Category: Economy

Tipping in the United States has long been a topic of debate, with opinions varying widely among Americans.

The current federal minimum is $2.13 an hour. Seven states require full minimum wage regardless of tipping, and five more states (Michigan, Arizona, Ohio, Massachusetts, and Connecticut) are considering similar measures. Around another two dozen states have minimum wages that are higher than the federal minimum, but not as much as their state’s normal minimum wage.

It is important to note, that if your hourly wage with tip does not amount to the federal minimum wage of $7.25, the restaurant is required to pay the server the difference. I am not sure if there are statistic on this, but I have heard anecdotally that some places do not do this. Though I do not know if it is from either not knowing, or intentionally. (I would guess some of both)

But there is a question we could ask before that. What are the benefits of tipping vs full pay? Is the expectation for tipping every meal one we should stick to?

Is tipping an essential part of the dining experience and a way to reward good service? It can be argued that tipping encourages better service and helps to maintain a high level of customer satisfaction. You could also argue that having a society that encourages tipping might encourage people to be generous all around.

For the first two points, I think tipping can help with both of those. However, I have had bad waiters before, so the possibility of not getting a tip does not end all bad service. I do believe that wanting good tips does encourage many servers to do a good job.

One thing to remember is that if we get rid of obligatory tipping, the bill will likely stay the same. The money you usually put into the tip will not just go into the food price, then be distributed out as payroll. It is possible it could change the price in certain situation, for better or for worse.

Finally, some people make a much better living because of tips. They generally are very nice, hard working people, and they get payed more for it. However, I would bet this mostly happens in semi-nice or nice restaurants.

According to recent data from the Pew Research Center, most Americans believe that they are expected to tip at more places now than in the past, but fewer are actually leaving tips. This indicates a growing dissatisfaction with the tipping culture in the United States. Additionally, a CNBC poll found that most Americans tip 15% or less at a restaurant, with some even choosing to leave no tip at all.

This is all exacerbated by automated prompts for tipping. Every automated checkout station now prompts you for a tip. More importantly, it does not distinguish between when you order some weird complex latte you would tip a barista for making, vs. buying some sparkling water.

Personally, I am leaning toward paying waiters more, and just giving tips to those who do a good job. Because food prices would be higher, it would mean that we would tip less often and in lower amounts. But it might be a good balance.

What do you think? Feel free to send us an email if you have extra thoughts on the matter. (We will include an excerpt in a future email).

The S&P 500 stock index reached a historic milestone last Monday, as it scaled to a new all-time high. This accomplishment signifies the onset of a bull market, by two different definitions. In the past year, the S&P 500 surged by over 20% from its most recent low, and as of the previous Friday, it crossed another key bull market threshold by surpassing its previous peak.

For investors looking to participate in this remarkable growth, there’s good news: investing in a fund that tracks the S&P 500 index is a readily accessible strategy.

However, experts always caution that while the past performance has been exceptional, it should not be taken as a guarantee of future returns. Although the S&P 500 had a stellar year in 2023, finishing up 26% when considering dividends, it might not necessarily be the winning strategy by the end of 2024.

What is the S&P 500 Index?
The S&P 500 consists of approximately 500 large-cap equity stocks. This index operates on a market capitalization-weighted basis, meaning each company’s weight within the index is determined by its market capitalization, which is the total value of all its outstanding shares.

The top companies with the highest weights in the index include Apple, Microsoft, Amazon, Nvidia, Alphabet (with two share classes), Meta, Tesla, Berkshire Hathaway, and JPMorgan Chase.

How Can You Invest in the S&P 500?
Today, investors have various options to invest in the S&P 500, including mutual funds and exchange-traded funds (ETFs) that track the index. Some of the largest ETFs tracking the S&P 500 are SPDR S&P 500 ETF Trust, iShares Core S&P 500 ETF, and Vanguard S&P 500 ETF.

You can access these ETF’s through many apps and website that trade stocks, like Vanguard, Schwab, Fidelity, and TD Ameritrade.

Experts suggest that for stock investors seeking simplicity, this approach can be effective. Over time, passive strategies like index-based funds have demonstrated better returns compared to actively managed funds. Additionally, the costs associated with these passive funds are considerably lower than those of active strategies, making them an appealing choice for many.

The extent of a portfolio’s exposure to the S&P 500 index determines how much its balance is affected by the index’s fluctuations. That’s why experts typically recommend a 60/40 split between stocks and bonds, which can be adjusted to 70/30 or even 80/20 if an investor’s risk tolerance and time horizon permit.

Putting all your investments into the S&P 500 may not be advisable, especially if other segments of the market outperform it in 2024. Most experts advice some sort of split between stocks and bonds. Depending on your age, putting money into bonds may not be the best move.

It is also generally advised to have some diversification into stock categories besides U.S. large-cap stocks. With all of these caveats in place, starting your investing journey with the S&P 500 is not a bad move.

We are not financial advisers. Please do your one research before investing.

At 12, Bella Lin faced a problem: her guinea pigs kept disappearing in her parents’ backyard. Unhappy with traditional cages, she started drawing prototypes to create a better enclosure. When Lin was a senior in high school, she invested using $2,000 from her savings, she launched GuineaLoft on Amazon in November 2022. GuineaLoft took off, selling nearly 11,000 cages and generating over $410,000 in 2023 — an impressive average of $34,000 per month.

After taking a break from GuineaLoft for a while, Lin is back at it. Now juggling academics, extracurriculars, and college applications, Lin spends about 20 hours weekly on GuineaLoft. Her dad’s connection to a Chinese factory helped bring her prototypes to life refining designs, opting for acrylic instead of glass and biodegradable bottoms. Lin manages a six-person team in China, handling product design, pricing, marketing, and overall strategy.

GuinneaLoft gained attention and earning Lin $10,000 in investment funds from BizWorld. The businesses impressive 25% profit margins are all currently reinvested back into the company for growth. Lin has also managed to find a lot of satisfaction from the endeavor. “Witnessing the tangible effects of [GuineaLoft cages] through customer reviews and emails is empowering,” says Lin. “As someone who once placed great emphasis on academic validation, the success … of [my side hustle] has boosted my confidence in navigating life beyond high school.”

Despite the challenges posed by Russia’s invasion, Ukraine’s economy has shown remarkable resilience, particularly in its culinary sector. The country, which experienced a severe economic downturn following the invasion, has begun to stabilize and adapt.

A key element of this economic adaptation is the flourishing sushi restaurant scene. Sushi, which became popular in Ukraine after the Soviet Union’s dissolution, symbolizes the country’s departure from its past and is now a staple for special occasions and holidays. Olha Nasonova, a restaurant consultant in Kyiv and co-founder of the National Restaurant Association of Ukraine, highlights the importance of restaurants in maintaining a sense of normalcy, likening dining out to therapy.

“Being at a restaurant, sitting at a restaurant is almost like psychotherapy,” says Nasonova. “It’s how we feel the normalcy of life when life is not normal around you.”

Despite logistical hurdles, such as Russia’s blockade of Ukraine’s Black Sea ports and initial reluctance from trucking companies to deliver supplies, sushi restaurants have managed to thrive. Serhiy Fedorchenko, a food supply manager in Zaporizhzhia, notes that although importing ingredients like fresh fish, wasabi, seaweed, and cream cheese (a unique addition in Ukrainian sushi) has been difficult, they have managed anyway.

Restaurants have also adapted to infrastructural challenges, such as power outages, by investing in electrical generators and implementing policies to expedite the import of perishable goods like fish. This adaptability extends to restaurant management, where establishments like Island Sushi, managed by Lapshunkov, are attracting employees with higher salaries and incentives. Lapshunkov observes that the increased military presence in southern Ukraine, coupled with civilians’ desire for normalcy, has boosted business.

While the economy continues to be tough, there are some positive movements. The nation’s employers added a strong 216,000 jobs in December, according to a recent government report. This increase exceeded the 173,000 jobs added in November, indicating the resilience of the American labor market despite higher interest rates.

The unemployment rate remained steady at 3.7%, marking the 23rd consecutive month that joblessness has stayed below 4%. However, some details of the report may not be well-received by the Federal Reserve, which is focused on fighting inflation.

Average hourly wages rose 4.1% from a year earlier, up from a 4% increase in November. This uptick in wage growth could make it more challenging for the Fed to slow inflation back to its 2% target. As a result, the central bank might be inclined to delay any cuts in its benchmark interest rate.

Some interesting details are were the jobs mostly came from. According to the Bureau of Labor Statistics, the largest gains were in health care and social assistance. Which gained about 58,900 new jobs. Followed by government jobs (mostly local) which gained around 50,000 jobs. Leisure and hospitality with around 40,000. While retail trade and construction both got around 17,000 respectively.