Changing Times


There are things in our life that can tell a lot about us at any given moment in time. Cars are a good example. My first car was a high mileage used Toyota Paseo bought for $3,800 dollars. I was a broke college graduate who just started his first professional job in the city making barely enough to rent his first very own apartment with money left over to pay for food, gas, utilities, insurance, entertainment and student loans. Paseo was a good fit for where I was financially at the time and most importantly provided a reliable transportation to visit my then girlfriend (and now wife) who was still in college about 2 hours away.

After working for a year and realizing that a college degree is not the golden ticket to the riches, I decided to go to a graduate school to get an MBA. Two years later I graduated once again, got a much higher paying job and moved to a new city. Intoxicated by a sign on bonus I visited a Jeep dealership becoming a proud owner of a brand new car loan AKA a new Wrangler. A nicer apartment, a better TV, a new stereo system et cetera followed shortly after in a classic example of a lifestyle inflation.

I was a real young professional now making great money in a city with a low cost of living. Surrounded by other young professionals who have been at it a couple of years longer than me I felt a strong urge to take my cue from them. They spent a lot of money on cars, entertainment, clothes and accessories so my spending in those categories quickly ramped up.

One thing I “deserved” but did not have at the time was a nice watch. A watch in a $2,000 – 3,000 range sounded about right and I almost made a mistake of buying one at a local Macy’s. Luckily I had a friend who was able to seriously hook me up – he was a watchmaker and had access to heavily discounted employee sales once in a while. That’s how I got myself a fancy Baume & Mercier Capeland chronograph just like the one in the picture. At the store these were going for closer to $3,000 at the time (over 10 years ago) but I paid $200 for a brand new watch plus another $50 for the alligator strap to replace the rubber one that came standard. Not bad! Also telling about the markup people pay for these things.

To me that watch along with other material possessions, at that time, were all part of my identity as a young, successful professional. And while even back then I was already skillful at finding deals on the stuff that I wanted and never paying full retail, I still got caught up in the accumulation phase.

The problem with being young is that you get older every day.  After a few years on the consumption treadmill I was quickly realizing that “work hard and play hard” is not all that it’s cracked up to be. Reading books like “Your Money or Your Life” opened my eyes to other possibilities. The birth of our son really drove home the point of what’s really important and how crazy it is to work so hard to pay for all the stuff we don’t really need. Looking at all the stuff around the house and in the garage we began the process of purging all the excess.

Suddenly that Baume & Mercier watch became a totally different symbol.  It was no longer aligned with the new me and the new direction. I don’t even wear a watch because my phone is just as good at keeping the time and it’s always with me.  My Baume & Mercier was only worn on special occasions, like weddings or important meetings, which is even worse since at that point it was image over function.  That watch would sit on a shelf 99% of the time collecting dust.  If I wanted to wear it I had to set the time and date before putting it on my wrist since it’s a mechanical watch.  How ridiculous!

So the watch had to go.  I put it on Craigslist last spring and got a couple of hits.  Met one gentlemen who was a watch collector.  He liked the watch but decided to pass and since then I’ve been renewing the listing over and over again without much interest.  Well, recently I got a text message from the same watch collector guy and he decided that he wanted to buy it from me now.  We met up and he gave me $850 dollars that I was asking for the watch.

I was wondering if I would have any feelings of regret when handing the watch over to the new owner… I had none.  Actually, it felt great and liberating just like it feels each and every time I sell other stuff that I’ve so diligently accumulated.

There is another reason I am happy about this sale.  The money I got for the watch is going straight into the Vanguard Brokerage account which up until now had a zero balance.  We are maxing out our retirement contributions and aggressively paying down our mortgage, but our after tax investment account was just recently opened as part of this year’s resolution to start building balances outside of our retirement, equity and emergency savings. A summary of the strategy behind Brokerage investments can be found in this post in step 12 of the Plan.

$850 buys 6 shares of VTI, 3 shares of BND and 1 share of VNQ with a few dollars left over at today’s valuations.  Each currently yields 1.64%, 2.45% and 3.14% respectively.  Monthly that translates to around $1.40 in dividends or roughly $2.80 using the 4% safe withdrawal rate.  It’s not much all by itself but over the years with compounding and appreciation it’s certainly a much better investment than a watch sitting on a shelf collecting dust.

More importantly, the sale of the watch and the funding of the Brokerage account with the proceeds is symbolic (to me at least) of the shifting direction and our updated outlook.  Ten years from now when I’m looking back I hope to see a lot less Baume & Mercier’s and a lot more Investments in our life.  Baume & Mercier being a metaphor for spending/keeping up with the peers and Investments being a metaphor not for the money, but the freedom that it provides to pursue what’s important to us as a family.


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