Money Habits | May Payrolls & Sound Financial Advice

The Depreciating Assets Rule

By Matthew D. Kane, CEPA | President | Partner

We all have moments in time when we see how easy it is to spend money once you finally start making it. Especially in those early career years, there’s a natural impulse to reward yourself.

It’s also true that most of what people tend to buy in this phase starts losing value the second it leaves the store.

You know Josh Manifold, one of our partners here, had a personal financial rule with his wife that I love: No depreciating assets before 40.

The phrase isn’t about being rigid but more about developing a thoughtful attitude toward spending, especially when it comes to purchases that satisfy short-term wants but chip away at long-term priorities.

Even though my wife and I are now past 40 (you’d never guess!), we still try to carry a similar mindset. I’d sum it up like this:

• Patient spending is wise. Don’t rush into purchases that feel urgent but conflict with your priorities.
• Try before you buy. It might be a second home, a new car, or a membership. Look for a meaningful trial run before big commitments. A month in an Airbnb is far less of a financial risk than buying a shore home before you’re sure you’d love to be there all summer.
• Depreciation isn’t inherently bad—but it is a trade.
• Prioritize saving and discipline first. Then enjoy the growth and freedom they produce. This is especially important for our adult children.

Simple rules like these can function as an internal compass, not guilting or depriving you, but creating a financial life that gains value over time.

Whether your rule is “no depreciating assets before 40” or something else entirely, the point is the same: Make space for money habits that support the kind of life you want long term, not just the lifestyle you want to imitate.

A Historic European Edge: The first four months of 2025 marked one of the strongest starts for European equities relative to the US in over five decades. Europe’s ex-UK outperformed the US by 22% in USD terms, making it the third-largest outperformance since 1970.

This kind of relative strength is rare and may point to shifting momentum across global markets. It’s also a timely reminder of the value of maintaining a globally diversified portfolio.

May Payrolls: At face value, the May payroll report looked good. The economy created 139,000 jobs in May (above expectations for a 126,000 increase) and the unemployment rate was unchanged at 4.2%. However, there are a few things to note:

• March was revised down by 65,000, from 185,000 to 120,000. Remarkably, this was first reported as a 228,000.
• April was revised down by 30,000 from 177,000 to 147,000.

This brings the 3-month average to 135,000. That’s well below the 209,000 average we saw back in December, and even below the 2019 pace of 166,000. Furthermore, payroll data is based on surveys of over 120,000 businesses representing over 630,000 worksites. The “statistical significance at the 90 percent confidence level” is 136,000. If you’re well above this number, you can be fairly sure job growth is positive. If you’re at this number, like right now (and also seeing downward momentum), we can’t be sure the economy is actually creating any net jobs. Not a certainty, but it’s an uncomfortable place.

May’s job growth follows a theme we’ve seen over the past year. Over the first 5 months of this year, the economy has created 619,000 jobs (averaging 124,000 per month).

Podcast Recommendation: It can be all too easy to settle for financial extremism: black and white, with a strong point of view that proclaims binary outcomes. At Compass Ion we tend to be centrists and often run from unhealthy financial extremes. We are constantly looking for clearly communicated financial wisdom. We think this less-than-8-minute perspective on debt from Morgan Housel is worth a listen.

*The views expressed represent the opinions of Compass Ion Advisors, LLC, as of the date noted and are subject to change. These views are not intended as a forecast, a guarantee of future results, an investment recommendation, or an offer to buy or sell any securities. The information provided is of a general nature and should not be construed as investment advice or to provide any investment, tax, financial, or legal advice or service to any person. The information contained has been compiled from sources deemed reliable, yet accuracy is not guaranteed.

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