Probably a dumb purchase financially...

[Leo]

Probably a dumb purchase financially...

Okay. I bought a watch with almost $6000 value. Well, I did not really spent that kind of money (I only spent almost 4k), I bought it from a friend who knows a "grey market" dealer so I got a discounted price. It's brand new and legit (I had it authenticated with Omega boutique).

I guess I just want to speak out about this because I'm so overwhelmed. So many emotions. I'm excited but at the same time, having a little bit of buyer's remorse because I don't need it and it's a lot of money (3rd biggest purchase of my life besides my first brand new car 6 years ago when I was single in my early 20's, and brand new SUV for my wife back in Jan 2017, both vehicle are paid off now by the way)

I'm not planning to sell this in the future and I'm sure this watch will last me a lifetime. I have few $300 watches and a priceless one inherited from my late dad, but this is the first expensive one.

I've always wanted to buy a nice watch when I was a kid. Two years ago, I was gonna buy a $2500 watch but I ended up spending the money for a nice vacation. Not really sure what triggered my impulsiveness today. I'm justifying my purchase by making a contract with my wife that this is a gift for myself for my 28th birthday today, upcoming 29th and 30th birthday gift and she doesn't need to give me anything for 3 birthdays. I don't really buy luxury things often and I don't do shopping a lot. I still buy clothes at Ross or Target and only every couple years.

Anyway, another update from you guys. My salary increased from 115k to 120k then got another job with a startup tech company and now earning $145k a year. My wife still at 37k so combine more than 180k a year.

We are also going to Europe for the first time and almost everything is paid off now including tickets, hotel, etc. We already spent about 6.5k I think for the trip. Also spent almost 2k for new tires and new phone (broke) which I did not expect this year.

But I think we are still on track with our financial goals. Our expenses is a little over 5k monthly and we are maxing our IRA. I'm also maxing out my 401k, wife does not have 401k. Starting from now, we can probably save 3k per month towards a house downpayment (currently house downpayment savings at 15k and we expect to have 25k by the end of the year and 60k by end of 2019). Our goal is to have 250k of networth by end of 2019 (before we turn 30) and about 60k of cash for downpayment, which is probably a 10% for a 1 or 2 bedroom condo here in SoCal close to the city so commute won't be as bad. Also we plan to have a baby. So a new condo as a starting point and a baby is our plan by end of 2019.

[Nutria]

This sounds a lot like a humblebrag.

[corn18]

Probably a dumb purchase financially...

Okay. I bought a watch with almost $6000 value. Well, I did not really spent that kind of money (I only spent almost 4k), I bought it from a friend who knows a "grey market" dealer so I got a discounted price. It's brand new and legit (I had it authenticated with Omega boutique).

What is the model of the Omega? I'm guessing Speedmaster or Seamaster. Omega makes a very fine watch.

The big question is whether you got a warranty card that is stamped and dated by an authorized dealer. That will determine what I tell you next.

[rennigade]

As long as you're not going into debt and all your expenses are covered...go for it.

Your net worth seems a little low for that salary/age...but that can be corrected over time. My only advice would be to invest as much as possible when you're in your 20's.

As for watches...I dont know anything about them. I wear a timex ironman that was $35. I beat it around and its been going strong for 10 years...although I wouldnt recommend diving with one of those. I have dried salt under the face now...100m my arse!

[disneysteve]

There is nothing wrong with having and enjoying luxuries if you can afford them as part of a solid overall financial plan.

If you have a good EF, pay all of your bills in full and on time, save enough for retirement and other needs, and still have some fun money left over, go ahead and enjoy a gourmet dinner out, take a cruise, drive a fancy car, or wear a high-end watch. But if all of those things aren't in place, you are living paycheck to paycheck, not funding your retirement, and carrying a bunch of credit card debt, then you've got no business spending on luxuries.

[kork13]

This sounds a lot like a humblebrag.

Maybe a little bit, but I understand where he's coming from... When you're used to a lower end lifestyle, suddenly having a significant goggles income is a little shocking/overwhelming. Typing out these thoughts are a way of processing. I've had the same kind of issues -- when we moved up here to Alaska, DW & I both got promotions, COLA stipends, and everything just went up, so our income basically doubled. It took the last 1.5 yrs for me to finally come to grips with it, and figure out how to use that income in a focused manner.

What we've learned (partly with the help of some folks here) is that it's okay to make a high income, and it's good to use it for things that add value to your life. That can be travel, little luxuries like a nice watch, or whatever else. As long as you're following good long term planning practices (saving for retirement, etc.), it's important to enjoy a reasonable piece of your income. Honestly, that applies to people at every income level... At higher incomes, the dollar amounts just get bigger, and can sometimes seem staggering if you're used to having a lower, more average income.

[disneysteve]

Maybe a little bit, but I understand where he's coming from... When you're used to a lower end lifestyle, suddenly having a significant goggles income is a little shocking/overwhelming. Typing out these thoughts are a way of processing. I've had the same kind of issues -- when we moved up here to Alaska, DW & I both got promotions, COLA stipends, and everything just went up, so our income basically doubled. It took the last 1.5 yrs for me to finally come to grips with it, and figure out how to use that income in a focused manner.

What we've learned (partly with the help of some folks here) is that it's okay to make a high income, and it's good to use it for things that add value to your life. That can be travel, little luxuries like a nice watch, or whatever else. As long as you're following good long term planning practices (saving for retirement, etc.), it's important to enjoy a reasonable piece of your income. Honestly, that applies to people at every income level... At higher incomes, the dollar amounts just get bigger, and can sometimes seem staggering if you're used to having a lower, more average income.

I can totally relate. I've gone through the same thing over the past couple of years. My income this year will be about 90K higher than my income 3 years ago. Add in the fact that our daughter has finished college so that expense dropped off and some other expenses dropped (health and auto insurance, HELOC repaid, etc.) and our situation is dramatically different. We are saving more than ever but still have so much more disposable income. And I won't deny that we've been enjoying it, traveling more, eating out more, buying some stuff for the house, etc. It feels a bit strange after being so focused on frugality for so long. We're not being frivolous but we definitely have loosened the purse strings thanks to the big bump in income.

[Fishindude77]

This forum is all about saving, etc. but you really should enjoy life along the way too. Enjoy your new purchase.

A fancy watch wouldn't be my cup of tea because I beat them up too bad. I just buy a cheap new Timex every several years, however I've got firearms that cost that much.

[disneysteve]

This forum is all about saving, etc. but you really should enjoy life along the way too.

I believe it was Citibank a number of years ago that had an ad campaign with the tag line, "Build your nest egg but don't forget to have a few omelettes along the way" or something to that effect.

A fancy watch wouldn't be my cup of tea because I beat them up too bad. I just buy a cheap new Timex every several years, however I've got firearms that cost that much.

Good point. We all have our indulgences. For us, it's travel. We spent about $20,000 in 2017 on travel. That would buy a few nice watches, but neither of us care about watches, or firearms. Travel is where we choose to splurge.

Again, if you can afford it, do it and enjoy it.

[TexasHusker]

Something to consider when you purchase an expensive watch is what you can expect to get back for it later. This is an area where Rolex shines brighter than Omega and every other brand for that matter. When it comes to resale value, Rolex has the industry in the bag. They are, bar-none, the luxury watch brand with the highest resale value in the world.

When it comes to resale, Omega isn't bad per se. The best Omega watch may fetch a higher average resale value than the worst Rolex but the Rolex brand still dominates the pre-owned market and on average, their watches hold value the best. They are also one of the most knocked-off brands as well.

I suppose you take the good with the bad, eh? So, when it comes to resale, which is better Rolex or Omega? Rolex is the best when it comes to average resale value.

My dad bought his Rolex Submariner brand new in 1982 for $500. I'm wearing it today and it is easily worth 10X that and likely 12X. That's around 7% annual price appreciation!

My wife bought me a nifty Tag Heuer about 10 years ago for right at $1000. It is now worth maybe $100.

A lot of folks opt for a TAG or similar as an "almost Rolex" because they are considerably cheaper. Then 10 years later it's a throwaway. That's not cheaper.

Omega probably lies somewhere between the TAG and the Rolex, but it certainly does not hold its value, nor appreciate, except for perhaps a very unique model.

[disneysteve]

Something to consider when you purchase an expensive watch is what you can expect to get back for it later.

I suppose if you intend to sell it later, but OP specifically said he's not.

[TexasHusker]

I suppose if you intend to sell it later, but OP specifically said he's not.

good catch. I guess any time I'm spending in the $ thousands on a luxury item, I do at least take a glance at what it might be worth down the road.

[disneysteve]

I guess any time I'm spending in the $ thousands on a luxury item, I do at least take a glance at what it might be worth down the road.

I think that's a reasonable thing to do. I just don't think that should drive the decision. For example, I wouldn't buy a Rolex instead of an Omega just because the Rolex has a better resale value if I really preferred the Omega. First and foremost, buy what you like and can afford. If you're debating between a few choices, maybe that's when potential resale value would come into play.

[Leo]

Sorry I didn't mean to brag, like I said, I was just overwhelmed and this forum really helps me to become smarter and better financially. All my best friends are not here in California. Even if we talk on the phone or facetime, I don't wanna be like "Hey, I bought a new expensive watch". Not now, but maybe when I meet them again in person. They don't really know anything about me financially, they don't know how much I earn, etc. They have an idea that I'm doing good financially and earning decent but that's about it. I guess I just want to speak out loud about my purchase and give some kind of update with the nice people around here.

Yes, it's a Speedmaster. It has 2 years factory warranty so it's like I bought it from the boutique.

That's interesting. I've always thought we are doing good in terms of net worth. Maybe I don't have a lot of information about net worth stats and I do have more context about our earnings. We double our net worth last year and we are going to double it again in the next 2 years (to 250k). I believe we can have 1 million net worth by 40 years old.

I started working mid 2011 earning 20k as intern, bump to 35k after 3 months. Wife started working around mid 2014, I believe it was like 25k a year. Around mid 2015, I was at 85k. Fast forward to 2017, 120k, and recently at 145k and my wife at 37k. I expect my earnings to be in 145-160k range in the next 2-3 years. I don't expect my wife earnings to increase a lot.

The only two questionable financial decisiona we made are when we bought 2 brand new cars total of 55k we all know those are depreciating assets.

[corn18]

Yes, it's a Speedmaster. It has 2 years factory warranty so it's like I bought it from the boutique.

I'm nitpicking, but it's important. Is the warranty through the dealer or Omega? If you do not have a warranty card stamped and dated by an authorized dealer, then you do not have a factory warranty backed by Omega. This is the risk of a grey market watch. That being said, it isn't a big deal. I have bought many grey market watches and have had no issues.

As far as high end watches, I have a few, but have downsized a lot. If you want to get thrashed, go post on bogleheads.org that you bought a $4k watch. I have owned a few Speedies myself and might get another. I am down to 2 high end watches and my Casio. I wear the Casio the most.

That Speedy is an iconic watch. As iconic as the Rolex Sub. First watch on the moon. Fantastic movement. Classic chrono design. If you hang around watch people, they will tell you the 2 watches to own are a Speedy and a Sub.

Here's what I have bought and sold in the past. The cheapest one was a $10 Casio. The most expensive was a $42,000 A. Lange Sohne:



These are the 2 expensive ones I kept. About $5k each. They are custom pilot watches that have meaning to me personally.