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The Ultimate Guide to Tipping People

The Ultimate Guide to Tipping People

As a former server in many different types of restaurants, I remember the days when my only source of income was tips. OK, I did get a little paycheck, but at $2 an hour for a server, it didn’t amount to much. Tipping isn’t about bestowing generosity on a person, it’s about being grateful for their service. Whether they cleaned your hotel room — including those nasty hairs in the shower (yeah, I’ve done that job too) — or brought you your meal four times because it was never done just how you like it, it’s important to show your gratitude for it.

Now, because I’ve worked service jobs before and was very, very good at it, I also tend to be very discriminating about the servers I get at restaurants. If you’re going to ignore me or forget stuff, I’ll likely let you know with my scanty tip, but I’ll tell you why. However, if you work hard or are obviously the go-to person for everyone else, you’ll get a very nice tip from me.

As a general rule, don’t ever go lower than the average recommended tip amount. Even if the service is bad, but not nonexistent, you should never tip below that amount. Even the worst newspaper reporters get a basic wage to live on and so should servers. If you received your food, even if the guy who brought it was snotty to you, you should still tip him the bare minimum.

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Not sure if you should tip? Always err on the side of tipping. If you’re wrong, at least you made the effort to show your appreciation.

Bartenders

Bartending is not as easy as it looks, especially when you have a lot of thirsty people wanting strange and innovative new drinks! Generally speaking, bartenders should get 15 to 20 percent of the tab, or 50 cents per soft drink and at least $1 per alcoholic drink. This is true even at your sister’s open bar wedding reception.

Waitstaff

Waitstaff are likely the most underrated, hardest working people in the service industry. And I don’t say that just because I used to wait tables. In addition to only making the bare server minimum, servers are expected to clean restaurant bathrooms, make the salads, clean most of the appliances in the server station, mop restaurant floors, wipe down the tables and do many other chores. And that’s at the minimum server rate, which in most states is about $3 an hour. No tips for that work. Is your restaurant nice and clean? Thank a server. Is your silverware polished and the glassware without spots? Thank a server. Servers should get at least 15 percent of the bill. And if you bring a lot of kids who make a big mess (which I usually do) leave more (which I also usually do).

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Restaurant Host

You are not obligated to tip the maitre d’ or host at a restaurant unless they’ve gone above and beyond for you in getting you a table. If you’ve come in without a reservation or didn’t want the table by the bathroom and they found you another, you can tip them $10 or $20.

Delivery Drivers

For basic service, tip about 10 to 15 percent of the bill. If the delivery was heavy or complicated, it’s nice to tip the extra service accordingly.

Tipping Jars

It’s sits there, looking at you at your local coffee shop or take out place. The tip jar. In an old Seinfeld episode, one of the main characters is wracked over the tip jar, hoping that the person from whom he orders food will see that he’s placed a good tip in the jar — and then, of course, is caught with his hand in the jar when he tries to retrieve the bill so he can be seen placing it in there again. Don’t let a tip jar throw you for a loop. If you just ordered a small cup of coffee and you can spare it, put some of your change in the jar. But you are under no obligation to do so. If you feel like the service is exemplary, tip at your own comfort level.

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Valets, Doorpersons and Bellhops

Generally, valets receive $2 to $5 when the car is brought back to you. Doorpersons get a few dollars for extra — or consistent — service, like hailing a cab, helping you to the car, that sort of thing. Bellhops get a dollar or two per bag, as do Skycaps at the airport.

Taxi Drivers

Assume 15 percent for most taxi drivers and an extra $1 or $2 per bag if they help you. This also goes for limo drivers and bus or shuttle drivers if they help you with your bags.

Salon Workers

Whether they fix your hair, nails or give you a massage, tip those in the salon about 15 to 20 percent of the total bill.

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Hotel Concierge and Room Cleaners

The concierge, if he or she has been very helpful to you, should receive around $20 when you leave. If you stay longer than a few days, this can increase accordingly. Room cleaners should get a few dollars a day as well, depending on just how messy you are. Remember, if you have kids — or teenagers — you may want to leave more in appreciation for not making you clean up after them.

Remember, when in doubt, offer a tip and if you’re not sure how much, always err on the side of a little too much, especially if service was good. Nothing hurts a waiter or other service worker more than knowing they went above and beyond and weren’t appreciated for the effort. However, if you can’t spend more — leave a little note and tell them. This way they won’t feel hostile and will likely understand.

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Michelle Kennedy Hogan

Michelle is an explorer, editor, author of 15 books, and mom of eight.

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Published on November 3, 2020

How to Start Investing Without Taking Major Risks

How to Start Investing Without Taking Major Risks

No one loves risk. This is the uncontested truth about us human beings. We love gaining but never losing. This is not abnormal in any way because human beings exist to increase. Any form of loss is strongly resisted by our brains. This article will teach you how to start investing as a risk-averse individual and get optimal results.

All forms of investing are risky. The only thing we can do is minimize the risk, not eliminate it. This is why every investor needs to tolerate some level of risk. People who do not have any risk tolerance end up not investing at all.

It is important to note that not investing is very risky. This is the greatest risk you can take on your financial future. Being a financial consultant and advisor for years, I have realized that successful people avoid losing possible returns while average people avoid losing investment capital.

This means that successful people work hard to gain what they do not have while average people work hard not to lose what they have. As they say in sports, the best form of defense is offense. As successful people go for what they want, they find it easy to protect their investment.

How to Start Investing Without Taking Much Risk

As I have pointed out, you cannot eliminate the risk, you can only mitigate it. These 5 tips will help you secure the returns while taking minimal risks. It is possible.

1. Get Investment Intelligence

Investment intelligence refers to a set of information that helps you make prudent investment decisions. This is what the greatest investors like Warren Buffet and George Soros have. They can judge different opportunities from an information point of view. With that, they avoid making mistakes that could potentially cost them billions.

As Robert Kiyosaki points out in his book, Rich Dad’s Cashflow Quadrant, investors can be placed in 5 levels:

  • The “zero financial intelligence” level
  • The “savers are losers” level
  • The “I am too busy” level
  • The “I am a professional” level
  • The capitalist level

The first 3 levels, which consist of 90% of all investors, do not have sufficient information to make prudent investment decisions. Many would rather not invest, others will rather put their cash in a bank account, and the rest will choose to delegate the responsibility to someone else and entrust them to multiply their money.

The last two levels of investors have some investment knowledge. They end up becoming the most successful people in the world. As I usually say, making money is not the problem, multiplying it is.

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Therefore, knowing how to start investing without much risk starts with self-education. Read books and blog posts to learn how to reduce the risk involved while still getting acceptable returns. The more you learn, the more you earn. Getting more knowledge will help you look at the numbers and the facts as presented by the numbers.

2. Start Small

It is almost guaranteed that as a new investor, your first investment capital will be lost. This is because you do not have the right information and skills to make a return.

Even though you may have some basics, it takes practical experience and skills to become a successful investor. Therefore, it is prudent to start small. As you make returns and learn, you can increase your investment capital over time.

Do not borrow millions to make an initial investment. This is a grave error many people make. When the investment goes down, they are left heavily in bad debt. First, invest your savings and test your principles of investment. After you have gotten returns, you can now consider risking more and more capital.

3. Diversify

Diversification is usually the first answer given by all financial advisors when asked how to start investing by risk-averse people. This answer is correct. Diversification of your investment portfolio means investing in different asset classes to spread the risk.

There are 2 types of diversification:

  • Inter-asset diversification: This is where you invest in assets from different industries. For example, you can invest in stocks and real estate. These are different asset classes.
  • Intra- asset diversification: This is where you invest in the same asset class. For example, investing in stocks of different companies falls in this category.

Inter-asset diversification is more effective in mitigating risk because it cautions your finances from systemic risks that affect different individual industries. For example, some situations affect the real estate market only. Therefore, if all your assets are in this market, you will be highly affected. If you have diversified to stocks, businesses, precious metals, bonds, etc. you will not suffer major losses.

Diversification aims to have some assets bringing returns even if others make losses. This is a key secret when it comes to how to start investing while minimizing risk.

4. Do Your Due Diligence

Due diligence is different from getting investment intelligence. Getting investment intelligence entails understanding the general principles of investment. Doing your due diligence, on the other hand, entails understanding the facts behind a certain investment opportunity.

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When someone tells you of an investment opportunity somewhere, go after the facts. The facts will tell you whether it is a good opportunity or not. Never focus on people’s opinions when judging different investment options. The best thing is to do your research and justify the claims by the facts. Facts will never mislead.

The best approach is to study the past and project the future. This is called forecasting. Similarly, you can follow what is called scenario planning. This is where you try to understand the future and make appropriate decisions today.

For example, you might foresee that electric cars are going to take over in the future. This way, you will decide to invest long term in car companies that are focused on that area. This is due diligence.

5. Avoid Making Emotional Investment Decisions

Emotional decisions lack logic and rationale. They are not supported by the facts. Emotional decisions are therefore risky. When it comes to making investment decisions, always use logic. This is using your brain rather than your heart.

For example, a friend you love and respect may tell you of an investment idea and ask you to invest. The natural tendency is to comply with their demand. When you bring your emotions here, it will be impossible to resist even though the deal does not favor your financial future.

However, it is better to do what is emotionally incorrect to safeguard your financial interests. Demystify the options and make an informed logical decision.

Low-Risk Financial Instruments

Knowing how to start investing without taking much risk requires looking at different low-risk investment options.

Here are some financial instruments that a risk-averse individual may consider investing in.

1. Treasury Securities

Government financial instruments are less risky. This is because the government can print money to repay its investors. Therefore, the possibility of default is considerably low.

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It is, however, important to understand that these securities yield below-average returns. If you are in your prime age, only invest in them as a diversification tool and not as the main income-generating instruments. Therefore, consider your financial position and make an informed decision.

2. Dividend-Paying Stocks

Dividend-paying stocks are less risky compared to those that do not. Even if the stocks decrease in value, the dividends you get over the years will caution you against actual financial loss.

Therefore, analyze the company in whose stocks you want to invest in carefully. If they do not have a dividend policy that suits your financial needs, move on. Fortunately, many companies pay dividends to their shareholders year in year out. You just need to do your due diligence.

3. Preferred Stocks

Preferred stocks are given priority over ordinary stocks. They are paid after bondholders are sorted. Therefore, in case the company is pushed out of business, preferred stockholders will be paid before ordinary shareholders upon liquidation of the company’s assets.

4. Fixed Annuities

A fixed annuity is an insurance contract that pays the holder a guaranteed interest rate on their contribution. The opposite is called variable annuities.

The great thing about fixed annuities is that they are simple and predictable. There’s no need for you to learn about the stock market changes since you know what to expect based on your agreement.[1] Fixed annuities are guaranteed. They are paid as long as the company is in a position to do so.

5. Money Market Accounts

These are interest-bearing accounts provided by financial institutions. They pay a higher interest rate than the normal savings accounts. These accounts have insurance protection and are therefore less risky.

6. Corporate Bonds

This is a financial debt security that is issued by a firm and sold to investors. Bondholders receive a fixed or variable interest on their investment and receive their investment capital upon maturity. These are low-risk instruments especially if the issuer is an established firm in the market.

7. Certificates of Deposits (CDs)

This is a type of product offered by many deposit-taking institutions. They offer premium interest rates on deposits as long as the customer agrees to leave the money untouched for a certain period.

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8. Value Funds

Value funds follow the value investing strategy used by famous investors like Warren Buffet and Benjamin Graham. It involves identifying shares that are undervalued and putting money in them.

Value funds are low risk because they are sold at a discount. They later bring returns when the market undergoes an auto-correction. However, it takes skilled managers to identify undervalued stocks.

Word of Caution

So far, we have looked at how to start investing without taking major risks and the instruments to invest in. It is also important to give a word of caution on the same.

1. Let the ROI Outdo the Inflation Rate

Inflation is a persistent increase in the prices of commodities. It serves as a measure of the changes in the prices of commodities and services over a period of time. Inflation impacts the cost of living and eats into the purchasing power of money.[2] If your return on investment (ROI) is less than the inflation rate, you have lost economic value.

2. Consider Opportunity Cost

Opportunity cost is the value of the foregone alternative. If you have different investment options, calculate the ROI, and invest in the option with the least opportunity cost.

3. Consider Your Financial Position

Where you are in terms of finance should determine the kind of investment option you choose. People who are just starting should seek both returns and security. If your investment is wiped out, you will have little left to lean on.

People who are established financially can afford to take major risks. After all, when they lose the investment capital, they have enough to fall back on.

4. Consider Your Financial Goals

People have different financial goals. Some want to be very wealthy, while others just want to live a comfortable life. Choose your investment options carefully based on your goals. People who want to be super successful should seek to maximize ROI.

Final Thoughts

As we have seen, it is impossible to eliminate risks. The best you can do is to mitigate them. Therefore, tolerate a certain amount of risk to guarantee better returns. By following the tips in this article, you will learn how to start investing while significantly reducing the risks involves as you focus on the reward.

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Featured photo credit: Chris Liverani via unsplash.com

Reference

[1] Annuity.org: Fixed Annuity
[2] Financial Express: What is Inflation?

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