Reaching the Summit

I survived the 11 day trek at Philmont with my son Jimmy and even managed to climb Mount Baldy. It rained on us 10 of the 11 days, as is typical for the monsoon season in the mountains of New Mexico. A couple of us had a short bout with a stomach issue, one scout had the worst case of blisters I’ve ever seen, I had to buy brand new boots the very day of our departure on the trail (another story), and I lost 10 pounds over the 14 days I was gone. It was great!

Why do I mention this? One reason is the what is learned during a 11 day trek. It is not about getting to the day’s destination first or the fastest. It is about reaching the day’s goal as a crew, while working to provide for each others’ basic needs of shelter and food in a safe environment. (Yes, we saw bears and signs of mountain lions. Our sister crew came across a five foot diamond-back rattlesnake. With proper behavior, however, the biggest threats to life are lightning, exhaustion, and dehydration.) In the process, leadership is developed, boys and a few girls (in Venture clubs) evolve ever closer to being men and women, and everyone overcomes challenges - personality clashes, personal physical limits, or an ego that can’t let go fast enough. One lesson rings true: “Slow and steady wins the race”.

Most of the readers of the Financial Tip are college and high school students and it is the time of year that student are beginning a “trek” into the wilderness of another school year. Being successful in this trek requires financial resources, particularly for college students. Remember that tuition, while expensive, is providing an investment in the student that has an average financial return much greater than most investments in the market. (Of course, the one in whom the investment is being made must work hard to assure that the investment is blue-chip and not simply a parental paid expenditure allowing a four year (or five or six year) membership to Country-Club U!) So, what are the sources we can use to pay for college?

Personal Savings – If one has had the foresight to save for college expenses, use it. We won’t go into the preferred ways to save for college in this “Tip” but it is sufficient to say that the return on liquid accounts in today’s markets is much less than the expected return on a quality education; whether it be college or a technical school.

Work – Make sure you fill out a Free Application for Federal Student Aid (FAFSA) form. You might be eligible for work-study programs at your school or, perhaps, a subsidized student loan that does not accrue interest, until you are no longer in school. Besides, the FAFSA form has gotten much easier to complete and I am shocked by the number of eligible students that don’t bother to contact their financial aid office to complete the task.

If you don’t qualify for work-study, look for off-campus employment. While working at a job that supports your academic interests is great, sometimes a job in sales, waiting tables, or providing child-care for a family can provide higher earnings. I recently talked with a talented student who made over $60,000 in one summer selling knives! (This is not typical. It is, however, clearly possible.)

Loans – First, of course, if you qualify for a subsidized student loan, exhaust it as a resource. Then, if you need additional money, look to private lenders. Be certain to understand the expected salary you will be able to earn with your degree, prior to borrowing a lot of money. I’ve seen too many MIZZOU journalism students that have borrowed their entire four year degree and they all can’t be the next Joe Kernen (CNBC’s Squawk Box) or Walter Cronkite. (I provide a link, as our younger readers likely don’t know who Mr. Cronkite is and what he meant to the American public. He is recently deceased and represents journalism from time when news was reported and not made, as it is by much of the media.)

Ask – Talk to your school and see what they can do to help you. If your parents have recently lost their job, gotten divorced, or experienced any change in their economic situation, do not be too proud to ask for help. This is particularly true for better students or the most promising students. The worst that can happen is that they will say “No” and you’ll be right back to where you are now – except that you have tried and you have learned.

The bottom line is that your “summit” is graduation and you must employ the resources you have in support of that goal. You’ve a crew to help you - your family, friends, and other institutions - or you’re on the trail alone. Regardless of your circumstance, do not be dissuaded from taking the next step on the trail, as each step takes you closer to “financial success”.

“Many people think they could do much better if they only had the opportunity that they don’t realize they already have.” – Waite Phillips

- Robert O. Weagley, Ph.D., CFP(r)
Chair, Personal Financial Planning
University of Missouri
Columbia, MO 65211

Tip on Tips

I’ve a friend that carries a tip chart in his pocket, to allow him to visually see what is correct for 15% or 20% of the bill. Then, if there is a group of us, we usually just ignore him and throw in money – more if the service was exceptionally good or the waiter/waitress is a loyal employee of our favorite spot. (These “throw-ins” have been known to greatly exceed standard gratuity practice.) On the other hand, I’ve been with people that refuse to tip more than 10%, regardless of the service they receive from the, often, lower-than-minimum wage employee. Practices vary and most of us only know what we learned from watching mom and dad.

Since I’m traveling with a bunch of Boy Scouts while you read this, I doubt that there will be much tipping going on. I wondered, however, if others might sometimes wonder what is customary. So I consulted The Wall Street Journal Guide to Starting Your Financial Life, by Karen Blumenthal and found a chapter devoted to this very topic. To top it off, I agreed with most of what she said. See what you think.

• Waiters and waitresses – 15% to 20% of the pre-tax charges. More for very good service and, if you don’t order a drink but your water glass is well attended to, I’d lean toward the high side.


• Pizza/food delivery people - 10% is customary, more on busy “game days” or if the monsoon is what is keeping you from driving to the restaurant.


• Coffee bars and other quick-stop, face-to-face food places – these people generally get paid minimum wage, so nothing is expected. If, however, you’re a regular and you get special service, you might occasionally put a dollar in the cup.


• Coat check – We don’t do this much in Columbia, MO, but it is generally acceptable to pay $1 per item checked.


• Bartenders – Treat the tab, as if it were a waiter or waitress bill in a restaurant. If you pay as you go, $1 added to the price of the drink will assure that the bartender sees you when you come back for another….which reminds me of taxi cabs…


• Taxi drivers – 15% is generally accepted, $1 per bag if s/he helps with your bags. Perhaps more (20%) in a megalopolis like New York City or if you just feel like it is the right thing to do.


• Hair stylist or barber – Here, practices vary considerably across the country and by markets. For markets where it is accepted practice, 15% - 20%, unless they own the store. If in doubt, ask the receptionist what is common practice or round-up on their Holiday gift.


• Massage – (Now we’re talking! After I backpack for 12 days this just might be the ticket!) Generally, masseuses expect a 15% to 20% tip depending on the quality of their service.


• Hotel doorman - $1 for hailing a cab, $1 for helping you find the best local haunt or eatery, $1 per bag for the bellman, and $1-$2 per night for housekeeping, especially in large cities. (Personally give it to the housekeeper, if you see them on the last day and you know they’ve been responsible. It is great for their confidence.)

That is about it for a Tip on Tips. I hope this gets to you, given my challenges with technology and the fact I’ve been away from my desk for 8 days. We recently had a day-long session with about 30 Missouri high school personal finance teachers and many of them said they often use the MU Financial Tip in their classroom, as a point to begin discussions. I love that and I encourage you to send it to others, especially those that work to improve the financial literacy of others. At Personal Financial Planning at MIZZOU, we believe that “Financial literacy is the key to personal freedom and economic development.” If you agree, even if only slightly, please share your financial success by helping to build financial literacy in others.

- Robert O. Weagley, Ph.D., CFP(r)

Chair, Personal Financial Planning

University of Missouri

Columbia, MO 65211