hi everyone welcome to on the money. what they did and what it means for your money. monopoly good. college not so good. the controversial views of one of the co-founders of paypal and why he thinks innovation is at a stand still in the united states and one tip opened up a very big discussion and how much should you tip your server and are you helping to keep their salaries low. >> and it's one time of year to make choices about your health care. on the money starts right now. >> this is america's number one financial news program. on the money. >> here's a look at what's making news as we head into a new week on the money. a historic day at the new york

stock exchange for the largest official public offering ever in the united states. chinese e-commerce and internet company alibaba started trading friday after pricing thursday night at $68 a share. he arrived to see heavy demand for his company's shares. here's how it traded under the symbol baba. holy cow. the federal reserves market committee stood still this week. it would leave interest rates unchanged. it would maintain low rates for considerable time and nearing the end of its asset purchase program. stocks loved all that news. the dow setting a record on thursday and having it's best day in a month though the markets were mixed on friday. yields on the benchmark ten year treasury rose as well nudging above 2.6%. by the way if you noticed your co-worker is suspiciously mellow and has the munchies you may not be alone. nearly 10% of american workers have come to work high. they conducted the survey in

conjunction with survey monkey. a record run for stocks. interest rates start to creep up. what does it all mean for your money? joining us right now is financial writer for the washington post and david who is the chief u.s. equity strategist. thank you both for being here today. one of the big stories of this week had to be the fed. the market was all amped up anticipating that the fed might end up tinkering with it's statement. it didn't which had everybody thinking that rates are going to stay low for forever. is that the right assumption? >> forever is a very long time. that would be an exaggeration however the fed has been very cautious in with drawing it's stimulus and they're very worried about rattling recovery and pulling the carpet out from under the people who need the fed's support the most and so they aren't going to move until they actually have to. the considerable time that the fed has said it will wait before

raising interest rates is linked to the end of its bond buying program. now that won't actually end until october. so the fed still has several more meetings to figure out exactly how it wants to convey it's plan for when it eventually raises interest rates. >> it will eventually have to raise them. i wonder what investors should do to prepare if anything right now. >> one of the things we pointed out is even though the fed maintained the same language we see the bond market as having interrupted the actions as a little bit of a tightening. within the statement there's a survey as to what they think interest rates will be and the expectations went up and we saw bond yields start rising after the statement and that's been continuing over the last couple of months with stronger economic data. so we do think we're getting closer to higher rates but i still think that rates will rise but plateau beneath historical norms. so far the economy is getting

better. rates are rising with that and no trouble yet from rates surging. >> elan who is right the bond market or the stock market or can they both be right? >> you have the right call here. there might be a faster pace of increase but not ending as high as folks had thought previously or as high as the normal run. i would also point out the fed this week released it's plan for how it actually mechanically raised rates and how it will shrink it's balance sheet once it does start to move. that was also important. the way it's going to move is its going to be slow and patient in the way it shrinks the balance sheet. so that implies a slow and steady approach on the front end as well. >> what is your s&p target? let's say all the way through 2015. >> we have the s&p ending this year 2050 and next year at 2150 and even making it to 2300 by the end of 2016. we're still constructive on

stocks. we do think that growth out of earnings is healthy. not robust but healthy and i'm pointing to the sectors that have stronger earnings growth as an economic cycle goes on. there's a lot of krcharacterists that make us confident. >> but you're assuming that the tenure doesn't get above 4% through the end of next year. >> even longer than that. we're assuming the ten year yield stays under 3% the rest of this year and under 4% for a few years. that's an uncertain thing. that's where a lot of debate s. i think how that plays out on long-term yields is how the fed hikes short-term rates and i think if the fed hikes rates earlier than expected and aggressively at least initially they won't have to go as high as 3 or 4% as they've done in the past and that should help keep long-term rates low. >> one of the things the fed has been watching is not only the economy here but what's happening around the globe. there's been concerns with

china. there's been concerns with europe. what do you think happens? does that catch up to us at some point? >> the fed has said frequently it's responsible for the u.s. economy. they pay attention to what the global head winds facing the economy might be but by and large they're making decisions based on where the u.s. economy is. >> but does the u.s. economy get hurt by any of the other economies or are they stronger to with stand all of that. >> the u.s. economy is one of the leaders. so the concern is if the u.s. economy doesn't grow as fast as we're actually hoping that will hurt the other countries. not that the global head winds will come back and bite us in terms of a spill back effect. >> do you agree with that or are there ones you're more concerned about? >> i agree with the idea that the u.s. economy is strong enough to with stand slow downs but the s&p 500 has exposures to the global economy.

it's not the double digits of the past 20 years. we have to watch a stronger dollar which weighs on profits and a lot of companies expanded into asia over the ten or 15 years. that's a slower opportunity. >> thank you for joining us this week. >> thank you. >> up next we are on the money. he is the man behind the biggest technology companies of our time. facebook, paypal, tesla and you may never have heard of him. he explains how he strikes start up gold every time. >> and the 20 cent tip heard around the world. it left us wondering are you tipping for good service or simply out of obligation. a look at the economics and ethics of tipping. as we head to a break take a look at how the stock market ended the week.

>> that's the exsen trick capitalist peter gregory. it's loosely based on my next guest. paypal cofounder peter teal. he's an icon after investing in facebook, linkedin and tesla and he's sharing his insights in a ground breaking new book titled zero to one. peter is our guest this morning. thank you so much for being here. >> thanks for having me on the show. >> in your book you argue that right now we're in a time of technological stagnation. that sounds incredibly strange when i think about where you've come from and what you've invested in. what do you mean? >> i think it's been a two track story in technology. we had a lot of progress in the worlds of bit, computer, internet, mobile internet. that's continuing to accelerate and as far as the eye can see into the future. but outside of that there's been

a lot less progress in the world of atom energy, transportation, bio medical. bio tech. they've seen much less progress in the last 40 years and we need to try to get back to much broader based progress across the board. >> how do we do that? is that a role for the government or something that comes from the ground up? >> i'm biased to thinking it's more from the ground up. we need to -- i think it often gets driven by kriz matt-- charismatic founders who are able to motivate people and get investors and hit the ground running. >> you're a unique thinker peter. you've come up with controversial ideas. you make a case for monopolies. you say the competition destroys profits and hurts company and societies as aa whole. justify that. >> it's pretty straightforward on the inside.

if you're inside a company you'd much rather be in a monopoly than the 4th online pet food company or the solar panel company. you're much better off being at a place like a google or some place like that. for society as a whole, i argue monopolies are good when they create new things. and this is actually reflected in intellectual property laws where people get patents for discovering new things and when you come up with something new you're not creating artificial scarcity. so when steve jobs came one the iphone, it was the only smartphone that really worked for many years. bad monopolies are like the parker brothers board game where you're a rent collector. so there's good monopolies and bad monopolies from society but from the point of an entrepreneur or founder you want to aim for monopoly. >> you went to college at

stanford. you went to law school there and yet you started a controversial program that encourages exceptional 18 to 20-year-olds to leave college and build their own companies instead. why do you think that that's a better way of doing things than college and is this for everybody? >> well, there's no claim that it's for everybody. i mean we picked 20 people a year which is quite a bit less than everybody. it is my claim that there's not a one size fits all answer. something has got -- things have become too narrowly tracked especially among a more talented people where they all go to the same short list of colleges and end up in the same short list of careers law investing, banking, consulting, maybe medicine and we should be trying to encourage a wider variety of things to do. when i look back on my own life if i was to give advice to my younger self-i might go to

stanford but i'd ask harder questions about why i was doing it. >> we talked a lot about what happened with alibaba. the company going public in one of the largest ipos ever and it was interesting because he was talking about who he idolized and thought highly of. he was asked this week and forest gump was one of his idols. who is one of your idols? >> i don't think of myself as having any great men tors because i think every moment in business happens only once. the next bill gates won't start an operating system company, the next larry paige won't start a search engine. so to the extent we're copying these guys we're not really trying -- we're not really learning from them. so this idea of mentorship needs to be rethought a lot. >> i want to thank you for being here. i recommend that everybody reads this book and we really appreciate your time. >> thanks for having me. >> up next we're on the money.

more people than ever before are working for tips but is this a good thing? how adding 20% to your check is tipping the scales in employers

>> to tip or not to tip that's the question this week. he made headlines for leaving a waiter a 20 cent tip on a $60 check. on the other end of the spectrum the hotel chain marriott is requesting that their guest tip their housekeeper in the united states and canada. it's leaving us tipping envelopes and rolling out a new campaign to push it's point. so is it a choice to reward a job well done or are corporations relying on your guilt to cover more of their costs. joining us now is the former new york time's magazine writer

andy. thank you for coming. >> thank you for having me. >> i understand how important tips are. however when does the customer have a right to say i won't tip 15 or 20%. >> tipping degrades the recipient and makes them reliant on the whims of someone like me. you've known me for minutes. you see how irresponsible i am and it makes us feel completely bullied but right now it's the only system we have so it's while you have no legal obligation to tip you have a moral obligation. they're low paid workers reliant on your 15%. that's part of the cost of going to the restaurant. >> right some of them are making $2 an hour. what should be happening? >> first of all fair minimum wage starting with fast food workers. how they live is a mystery to me. it's just unforgivable that in a country like ours people are not paid laifing wage when they go

to work every day. restaurants can have a service charge. it will take getting used to but it will free us from that decision where they can raise their prices. that will be much better. >> should you ever leave less than 15%? >> no. you know that's part of how these people make a living. you can't stiff them. that's not social protest what you're doing. that's just being cheap. >> so maybe you should just give extra when someone does a great job. >> it's turns out socialists have done these studies. tipping has nothing to do with the quality of service. some people are generous tippers and some are stingy and it doesn't changed based on the type of service. that's an illusion restaurant owners would like us to think. if tipping were a good system my senator would work for tips. only the lowest paid workers work for tips. why doesn't my doctor demand tips? i'm guessing you don't have a tip jar? >> i don't.

>> viewers would say here's a buck. if it were a good system the highest member of the community would want to be paid that way. >> let's take frit the marriott perspective. they're pushing people to make sure they leave tips. i leave tips for the maids of the rooms anyway. >> i do too but once they put the envelopes out it institutionalizes underwaying their workers. >> who else do you extend tips to beyond the maids? >> it keeps expanding. service in restaurants. cab drivers. i almost never take a cab. i biked over here this morning. >> did you? >> i tip my barber. and i think it's out of nostalgia for when i had hair. or maybe it's fear that you don't really want to stiff anyone working near your face with sharp objects. >> and the same thing when you start giving out around the holidays give your child care, whoever is taking care of your children you tip them too. >> that's another solution to that too.

pay them a descent wage. >> every time you asked somebody should i be tipping for x, y, and z you can't help but feel a little cheap even for asking. >> that's true but if you tip too much that is socially awkward. if you tip a cop for giving you a ticket, they don't like that. my surgeon did such a greater job. if you slip a 20 in her lab coat and say buy yourself something pretty she feels insulted. >> i can see that. money is a tricky thing to figure out. thank you for your insight. >> thanks for having me. >> up next on the money a look at the news for the week ahead and the ends and outs of flexible spendings and savings accounts. both can save you money but which one is better with your health plan? how to choose after the break.

>> for more on our show and our guests go to our website and you can follow us on twitter at on the money. here's the stories coming up that may impact your money this week. on monday existing home sales figures are out for september. tuesday is the first day of fall. that means there's less than 100 days until christmas. but who's counting. also the ryder cup the international golf competition begins. wednesday evening marks the start of the jewish new year.

on thursday we'll get data for august and the final estimate of gross domestic product is due. that's typically a market mover. >> starting next month many companies will launch their annual open enrollment period where employees can elect their health insurance and other benefits for next year. 150 million americans are covered under employer sponsored health plans and many spend far less time reviewing their options for health insurance than for choosing a new car or where you're going to go on vacation. they can be complex and confusing to navigate but personally we have sharon epperson here to talk to us about what to look for this open enrollment season. what's the top thing you should consider? >> it seems very straightforward but know what the deadlines are because when open enrollment period starts which is usually october or november for a lot of companies that's the only time during the year you're going to be able to elect for any changes you want to make in your health insurance and if you don't make the change you want you're going

to go with whatever you had last year but what you had last year may not be exactly the same. companies may have tweaked it a little bit. so you want to make sure you know what the deadlines are. >> are there hints for where people should be looking to save money? >> you also want to make sure that you review these benefits and see if there's new options because there may be ways to save money there and you also want to make sure that you review your health care needs. one of the things people don't do is figure out am i a high health care user? do i do it a lot or a little bit that will help you decide if you're in a high deductible plan or low deductible plan. >> health incentives. if you're a nontobacco user you might get a bonus or something for filling out the paperwork. look at those incentives and the others people get confused about and aren't sure whether they want to do it is flexible spending accounts and also health savings accounts and

changes with the flexible spending you carry over $500 before. >> that's brand new. >> but still you can save more money in a health savings account. you can save $3,350 or $6,650 for a family. >> i remember a few years ago in the health savings accounts they changed some of the tax implications on what you could use the money for. >> flexible spending for sure. you can't use it for as much as you could before. the great thing about a hsa people get confused my company doesn't offer it can i still open one? >> well yes you need to be in a high deductible plan but if your company doesn't have an hsa and you're still in a high deductible plan you're eligible to go elsewhere. you can do it through a bank or broker and then you put that money in tax free. it grows tax deferred and if you use it for the qualified medical expenses and you get a check, make sure that they're qualified you take that money out tax

free. >> thank you so much. >> that's the show for today. i'm becky quick. thank you so much for joining us. we'll see you next weekend.

nbc 10 news starts now. it looks like it was a shooting gallery. >> right now on nbc 10 news today, four men shot, two of them are dead after an altercation outside of an after-hours club in philadelphia. the details are straight ahead in a live report. set to strike, hundreds of nurses are planning to walk off the job this morning in delaware county. what the hospital says it's doing to make sure patience are taken care of. if you thought yesterday was nice, get ready for even better weather today. here's a live look at the center city skyline, cloudy, foggy out there this morning. temperatures climb gnat 80s today. good morning and welcome to nbc 10 news today, i'm rosemary