Tipping, 401(k) Plans, and Canada Goose

What we learned about Business & Finance this week.

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Good morning. It's Thursday, Dec. 11, and welcome to this week's Business & Finance newsletter. This week, we're covering 401(k) Plans and Student Debt as well as Tipping—because during the season of giving, everyone could use a little insight as to why Americans are becoming increasingly compelled to give a little extra when the check comes.

Per usual, if you have any feedback for us on this newsletter, feel free to hit the "reply" button to share your thoughts!

—Phoebe Bain, 1440 Business & Finance Section Editor

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Tip of the Iceberg

Tipping 101

Also known as a gratuity, a tip is money that customers offer workers in addition to a good or service’s base price. Those small transactions add up: Americans now leave roughly $78B in restaurant and bar tips per year.

The practice likely originated in early modern Europe, when wealthy aristocrats would offer servants tips in exchange for excellent service. Americans traveling in Europe during the mid-1800s saw tipping as a mark of sophistication and introduced the practice in the US. Tipping became increasingly common after the Civil War, with formerly enslaved people working in the hospitality industry for minimal or zero wages becoming the first group to rely on tips for income.

The US does not require employers of the nation's roughly 5 million tipped employees (those who make $30+ per month in tips) to pay them the normal federal minimum wage as long as the "subminimum wage" of $2.13 plus tips evens out to the federal minimum wage—meaning customers have a significant influence on tipped workers' total earnings. In recent years, some have argued that this dynamic has pushed tipping standards to unreasonable levels and believe employers should be responsible for employees’ wages rather than customers.

Also, check out ...

> The federal "subminimum wage" of $2.13 hasn't been changed since 1991. (More)

> Nearly 9 in 10 Americans are annoyed by tipping. (More)

> Prohibition helped cement tipping norms in the US. (More)

> A holiday tipping guide. (More)

Explore everything else we've found on Tipping.

In partnership with RAD Intel

AI Math That Rarely Stays Private

RAD Intel’s numbers are stacking up fast. Company valuation compounding at 120%+ annually over 5 years, recurring 7-figure partnerships with Fortune 1000 brands and 2x sales growth rolling into 2026.

RAD’s proprietary AI-driven platform shows brands and agencies where the next marketing dollar will perform before it is spent, turning creative decisions into measurable outcomes. That is the kind of proof investors usually see much later, at very different terms. This is the AI company you’ve been looking for — backed by Adobe, Fidelity Ventures, and more than 14K investors, including insiders from Google, Meta, YouTube, and Amazon.

Nasdaq ticker $RADI already reserved — and the company is still private. Combinations like this rarely stay priced at early-stage levels for long. Invest now at $0.85 per share.*

Please support our sponsors!

The 411 on 401(k) Plans

What is a 401(k)?

A 401(k) is a savings account sponsored by employers to help workers prepare for retirement. Originally intended for corporate executives, the 401(k) is now arguably the most famous section of the US tax code and a staple in worker benefits packages and personal finance guides.

Roughly 70 million Americans, with a total of more than $7T invested, use these long-term, tax-advantaged accounts to build toward a more secure retirement.

There are two types: traditional and Roth. Traditional plans defer tax payments until funds are withdrawn after age 59, while Roth plans take after-tax contributions but tax-free withdrawals.

Some critics claim that with 401(k) plans, companies offloaded the risk of retirement savings to workers without the training to avoid volatile portfolio mixes. Amid the 2008 financial crisis, many 401(k) plans lost about a quarter of their value, an event that hit those near retirement particularly hard.

Also, check out ...

> The difference between an IRA and a 401(k). (More)

> Only about half of Americans have retirement accounts. (More)

> Was the 401(k) a mistake? (More)

> Calculate the financial outlook for your retirement. (More)

Explore everything else we've found on 401(k) Plans.

Studying Student Debt

Student Debt, Explained

For decades, higher education has been a key step to middle- and upper-class prosperity for millions of Americans. But the rising costs of a degree—tuition, fees, living costs, and more—have left many with significant debt burdens after leaving school.

As of the first quarter of 2024, roughly 43 million Americans held a cumulative $1.6T in federal student debt—a sum equal to the 12th-largest economy in the world. Factor in private loans, and the total rises to $1.74T.

The average household with student debt owed around $55K, with estimated payments of $500 per month. Average annual tuition now ranges from around $10K for an in-state public university to almost $40K for a private institution. Those figures have tripled since 1970, accounting for inflation.

Also, check out ...

> Why Ivy Leagues are worth billions. (More)

> Play the role of a student as you try to navigate college and remain debt-free. (More)

> US student debt by state, visualized. (More)

> Should you pay off your student loans early? (More)

Explore everything else we've found on Student Debt.

One Story We're Taking Stock In

From "Euphoria" to "The White Lotus," fans of prestige television have a term for the day a new episode of their favorite TV show drops: HBO Sundays. Netflix has arguably known just how valuable this love for HBO's original programming was since at least 2012, when Ted Sarandos, one of its top executives, said that “the goal is to become HBO faster than HBO can become us.”

That's just one standout quote from the below article (one of my favorites of the week) tracking the history of Netflix's juicy relationship with HBO in light of the streaming giant's recent $83B deal to acquire Warner Bros. Discovery.

> Netflix always wanted some HBO shows. Now it gets all of HBO instead. (Read)

> How HBO inspired Netflix and vice versa. (Listen)

> Netflix, explained. (1440 Topics)

In partnership with RAD Intel

Traction You Usually Hear About Too Late

Most investors only see numbers like this after they move. RAD Intel is still early, backed by Adobe and Fidelity Ventures, with recurring 7-figure contracts, 2x sales growth heading into 2026, 120%+ valuation compounding, 14K+ investors, and ticker $RADI now reserved while still private.

RAD’s curve is still being built — and it’s not on the public’s radar yet. You either meet that math at $0.85 per share, or meet it again after the rerate. Invest now at $0.85/share.*

Please support our sponsors!

Best of the Week

We curate hundreds of resources into 1440 Topics each week. Here are some of our favorites from the world of business and finance.

> The income needed to join the 1% in every US state, mapped.

> How much money you'd have if you invested $1K in Apple 20 years ago.

> The highest-paid roles in movie history.

> How tariffs are impacting the wine industry. (Explore Tariffs)

> Will AI replace your job? (Explore Nvidia)

> Why Canada Goose jackets are so expensive.

> How much it costs to build a new home in each state.

> Who was Bob Noyce, the "mayor" of Silicon Valley?

> How the dot-com bubble compares to the current AI bubble. (Explore Economic Bubbles)

> Meet one of the first prominent female advertising executives. (Explore Madison Avenue)

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Tipping, 401(k) Plans, and Canada Goose