enough to fit in a shirt pocket on any day but Sunday.
So you have $500K in a bank...
They lend you $100K at 5%...
You think you are paying to use some one else's money
They lend you $100K at 5%...
You think you are paying to use some one else's money
No. you pay it to protect YOUR money. Say 1 of my S Corps borrows $100k . And say that deal it borrowed money for goes belly up. MY personal assets nor my other companies' assets can be taken. I can bankrupt that company, if I choose, or I can loan that company some of MY money to pay it off. But if I don't want to do that, the bank can not go after my personal money. Yes, I am paying to use the bank's depositors' money ( including mine).So you have $500K in a bank...
They lend you $100K at 5%...
You think you are paying to use some one else's money
That 5% would be $5k a year, if you used it all year. Most of the time when I get money to go to a sale, or buy a herd from someone, I probably already have them sold. So I may pay interest from a couple of days to a few weeks. The last couple of herds I bought , the person sent me the money ahead of time, so that is really using OPM!
No. You should meet with an attorney.
I think that part goes without saying. What Warren is saying is the way 99% of businesses and business people operate. If you think anything different your fooling yourself. Elon Musk was worth around $300 Billion when he bought Twitter for $44 Billion. He borrowed the bulk of that money and was considering bankruptcy rather quickly. Hopefully he's got it straightened out now.
Not even close to the same.
50/50Farms
Well-known member
Well, there's more than one way to skin a cat, whatever he's doing seems to be working for him.
So you think the majority of businesses operate on a cash only basis? No operating, inventory, or construction loans?Not even close to the same.
Owning Cattle is a business or a hobby for people. If you treat yours as a hobby I can understand why you disagree with people that treat theirs ar a business. Mine have to make money, they are part of a bigger picture. They've been paid for for several years now but I'd borrow money against them tomorrow if it would benifit my operation.
Jeanne - Simme Valley
Well-known member
I owe noone. But, I keep a line of credit with Farm Credit. If something comes up (like a good deal to buy something), I just call them and they transfer $ to my checking account. Quick, immediate cash. I don't know about most of you, but I do not keep all my money in my checking account!
kenny thomas
Well-known member
I have a line of credit also as you state just in case I run onto a bargain.
You are running down a rabbit hole that has nothing to do with what Warren said and nothing to do with my response.So you think the majority of businesses operate on a cash only basis? No operating, inventory, or construction loans?
libertygarden
Well-known member
What that sayin, "when you owe the bank $1 million, the bank owns you. When you owe the bank $100 million, you own the bank."
