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I think for a single watch 1% is a very rough starting point, but in my opinion the two would not correlate directly. There is a point of diminishing marginal returns on luxury items. For a net worth of $1M I could easily see spending $10K on a watch, but if I was worth $50M, there's NO WAY I would ever spend $500K on a watch. Honestly, I don't think I'd spend over $100K on a single watch even if I was worth $500M. On the other hand, I could see a situation where you're financially stable, with a net worth under $1M, and for it to be reasonable to buy a $10K Rolex, it really depends on your circumstances.

For my entire collection, which I DO view in terms of an asset with a particular market value, I probably wouldn't want to exceed the 5-10% range, but the higher your net worth, the less and less I would deem an appropriate amount to have in a watch collection. Imagine using the 10% estimate, that means it would be reasonable for Bill Gates to have a watch collection worth roughly $6-7 BILLION?!?!?!??
 
hope this is a joke...

I think 1% of net worth is a great measure for a cap on any one watch purchase. That is to say any assets you have - cash, 401k, whole life policy, IRAs, other investments, equity in your home, etc. 1% of that. So if totals $1MM, then a $10k watch. I cant imagine spending 25% of my net income on a watch, so I must not be a WIS :)
This can be the same thing. $10k can be 1 % of net and 25% of yearly income. ;)

spend what you feel like. As long as you don't borrow for it is my view.

1% of net worth in watches isn't bad. Maybe even 2%.
 
I think for a single watch 1% is a very rough starting point, but in my opinion the two would not correlate directly. There is a point of diminishing marginal returns on luxury items. For a net worth of $1M I could easily see spending $10K on a watch, but if I was worth $50M, there's NO WAY I would ever spend $500K on a watch. Honestly, I don't think I'd spend over $100K on a single watch even if I was worth $500M. On the other hand, I could see a situation where you're financially stable, with a net worth under $1M, and for it to be reasonable to buy a $10K Rolex, it really depends on your circumstances.

For my entire collection, which I DO view in terms of an asset with a particular market value, I probably wouldn't want to exceed the 5-10% range, but the higher your net worth, the less and less I would deem an appropriate amount to have in a watch collection. Imagine using the 10% estimate, that means it would be reasonable for Bill Gates to have a watch collection worth roughly $6-7 BILLION?!?!?!??
But there's the counterpoint, in the sense that one should view one's primary residence, and the portion of your retirement account that is necessary to generate a reasonable retirement income as non-discretionary. The remainder of your net worth is then discretionary, and could then be spent on luxury items without impinging on your ability to sustain a reasonable quality of life in your retirement. As your net worth increases, the percentage of your net worth which is discretionary tends to increase, so it actually seems more appropriate to spend a larger percentage of your net worth on luxuries like watches as your net worth increases.
 
I think for a single watch 1% is a very rough starting point, but in my opinion the two would not correlate directly. There is a point of diminishing marginal returns on luxury items. For a net worth of $1M I could easily see spending $10K on a watch, but if I was worth $50M, there's NO WAY I would ever spend $500K on a watch. Honestly, I don't think I'd spend over $100K on a single watch even if I was worth $500M. On the other hand, I could see a situation where you're financially stable, with a net worth under $1M, and for it to be reasonable to buy a $10K Rolex, it really depends on your circumstances.

For my entire collection, which I DO view in terms of an asset with a particular market value, I probably wouldn't want to exceed the 5-10% range, but the higher your net worth, the less and less I would deem an appropriate amount to have in a watch collection. Imagine using the 10% estimate, that means it would be reasonable for Bill Gates to have a watch collection worth roughly $6-7 BILLION?!?!?!??
Mleok is right on.

You can't answer to what you will spend until you are there. With the funds. At $50 million you'll have at least $5 million a year income to spend without touching principle. $500k is really not much unless you have very expensive taste.

Bills worth more than $70 billion. He also can play with over a $8 billion a year. That's a lot of watches.

So id not assume your spending until you have an extra 30-40 million in the bank.
 
I wasn't really talking so much about what is prudent or practical, but more about MY personal preferences. There's a certain amount I simply wouldn't exceed on a watch, even as a watch fanatic. At that point it would go to cars, houses, and traveling the world to no end.

If I find myself in the position of being worth much more than I need in my older age, I'd also like to leave some security for my family that I'd leave behind.
 
Focusing on the percentage of net worth paid for one watch could work IF that was the only watch purchase. For a collector a more useful guage of reasonableness could be the proportion all watches are as a percent of net worth. Focusing on single purchases will hide an overspending problem. Ultimately the best indicator of whether luxury purchases (watches included) are appropriate is whether all the important financial responsibilities have been taken care of first.
 
I wasn't really talking so much about what is prudent or practical, but more about MY personal preferences. There's a certain amount I simply wouldn't exceed on a watch, even as a watch fanatic. At that point it would go to cars, houses, and traveling the world to no end.

If I find myself in the position of being worth much more than I need in my older age, I'd also like to leave some security for my family that I'd leave behind.
I get your point ......EXCEPT.......I don't believe you'd hold true to your word the minute you had an extra $10 million in the bank. Really $50k isn't a lot of money. So it's relative until you are actually in the position. I guarantee watch tastes change dramatically along with other things.

Of course just my opinion. I may be wrong LOL....
 
I inherited far more than I earn but most of it is accounted for on the other side of the planet from where I mainly live.
It's always been there in the background but because I have little interaction with it, it almost isn't part of my life.

On the other hand, what I actually earn is more "real" to me and most of my spending habits are based on that and not my net worth. I think the most I would comfortably spend on a single watch would be £4000-5000. With that said, there are plenty of watches in the £5000-8000 that I like and I don't see there being much of push required to nudge my comfort zone that way if it really came to it.

But how much I would spend is rather fluid and depends on how much I like the watch in question.
I keep thinking I'd like a Seiko SNZH55 and at £100-130, it really is next to nothing but I have thus far put off from buying one for the past two years. On the other hand, I have spent more than that on several times over on other watches that were only to serve for breaking for parts.

As you Americans would say; go figure.
 
No more than 0.5%.
If your net worth was $5000, 0.5% would be $25, and you'd wear a seiko or casio.
If your net worth was $5,000,000, 0.5% would be $25,000, and you'd wear a Patek Philippe.

Sounds about right.
Per Watch purchase?
or
total % of your net worth for combined value of watches?

someone with $5 million in the bank should only have $25k in watches total?

Net worth is tricky. Someone may have $30 million ownership in a company but only have a million in the bank. Should they only spend $10k?
 
Per Watch purchase?
or
total % of your net worth for combined value of watches?

someone with $5 million in the bank should only have $25k in watches total?

Net worth is tricky. Someone may have $30 million ownership in a company but only have a million in the bank. Should they only spend $10k?
I can't tell anyone what they should do, but that's what I would do.

I wouldn't spend more than 0.5% net worth on watches. In your example, yeah, I would only spend 10K on watches. Even now, I don't have any interest in watches that are outside my 0.5% limit.
 
I can't tell anyone what they should do, but that's what I would do.

I wouldn't spend more than 0.5% net worth on watches. In your example, yeah, I would only spend 10K on watches. Even now, I don't have any interest in watches that are outside my 0.5% limit.
there is no room for self control on a watch forum.

Kindly exit :)

btw my math was quick and wrong. It's early.

$1 million would only be $5k.

Also I should have stated personally $1 million in the bank. Not that the company worth $30 million only had $1 million on the bank.
 
Hard to say. I think for things like watches, most people would look at disposable income instead of net worth. A watch is money spent that will most likely never be recouped. We like watches, but it's like buying a TV or a toaster. It's losing value the minute you buy it. Additionally, the purchase is going to be so small in terms of net worth, It's hard to consider a percentage. It's like buying milk. What do I prefer and can afford. How am I doing in life and am I buying my milk at the $1 store or Frank's Organic Goods?
 
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