Have you ever met someone who you would classify as a wine snob? Someone who knows all the best wines and will tell you why that $50 bottle of wine is superior to the two buck Chuck you get at Trader Joes? In the world of watches there are also people who you will meet who are watch snobs. The people who will assure you that the Rolex they spent $5,000 for is the best that money can buy, and can give you all of the brand name watches you should own over your lifetime if you really want to show people you have hit success.
The dumbest purchase I ever made was spending $5,000 on a watch. I wore two watches over the course of a year, one that cost $5,000 and one that cost $79. The $5,000 watch was a Panerai and the $79 was a Diesel. I generally messed with people when they asked me about the watch and called it a DEE-SELL. During that year, my compliment ratio was four to one in favor of the $79 Diesel watch. I never really cared that much about brand names and it taught me that nobody else really does as well. Now I don’t even wear a watch because my phone can tell time.
The smartest purchase I ever made was the original investment in my business. If you know how to run a business, I am convinced that no asset class can generate the kind of return that your business can create for you if run correctly. In addition, having that asset front and center every day allows you to control decisions that you would be hard pressed to do with other investments. Owning a business has taught me how an investment can generate cash flow and build your net worth at the same time.