Your normals are inverted so the brush projection is incorrect.
In edit mode, select all faces and recalculate the normals to fix it. You might also want to unwrap it again for a more appropriate UV orientation.
To add to @init_pixel ’s excellent and correct reply, you can turn on Face Orientation in your Viewport Overlays. Anything red is flipped and will paint wrong. Anything blue is correct.
If you’re still encountering issues after that, I’ve written up some solutions to texture painting problems here:
Thank you ! - The normals show up in overlays when I am in edit mode. Red is the warning that my faces are flipped. I started with a circle then extruded up. Not sure how they got flipped yet. It now paints as it should.
So If I can get this figured out it would be really cool ! Are there addons that make this easier. ? It seams if I get it figured out I can duplicate my material in the node editor and create layers as I do in photoshop is that right ?
Stencils are square images, so what you can do is put your ruler texture on a square image with a transparent background in Photoshop, and use that as the stencil