Hello-

I hope you have had a great week so far, and happy Friday.

It is time for another episode of Finance Friday.

Quote I am pondering:

“Ego is false confidence, self-respect is true confidence.” – Naval Ravikant

This quote is from an individual I follow on twitter. If I had to get rid of all the people I follow and have just one – he would be the one.

I like this quote because often we mix these two things up. When I come across someone with an ego it feels like they are trying to make up for their lack of confidence through condescension. This is especially true when you look closely at how they treat those individuals they are not trying to get something from.

This isn’t confidence, in fact it is a façade.

On the other hand, is someone who is happy with who they are. Their confidence comes because they know their value and are not trying to make others believe they are more than they really are.

In the end, it is self-confidence that will bring inner peace.

Stock Market Update:

The market has had a very strong week from last Friday until the close yesterday.

Many wondered if the election would have an impact – so far the market is seeing it as a positive.

When it comes to the stock market one thing it doesn’t like is uncertainty and unexpected change – this is especially true with politics.

Not that we have a split between the house and the senate, it is likely we will see less partisan legislation. In fact, we may see that very little gets done over the next two years.

This stale-mate in government can provide some certainty for the stock market or at least less change.

There is still concern over increasing interest rates and tariffs. Both of these – outside of the stale-mate in congress – can have a significant impact on the stock market.

Finance Tip:

It is estimated that 80% of millionaires drive used cars.

The tip for this week, look at your auto loan payment and consider the impact it is having on your finances. Is it reasonable or is it causing a burden financially?

If you are spending more than 10% of your gross income (before taxes) on auto loans (payment and insurance) you are likely overspending.

I would go a step further and say even if you are spending less than 10%, if you are not contributing to retirement each month, consider downgrading to a less expensive car.

Compounding interest is powerful, so whatever you can do to increase what you contribute to your retirement, it will have a significant impact on you financially.

Book I am Reading:

I started a new book by Nassim Nicholas Taleb, called: Skin in the Game.

So far, I am finding it very interesting. The general idea is if individuals have some skin in the game, they are more likely to make better decisions.

I anticipate he will talk more about the bankers who caused many of the problems associated with the crash in 2008, who ended up with large bonuses instead of punishment – like jail. This disconnect causes people to take larger risk than they normally would if they were held responsible.

You will likely hear more as I progress through this book further. If you are interested in this book you can find it here.

Interesting Topic:

Right before Jeff Bezos – the founder of Amazon – quit to start Amazon his employer asked him if he really wanted to leave a good paying job.

How would the world be different if he had listened?

Not saying we should all quit our jobs, rather it is important to reflect on what comforts we enjoy that may be hurting our progress.  It is the leaps of faith that help us to grow the most.

Thank you for reading, and I hope you have great weekend!

Darron Rowley