What the Hell does a timepiece investor look like?
Maybe you think of Kevin O’Leary from ABC’s Shark Tank. Or maybe an old rich guy smoking cigars on his megayacht while back at home his walk-in closet has a custom vault packed with Rolexes monitored full-time by paid armored guards.
When I talk to my family, friends, fellow luxury watch enthusiasts, and other business partners, they all have different perspectives of what they think a timepiece investor is. It reminds me of that meme “what people think I do VERSUS what I actually do” where there are six photos of all types of entertaining renditions of the perceived personality. I can assure you, it’s not becoming a guy in a trench coat slinging Invictas on the streets of New York.
Surprisingly, timepiece investors can be any age, from diverse financial backgrounds, and start with as little as $5,000. I’ve trained guys who started at 16 and some are just getting into it for the first time during retirement at age 79. Craz y right?
What do timepiece investors do for a living, and more importantly, HOW does one even start to become an investor?
Many pretend to be investors but are actually one-hit-wonder buyers who get lucky and think they’re an investor because they score a Rolex stainless steel sport model from a dealer and see prices continue to skyrocket. They make a few thousand dollars, get cocky, and then on the next piece, they shit the bed. Why?
They either can’t get another watch allocation that appreciates, or they buy the wrong piece thinking it’s an investment when really it’s just a hype play.
How can you determine which watches are considered investments, and which ones are just going to depreciate as time goes on? How can you get started without making a big mistake and taking a 4-5 figure loss right away when you buy a piece? Here are 5 tips to get going TODAY, and start working your way up to $50,000+ months with passive income doing little work:
Allocate at least $5,000 to start
You may have seen the Youtube video I did about being able to start trading watches with as little as $1500. While this is true, investing is a different strategy and requires you having capital that you can afford to “park” for some time. There are pieces that you can invest in now that continue to appreciate, for example, the Omega Speedmaster Moonwatch in steel at 42mm, that’s still under $5,000. This piece has continued to climb at a steady rate year over year. While the stronger returns on investment are in the $20,000+ range, you can still start small with pieces below that price point and work your way up. For a step-by-step guide regarding which watches are investments, and what price to buy at, check out Watch Trading Academy
Set Your Goals Up Front
The worst thing you can do when parking your hard-earned money into timepieces is buying without knowing what your strategy is. Just like when investing in stocks, or other asset classes, it’s good to have a goal in mind about what you’re trying to achieve for it to make sense in your life. For example, you may want to wear one of the assets while you let it appreciate 10% a month over a year’s time. That way you get to wear an amazing watch, make a 120% return on investment, and move that money into some other piece when you’re done. You can also just stack pieces and put them away in your vault for long-term appreciation that crushes the DOW returns and savings accounts. Some people hold them in their family as heirlooms for their children.
This expectation around how long you’re planning to hold, and at what price point you’re good to sell the asset is key. That doesn’t mean you’re not going to adjust that strategy if another opportunity comes up, or if you see the market jump above the price point you expected to sell at and you think it’s coming back down. Sometimes it’s better to sell when there’s a cap rather than later when prices correct again. It’s important to set this intent ahead of time so you don’t sell too early. This defeats the purpose of locking your capital up in the first place. Setting goals also prevents you from getting emotional and taking a loss.
Know When to Hold and When to Fold
The best timepiece investors know when to hold em’ and when to fold em’ like Kenny Rogers used to sing! A perfect demonstration of this is the Rolex Daytona 166508 in yellow gold with green dial. The MSRP is $36,650, and the current market has them priced around $78,000 which equals 2.1X over sticker. These pieces kept climbing above the $85,000 mark after John Mayer said how much he liked the piece on Hodinkee, and there was speculation it would discontinue in 2021. Savvy investors knew the market hold price to get in was $62,000 or less. Savvy investors bought way lower than that, or wouldn’t pay more than this price. When the prices crept up to $85,000+ those that sold theirs made a handsome profit, but those that purchased theirs at that higher price were disappointed when the piece wasn’t discontinued and prices corrected back to $70,000. This is not to say this piece won’t climb back up to $85,000+, but the point is knowing what Bottom Cash Value for each piece is. This helps you know when a piece is in the money, versus when it’s pure speculation.
Rinse, Repeat, Elevate
As you continue to take home profit from your investments (whether they be from watch trading, investing, or another venture), you can use the excess funds to park into another timepiece. Your portfolio can vary, and you can plan to hold certain pieces for a very long time, and others you can cash out every few months. The beauty of this, is you’re essentially building your own bank account that is a great hedge against inflation and buying yourself financial optionality to cash out whenever you want and make more than most other investment options can provide. It’s insane!
Continue Educating Yourself
I know it can sound boring, but knowing which timepieces to invest in, and when to hold vs. buy is by far the most important piece of generating consistent returns and scoring wins time after time. What’s great about timepieces is knowing the information isn’t illegal or considered insider trading like with stocks. Jewelers and dealers have known insider info for generations, which keeps them rich and the masses in the dark. Bringing to light and providing this info to all, has created some amazingly wealthy new timepiece investors who have portfolios of over $2M and change. These people were regular people who didn’t come up in the luxury watch industry either!
We love the joys that come with enjoying the actual assets we make money on, while understanding the mobility of the asset, and almost zero regulations, gives one freedom like almost no other asset class can provide. It’s understandable how this can all seem overwhelming, so programs like Watch Trading Academy have aimed to make it super simple to become an investor. With suggested watch models, hold/sell advice, and monthly updates on the market, it couldn’t be easier to get started doing this NOW. I know it’s a much lower barrier to entry than I faced starting 10 years ago.
Are you considering investing in luxury timepieces? Have any questions? If so, feel free to ask in the comments below, or feel free to contact me to get more insights here. If you have any previous investments you’ve done with timepieces please feel free to share! I’m always interested in learning about people’s experiences in this wonderfully lucrative realm. Hopefully, I’ll hear from you soon in the robust community of fellow timepiece investors helping each other make money across the world!