Author Archives: George Boelcke

20 Is the New 15 In Restaurants (And Walmart?)

Part of our run-away inflation is that we’re going to restaurants again – a lot! But servers are making less money than ever while working harder, and it’s something you didn’t know.

While your only contact is pretty much your server, behind the scenes are bartenders, hostesses, bussers, runners, kitchen staff and others who you aren’t tipping. Since you’re not coming into the restaurant with a wad of five dollar bills to hand out, those staff still do get a part of your tip. Different restaurants do it in different ways, but the most common in the industry is called tip-out. It’s a tip distribution system that does get some of your tip money to those other staff who are instrumental in making the server look good and able to function. In most restaurants and chains, their indirect tips have increased in the last few months when the restaurant increased the tip-out amount to a range of six to eight percent.

To translate that into English: A server who rings out (collects) $1,000 during their shift pays the restaurant an additional 6 to 8% over and above that. So they’re responsible for turning over $1070.00 if we use 7% as a tip-out. The server has collected a bunch of credit card charges, some gift cards, some cash, and tips. At the end of the shift, the computer adds up all of the charges for food, drinks, etc. that were charged to his or her swipe card (account) to come up with the total amount plus the added ring out. Whatever is left over is their real tip income for the shift. The seven percent is then distributed to those bartenders, hostesses, bussers, runners and kitchen staff (depending on how the restaurant has the people and the distribution percentages set up).

Since that tip-out has increased, it’s decreased the servers income unless you make 20 percent the new 15! They’re sharing more – keeping less. A $1,000 total for a server may generate 15% tips…but not likely since some tip less, others don’t tip at all! But let’s use 15%: The server has collected $1,150 and pays the restaurant $1,000 and the 7%, or $1,070. That leaves $80, or an actual tip of 8%! On an average 20% tip (oh how servers wished that were the case) the actual take-home amount would be $200 in tips, less the 7% ring-out or $130 net (13% of the customer bills total). So now you know…and now you have to decide the next time you’re eating out!

Walmart somehow also seems to think 20 is the new 15. But that’s not a good thing in the retail business. Again, lots of products have gone up in price. But not 25%! Like Covid and the Russian invasion of Ukraine (see the story from last week) became reasons to lie or use as excuses, it makes me wonder if retailers aren’t using this time to move up their profit margins under the radar…

There are lots of examples, but here’s my most obvious one. Once a year I buy a new pair of the least expensive jeans I can find. They’re for outside work season from painting to kneeling on the garage floor, or in the yard, and don’t last more than a year before I replace them. For a few years, that’s been Walmarts’ $15 jeans. These cheapest jeans I can find are $20 this year. No way – no how – no chance I’m paying that. Has Walmart’s long-standing campaign of “roll-back” pricing turned to “roll-forward?” It isn’t the price of denim, or any improvement in quality, or that much increase in freight costs….I’m sure they can still fit a few hundred thousand into each container leaving China…. But, judging by the empty racks, I’m very much in the minority in not swallowing a 25% price hike. Sad but true…

Why Overpay THAT Much?

Loyalty is always a two-way street when it comes to the brands and the products we buy.

With some of the insane (and unjustified) price increases so far this year, loyalty to any one product can shred your wallet. That’s entirely unnecessary when there are normally substitutes that are just as good! I would estimate that there must be almost a dozen items that I’ve changed since the start of the year because of price increases of over 25%. Sorry, that’s not inflation – that’s taking advantage of the “everything is going up” resigned attitude to stick it to me.

Other items have always been less expensive, but brand-name companies know how loyal we are. Here’s a great example: I was loitering in the pharmacy area of Walmart two weeks ago waiting for a prescription. At the end of the aisle (companies pay for that prime spot) was a sale on Tylenol.

Costco 390 tablets for $22.99 = $0.059 per

While I stood there for about 10 minutes, at least a half dozen people walked by and grabbed one of the packages. Yet, right beside these, just not on the end-aisle were the no-name acetaminophen. Same product without the brand name!

Costco Kirkland Acetaminophen 500 tablets down to $0.016 per

They’re almost 350% cheaper! Yet nobody reached the two feet further to save three and a half times the money! No, that wasn’t very scientific, but it sure got me wondering where else we buy something blindly because of loyalty instead of checking the price!

For comparison, assuming it has to be Tylenol for some specific reason, here are the Walmart and Rexall prices from the same day:

Walmart 200 pack at $0.09 per Rexall 200 pack at $.135 per

While not everyone has a Costco membership, their no-name at 1.6 cents per compared to Rexall at over 8 times as much is a reason to re-think your brand loyalty, to shop around, and to consider a Costco membership (because half of it would have been paid for with this one purchase).

It’s Grad Season

Happy May to the two types of graduates: Those who are graduating from high school, and those graduating from university.

If you’re now entering the work force, your life is going to be radically different. If you’re still living at home, you’ll now have money coming in with only a limited number of bills to pay. If you’re also moving out of the dorm, or your parent’s home, the bills can quickly to exceed your income. That could likely make you more broke than you’ve been BEFORE you started earning a paycheque.

If you were to be honest with yourself, you’ll admit, at least to yourself, that you stopped listening to your parents advice quite some time ago. Bad news: You’ve now got very little time to get your financial house in order. More bad news: You (and most of the country) isn’t really financially literate. Even more bad news: You’ve got a ton of pent-up wants and needs that you’re going to purchase with little money. And the worst news: Your income, and the fact that you have a small credit rating, lets you borrow.

With rent, a car payment, some utilities, your cell phone bill, credit card payment, and needing to eat, I’d bet most of your 2019 paycheques are spent. Yes, you read that right: Those debts have payments that aren’t going away anytime soon because you have a two-year cell contract, do need to live somewhere that charges rent, and have a car payment until 2031 or longer.

Adults can take a long time to go broke. Graduates often accomplish that in just a few months. When you get there – you can’t get out for a decade or longer. Ask anyone in their 30s what they’d do differently with their finances if they could be your age again.

Maybe somebody in your family will go to Amazon (the link is on my website) and invest the $20 to gift you the Money Tools and Rules book. You can read a few of the chapters in an hour or less. Read the “Broke is the new rich” chapter. That’ll explain how that doesn’t need to be your life. Read the chapter on specific things to do or not do for just one year after you graduate, and the how to buy a vehicle chapter. Since you have a credit card, read those 30 pages to see how they become your worst nightmare no matter what their ads tell you.

Knowledge is power. You learned that in high school or university. However, your financial learning is just starting, and this is one lifetime course you definitely can’t afford to fail.

Ford’s $5 Billion Dollar Bet Pays Off This Week

Today (Monday 4/25/22) Ford will deliver it’s new F150 Lightning. It’s an electric vehicle that’s part of Ford’s $30 billion electric vehicle spending to 2025. If you’ve heard about it all weekend, it’s because Ford is taking the marketing approach of Tesla for the rollout and the first delivery.

Nothing matters more to Ford than the F150. It’s not only the largest selling truck, with brand loyalty more so than the entire Ford name. Buyers of the F150 are incredibly loyal. They don’t trade for a Ram or a Chevy, they tend to be loyal to F150, often for generations. The release of the F150 Lightning this coming week is a bet that’s already paid off for Ford. Their original projections (and production plans) were for 40,000 vehicles. Their order-bank is already at 150,000 and growing and the reviews have been beyond anyone’s expectations.

Yes, it’s electric. If you were someone who made fun of (or envied) the little Prius you passed on the highway with its 50 MPG, this Ford truck – yes, a work truck – will have a EPA rating of 68 MPG. An electric truck rated at 68 MPG! Sure, lots of people and businesses, to whom this truck is targeted, will still have range anxiety and may wait and see. But it might not be for long with the obvious gas cost savings and lowest cost of ownership of any Ford truck. Plus, “it hauls ass and tows like a beast,” according to Ford CEO Jim Farley.

A 15.5″ touchscreen and 11 outlets that can power anything and everything on a job site – and can actually power your house for three days in the event of an outage! In North America only around 5% of vehicles are electric. That’s less than a quarter of Europeans, but the F150 Lightning might be a real game-changer.

Blame It On the Rain

That was the name of a song by a late 80’s R&B duo called Milli Vanilli. It turned out that they were just lip-synching – including their appearance at the Grammy Awards. In the worlds of one of the group “we were in constant fear of being discovered.”

The group didn’t last, but the blame-game and flagrant misleading (OK, lying) is alive and well. It happened within a month of the Covid pandemic in March of 2020 with a lot of businesses blaming Covid for anything and everything.

Within 10 days of the Russian invasion of Ukraine, US President Biden was blaming rising gas prices on Russia calling it the “Putin price increase.” It’s total b.s. and a poll done last week showed that less than six percent of respondents blame Russia, but the line keeps getting used. Oil was already around $90 a barrel before the war, then went to around $100. Nice try, President Biden. But someone has to be blamed when people get mad.

Politicians have no control over oil prices or supply chain issues. They also don’t have control over the weather tomorrow – honestly! Sure, in the US, voters can blame President Biden for not even getting his calls answered or messages returned by the Saudi government for weeks at a time. Oil is a world-wide commodity. The only way the price drops is when the supply exceeds the demand as every person would have seen in the past two years. Cut the demand of any product and the price drops. Increase the demand without more product and the price jumps until equilibrium is reached again. Economics 101.

But whichever party is not in power blames the current administration and claims they would deal with this. You know it’s b.s. when they don’t actually tell you anything about how they would do that. Yet it works. The current party blames someone – anyone while the opposition blames the government.

Milli Vanilli may have been in constant fear of being discovered, but sadly, businesses and politicians don’t have those same morals when it comes to blame, excuses, evading responsibility or the likes. Stuck in between are the voters who don’t really care who is to blame, but care a lot that it’s addressed. Or at least that someone understands.

How to Complain to Get Results

As I’m now in the middle of a bunch of problems with Amazon, it occurred to me that most people don’t really know how to complain effectively. Oh, sure we complain, but you need to do it in a way that the business will help you, refund you, fix the issue, or even just pay attention to you.

We typically call the 800-no service number and get mad. And after we give them a piece of our mind, we often end with “I’ll never deal with you again.”

What’s the point of working to make you happy just to have you deal somewhere else?

If a relative needs help with something, would you? Of course! You know them, like them, they say please and thank you, they’re grateful and you feel great that your time and talents made a difference to someone. THAT is what you need to remember when you call the 800 number. You’re dealing with someone that will take 50 to 100 or more calls in a shift, makes maybe $15 an hour, has supervisors pushing to deal with stuff quickly, and has been talking to mad people, many of whom lie, for six hours already.

Always stay calm, don’t raise your voice, don’t threaten, stick to the facts, and start with a one-sentence statement of what you want. Say please, and be pleasant, and tell the person you really appreciate them helping you. That will solve 75% of your issues. Do write down the date, time, and name of the person you’re speaking to.

Step two is to escalate the matter if you’re running into a brick wall of no help. Find a vice president of customer service, marketing, your bank’s regional manager, or whatever area your complaint falls under. Go online or ask one of your kids to do it for you. You want the contact information for a regional manager or vice president. The CEO isn’t calling you back, but one or two levels down, that person will pass your SOS request to someone that WILL fix it for you – guaranteed.

Send an email or a letter – one page tops. Again, write what you’d like at the top, remind them how loyal you’ve been and how shocked you are that such a great company hasn’t fixed this for you. Include the dates, times, and who you called already, with no results. I’ll guarantee you’ll have someone get in touch within 24-hours!

With Amazon, I found the email for the Canadian VP on Linked-in. The next day I had $60 refunded on my seller account, and someone from his office on the phone.

With my cable company, and the world’s slowest internet, the Vice President’s office had a “special issues” incredibly helpful supervisor call me from their BC office the same day, and a technician was at my house the next morning, with a follow-up visit, and a call every week to see how my internet was now performing.

Stay focused, factual, calm, and nice and you’ll get what you deserve. You really do catch more flies with honey than with vinegar.

My $20 Trip Halfway Around the World

OK, so it wasn’t me that traveled from India to Canada, just my two canvas prints. If you have any doubts as to how interconnected our world is, and how critical global shipping, and thus the supply chain for almost every company, this trip is a great indicator.

Two weeks ago I talked about having to order two canvas prints online because I couldn’t get close in price attempting to shop local. Just scroll back a bit to find the story. Fast forward to last week when Fedex delivered the prints. I had purchased from CanvasChamp (Scarlet Prints LLP) previously, so I was familiar with their pricing, hit and miss customer service, the need to look online for coupons and discounts not found on their home page, and that their production is done in India with websites in the US, Canada, Australia and pretty much most countries making you think you are, in fact, buying sort-of local.

Since Fedex was late in their delivery, it was purely by chance that I tracked my order with them. That was worth it – and quite the eye opener!

Yes. You’re seeing seven stops covering half the world for my 4 kg (9 lb) 77x77x5 cm (31x31x2 inch) package: From their plant in Ahmedabad, GJ, India to Mumbai, India 524 km. Then 1934 km to the Fedex hub in Dubai, Arab Emirates and on to their main Europe hub (Somma Lombardo) in Italy – another 6083 km stop-over. From Italy, my well-traveled order went to their US Hub in Memphis 7894 km and then onto Richmond, BC, Canada (2508 km) for the last customs clearance before the 7th flight of 1156 km to Edmonton International Airport, and an old Dodge Caravan from there to my house.

A trip of more than 20,000 km (almost 12,500 miles) for an order that cost me just over $70 including shipping! The world really is a very small place and incredibly inter-connected and inter-dependent. In the case of this order, and the vast majority of what we purchased from Walmart, Amazon or any Dollar Store, it is necessary to get the prices we pay. The map for towels from Walmart or wrapping paper and food containers from the Dollar Store would be the same – it would just be containers, shipping routes and a lot of ocean maps!

When politicians and economists talk about doing away with this globalization, are they just telling us what they think we want to hear or are they serious? Because I haven’t heard anyone give us the heads up that it would mean a double or tripling of prices, and a Dollar Store that’ll have to be called the Five Dollar And-Up Store…

2+2=4

Happy (almost) grad season! But that can be high school, post-secondary or lots of us adults graduating to financial adulthood. While 2+2=4 may sound simple enough, it’s not as much of a math example, as a reminder to use basic common sense. It’s actually a huge poster in the office of a Wall Street investment guru.

In other words: if it doesn’t add up, be careful, because there’s something wrong. But how many times do people not stop to think before investing, before borrowing, or making some really bad financial decisions? Here’s are some really common ones:

You can borrow your way to wealth. Sorry, no matter how great the rate, borrowing is debt and that’s the total opposite of building wealth.

You have received an inheritance of $25 million from a distant relative if you just send some money up front to Nigeria. Come on…get real…

I don’t need to start saving for retirement for few years. Ah, the common sense of delaying. If you’re 20, $9,300 will turn to a million at retirement. If you wait until 45, you’ll need $150,000. If you wait until 55, you’ll need almost $400,000. So if you agree that 2 + 2 = 4, are the odds better you can save $9,300 or $150,000 to $400,000?

Leasing a vehicle. You pay for three or four years and then just return. All those years of payments and you’re taking the bus home or starting another car rental cycle.

An internet start-up company email tip. Their stock tripled or more within months, with no earnings, and in business less than a year or so. It’s now ready for the crash… as soon as you invest.

Trying to outsmart the entire investment world by jumping in and out of investments. Computers sell billions of dollars of stock trades a day and try to gain one-tenth of a second on one another. But you think you can do it for an hour or so with information that’ll be hours old. That’s why day traders lose money 93% of the time.

You have a chance to get in on a 20% investment return. OK, parking your money at the bank gets you around half a percent. Does 2 + 2 equal 4 when someone is promising you 40 times a safe return?

Many ads for a ton of products or services promise something for nothing. Does that seem logical? Does that add up? The weight loss industry advertises like crazy in January for your New Year’s resolutions and now for bathing suit season with all kinds of promises…in a business with a 99% failure rate.

Maybe our formal schooling has stopped, but the learning can never ever end, or you’re in big trouble growing your career, just as much as your money.

Amazon Vs Walmart: Your Wallet Will Thank You

One thing is certain: Most of us shop at Walmart or Amazon at least once a month or (a lot) more. One is pretty convenient to get to and one is just a few clicks away on your phone. Which one you drive to or click on is becoming more important to your wallet. Because, if you don’t comparison shop, it’s going to empty your wallet rather quickly.

From its inception, the goal of Amazon was to dominate the market with low prices. But that ended, or rather it transitioned, to convenience quite some time ago. With a reported 100 million plus people having Amazon Prime, there is an entire generation that values the convenience of two clicks to buy and guaranteed next day delivery. Amazon is banking on the fact that those prime customers don’t shop around much – and they’re right.

Convenience trumps price – just like the closest ATM with a four dollar “service” charge trumps free withdrawals at our own bank three blocks down the street. As we’ve talked about more than three years ago, Amazon isn’t the least expensive on identical products almost half the time (according to studies originally reported by US consumer guru Clark Howard.

Walmart also has some weird pricing on their website. Most of it appears to be from third-party vendors (which is also the vast majority of Amazon’s inventory. Here are some of my shopping attempts and price comparisons from the last two weeks:

Yesterday I bought the pretty plain Remington R3 razor at my local Walmart. I thought $40 was a little high, but bought it anyway…until I got home and checked Amazon! $118 total vs. $40 is insane!

The legal rip-offs for those not bargain shopping works the other way around, too. This is a simple 10 pack of plastic cover plates for light switches: $15 from Amazon vs. $64 from Walmart for a 12-pack!

A gray bus pan that restaurants use to clear tables: I needed two of them since they’re great for the garage. But I almost had a heart attack seeing the Walmart price of $200…for something I bought at Costo Business Centre for $6.

There were a few more of my purchases – or purchase attempts – from the last few weeks where either Amazon or Walmart weren’t even close. While these may be obvious, it’s the 20 smaller things you buy where the prices are “only” out 10 to 20 percent that don’t make it onto our “better double check that price” radar. And that’s what both of these giants, and their third-party vendors count on. At a time when it seems like everything is already up in price by at least 10-20 percent, take the two minutes to compare prices. Your wallet will thank you!

3 Short Stories

Instead of putting their product on sale, Pizza 73 is advertising limited edition (Edmonton) Oilers game box pizza. If you’ve ever wanted to collect used greasy pizza boxes, don’t miss this promo!

Twice last week someone asked me when governments will be back to some kind of balanced budgets. Being asked that is very rare – it’s not something that most of us do as individuals. Hands up if you even do some kind of budget… Hands up if you remember any talk about that in the last two elections? There wasn’t anything. But many remember Prime Minister Trudeau’s comment that “budgets balance themselves.” Besides, running deficits allows politicians to buy votes. Getting to balanced budgets costs them votes!

Middle of January I saw a Royal Bank ad promoting investment accounts for RRSP season. The “deal” was that you get 100 free trades until March 31st. If you need more than two or three trades in the first two months, you’re doing something wrong! You’re not a day trader, I hope, because 93% of them lose money. I manage a 7 figure investment account for a relative. It’s with a national portfolio manager in five accounts. Last year they did a total of 16 transactions. That’s three per account in a year! 100 trades should last you more than 30 years…if you’re investing and not churning, guessing, or day trading.