The Change-up: Wealth ≠ Freedom

Happy Monday!

I hope you enjoy this edition of The Change-up, my weekly newsletter sharing the latest market news and personal finance tips. If you're interested in learning more about working with me, reply to this email or click my Calendly link at the bottom.

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Quote of the Week

"Freedom lies in being bold" - Robert Frost

 The Story

Markets continued their up-and-down trend throughout the week but ultimately finished in the red. The 10-year treasury trickled down a few points, while 70% of companies that have reported earnings in Q3 have beat expectations. 

My View

6 weeks ago, I talked about how the UAW labor strike could impact automakers and their suppliers. So far, the automakers are estimated to have lost millions in revenue, while that number is in the billions for suppliers. Ford reached a tentative deal with the UAW last Wednesday. Hopefully, GM and Stellantis will come to terms soon. 

But I want to focus on another area of the auto industry: car loans. 

According to Fitch Ratings, the percentage of subprime auto borrowers who are over 60 days past due on their loans is now the highest on record. 

Online personality "Car Dealership Guy" did a great job of breaking down the reasons why:

1. Buyers with high credit scores (known as prime loans) are borrowing cash at an interest rate of 5-7%. Those with poor credit scores (subprime) are between 14-21%. 

2. Car prices have continued to rise

3. There have been unprecedented increases in auto insurance premiums. 

While this is certainly something to keep an eye on, only 0.27% of prime borrowers are 60 days delinquent. 

What does it mean for you?

Only buy as much car as you can afford. That applies to today, tomorrow, and anytime in the future. 

Coming Up This Week

• Q3 Earnings Season (All week)
• Fed Rate Decision (Wednesday)
• Jobs Report (Friday)

This week, I read a great blog from Morgan Housel at The Collab Fund titled "A Few Laws of Getting Rich". 

Morgan and his team have put out great content over the years, including his book The Psychology of Money". I encourage you to head over and subscribe. 

In this post, Housel talks through 9 laws:

1. Most of what makes you happy in life has nothing to do with money, and realizing that once you have money can be a painful admission.

2. What you think is admiration of your success may actually be envy.

3. The richer you become, the less likely people around you are to tell you when you're wrong, crazy, mean, or oblivious.

4. Sometimes what made you successful was worry and anxiety, and you can't let go of that when you're rich.

5. There is no easy way to manage wealth and kids.

6. Quick wealth is fragile wealth.

7. Reputations have momentum in both directions because people want to associate with winners and avoid losers. 

8. Expectations can rise faster than income, so a higher income sends expectations spiraling out of control.

9. No one is going to remember you in 100 years.

That last one hit me hard. But it also freed me up. 

Life is certainly important. And decisions need to be made with wisdom and discernment. 

But we should never take ourselves, or our mistakes, too seriously. 

Money opens the door to opportunities, but we need to have conviction in our identity and purpose for it to make a difference. 

There is a Scottish proverb Housel quoted in his piece: Be happy while you are living, for you are a long time dead. 

Let's have a week!

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