Despite growing up in Canada for more than half of my life, I have never gotten used to tipping. You see, tipping is not a common practice in Taiwan.
Tipping is also not common in Denmark. So whenever Mrs. T and I are asked to tip, we usually end up questioning whether it is really necessary and wondering how much we should tip.
We get it, restaurant servers are getting minimum hourly wages, so they rely on tips. Years ago, the customary rule used to be to tip 10-15% when eating at a restaurant. Nowadays, that range has increased to 15-20%, some places even expect you to tip 25% or more.
Imagine going out with a group of people and having to tip 25% on top of a $200 bill!
I’m fine tipping when I get decent service but I get annoyed when I’m “expected” to tip.
For example, we went out for a large family dinner at a local restaurant a few months ago. Since we had 19 people for the dinner, I knew the large group service charge would be automatically tagged on. I was not a happy camper at the end of dinner service because of the following:
- When we arrived at our table, the server told us that water pitchers were set aside and we had to fill up our glasses ourselves. The server did not refill our water at all for the entire dinner
- The server took our orders and the cooks bought our food out. We basically didn’t see the server for the rest of the evening
- The water pitchers were completely empty about halfway through our dinner. They weren’t refilled until we made several requests (the manager ended up refilling the pitchers)
- There was a 20% group service charge on our bill, the 20% tip was calculated on the total amount
Yes, the cooks and the kitchen staff rely on tips too, but for me, the quality and quantity of service throughout this particular dinner was extremely underwhelming.
You tell me, was I justified to be outraged about the 20% mandatory tip for this dinner?
CBC pointed out that the suggested gratuity on some point-of-sale terminals is getting higher and higher. The article found that some places even have a 30% tip as one of the suggested tipping amounts. Furthermore, it’s not just restaurants that have the suggested tips. The suggested tips have been showing up at more and more service places.
While at the UBC Apple Festival last weekend, we got a cup of latte from a food truck cafe. Not surprisingly, I was presented with the suggestion tip options of 15%, 20%, 25%, and no tip before finalizing my transaction.
I selected the “No Tip” option.
Before getting our cup of latte, I saw about 15 parties paying for their orders (there was a long line). I observed that most people selected the 20% option. I counted four people who selected the 25% tip option. Other than me who selected the no tip option, only one other person selected this same option.
Am I too cheap to not tip for a cup of coffee?
Is tipping 20-25% on top of a $5 cup of latte ($1 – $1.25) a standard practice now?
This brings up the first important question:
When do you tip?
People typically tip at restaurants, barbershops, takeouts, food deliveries, and taxi services.
Do we now have to start tipping everywhere because of the low employee hourly salary?
- Grocery stores (i.e. cashiers & baggers)
- Garbage pickup
- Mail delivery
- Fast food places
- Cable/phone technicians
- Teachers & sports coaches
Finally, the most important question – do you tip on the total bill or the amount before taxes?
Do you think tipping is completely out of control here in North America?
Sorry for this rant!
Good reads from the PF community
Here are some personal finance/investing related articles that I enjoyed reading.
Mike at The Dividend Guy explained why cash from operations is very important for dividend paying stocks – “Think how your bank account fluctuates from month to month. Most of the time it is clearly stable. If you’re making more money than you spend, you will see your bank account (or savings) grow gradually. Then life happens, and you need to replace both your refrigerator and your dishwasher at the same time (true story, happened to me this month!) your cash flow is all over the place. This teaches us, once again, that a single metric can’t explain everything.”
AI has come a long way. Preet Banerjee asked if you can tell which video clips are real and which ones are generated by AI. Why is this important? Because we need to be aware that AI can be used for financial scams. We need to stay vigilant in the new digital age.
MiniHabits explained why tomorrow is not your friend – “Tomorrow is not only a blank slate, but an unknown slate. You might wake up with a headache, an unexpected appointment, an emergency, or a really lazy mood that laughs in the face of 4 cups of coffee. If I have one cup of coffee, I will involuntarily run a marathon, but that’s besides the point. When the allure of “doing it tomorrow” makes you procrastinate to eat healthy food, clean your kitchen, file your taxes, and call your grandma, among other important things, what do you think happens after 10 or 20 years of doing it? What do you have?”
Speaking of patience, Craig at Retire Before Dad emphasized that having patience in today’s impatient world is vital for investing – “More than 90% of my net worth is in traditional assets like stocks, bonds, cash, and home equity. I reserve less than 10% of my portfolio for alternative investments and speculation (e.g., real estate crowdfunding, venture capital, and IPOs). But that 10% of assets takes up most of my investment research time. That partly stems from my general curiosity for alternative investments — which are also popular blog topics. I still monitor the individual stocks in my portfolio and don’t regret buying them. But I have a long-term outlook for the portfolio and rarely act upon it because of news or earnings reports. Diversified boring investments like index funds and ETFs require occasional rebalancing. But otherwise, you can set and forget them.”
Fritz reminds us that patience is very important. For me, this is a great reminder given that we’re getting closer to having enough dividends to cover our living expenses.
About to retire? How do pre-retirees plan for retirement budgeting? Ask the Money Coach have some tips for pre-retirees – “The key to a successful retirement is understanding and managing your expenses, assessing your income sources, creating a realistic budget, and making informed financial decisions. In this article, we’ll cover all of these topics and more. By the end, you’ll have a clear roadmap to help you navigate the financial aspects of retirement with ease. So, let’s get started! But before we do, take a moment to envision your ideal retirement. What does it look like? Whether it’s traveling the world, indulging in your hobbies, or simply enjoying quality time with loved ones, having a clear vision of your goals can provide you with the motivation you need to make smart financial choices. With that in mind, let’s explore the first step in retirement budgeting: understanding your expenses.”
Nelson interviewed Jim, a fellow Canadian dividend investor who retired early with a $3M portfolio generating $120k per year. There are some really great lessons in this interview – “I want my stocks to go up. Like we’ve talked about, underlying earnings are what matters, and when I look at stocks I’m trying to see how earnings go higher. I want growth. Everyone should want growth. But when I screw up and that growth doesn’t happen, then I at least know I’m protected by that dividend. Paying out those earnings to the owners also makes sure management doesn’t do anything stupid with the money — like most share buybacks.” Jim is certainly on a similar path as Reader B who received $360k in dividend income a year only a few years ago (this number has since increased thanks to organic dividend growth).
Andre Hallam’s recent article called Why this is Europe’s favourite retirement destination caught my eye, especially considering Mrs. T and both kids have Danish passports and it’s not as easy for me to get Danish residency – “Portugal might be the most popular country in Europe for retirees on a budget…a lower-cost route A D7 Residency Visa, also known as a Retirement Visa or a Passive Income Visa. Compared to the ritzier requirements for the Golden Visa, the D7 is more like a McDonald’s Value Meal. According to Atlantic Bridge Consulting & Investment, the D7 Visa requires a passive income of about €9000 a year; a minimum €9000 deposit into a Portuguese bank account, and a clean criminal record.“
Speaking of living abroad, Nomand Numbers recently became a permanent resident in Taiwan and wrote an excellent article on how to become a permanent resident in Taiwan. Taiwan remains a great place for retirees due to the low cost of living compared to North America. It also has excellent healthcare. We have always thought about moving to Taiwan for a few years once we’re financially independent – “The APRC application process is quite straightforward and doesn’t necessitate the involvement of a third-party company if you’re familiar with the requirements. If you meet the qualifications for the Gold Card, you can obtain an APRC in just 3 years. Gold Card holders enjoy an expedited application process (3 years instead of 5) and are eligible for the foreign professional APRC, which is the most generous option available in Taiwan. This particular APRC only requires you to be in Taiwan for one day every 5 years.“
Have a great weekend everyone!