Rule Du Jour: Rule #31 Oppty Cost of Luxury (Patreon)

Rolex vs Oppty Cost of Luxury

In 2020, as the COVID-19 pandemic began, I decided to reset my life completely. The first step was downsizing and shedding all material possessions, yachts, watch collection, etc all except my car. One such item in Q was that I sold a Rolex watch for $16,500 on eBay, with the payment received through PayPal. Instead of withdrawing the funds, I used that to purchase Ethereum, which I later swapped for Bitcoin. Without any active management, that initial $16,500 has now grown to over $139,000. I kept these proceeds discrete in a PayPal wallet as a reminder to myself.

This experience highlights important financial lessons:

• The opportunity cost of not investing: By investing the proceeds from the watch sale, I significantly increased my proceeds from sale compared to keeping the watch or holding cash.

• The high cost of the opportunity cost of HODLing luxury items: Demonstrating that expensive material goods often provide little additional value and instead end up costing you 10x what they cost as they depreciate.

• I now wear an $80 Fitbit from Costco - which serves the purpose of making sure I walk and run 10,000 steps a day. Health is wealth.

This story illustrates how HODLING luxury items can cost you a fortune in missed opptys.

PS no offense to any ROLEX holders here :D