Robert Frank of the WSJ’s The Wealth Report wrote a post the other day about a watch that sells for $300k, but doesn’t tell time. Impressively, it sold out in a mere 48 hours. On your first pass you may think this excessive trinket is easily dismissed as some crazy little gadget that billionaires use to flaunt their wealth. On the other hand, since it tells you whether it is day or night, hence the Day&Night Watch, it is in fact useful. How you might ask?
A watch that tells you it’s day or night can help lend perspective to your on and off time. Daytime = working. Nighttime = not working. I think that was the principle philosophical goal of the watchmaker as well (not to mention some smart marketing). If we evenly split our 24 hours into two distinct 12 hour blocks we have on duty and off duty or as the Website puts it:
A new interpretation of Time based around two Tourbillons operating sequentially. The Day Tourbillon operates during the day, defining the wearer’s period of activity, and stops after twelve hours, handing over to the Night Tourbillon dedicated to man’s own private sphere.
Makes a lot of sense since many of us normally work 12 hour days. But that’s just for regular people like you and me. What can we learn from this philosophical timepiece?
For the super wealthy, they have actually bought a lot of time for themselves. Time is a resource that can be bought, borrowed, sold or lost. We buy time by having someone else launder our clothes. We borrow time when we engage in reciprocal favors. We sell time when we offer a product or service that reduces a consumers expenditure of time. And, we lose time when traffic is heavy. As one builds wealth, time itself moves from something concrete and tangible (think “I have two more hours before I can go home.”) to the abstract (think “I’m not bound by time commitments so I have many choices as to how I’ll spend my time.”). The abstraction of time enjoyed by the filthy rich is a reflection of the fact temporal boundaries can be overcome. If you don’t have time, it means you do not have choices of how you will spend your time. You have to go to work, you have to prepare meals, you have to walk the dog etc.
What does this mean for us mere mortals? Principally, we need to have a tangible understanding of what our time is worth. One could start by calculating one’s earnings per hour, but I feel that’s a little too simplistic of an approach. Rather, I would look at the likely hours you will live and divide those hours into your lifetime earnings from this day forward and your accumulated assets.
The average life expectancy (based on 2004 CDC data) for males was 75.2 and 80.4 for females. For the sake of a simple example, let’s say I earn $150k annually from age 35 to 65 with no salary increase. That’s $4.5M in earnings. Along the way I invest 5% of my earnings and yield a lousy 6% annually. Add to that the value of my home with no mortgage at $500k. That would be about $5,227,000. How many more years do I have? About 40. How many hours in a year? About 8,760. So, I have 350k total hours left. Now, let’s net out that useless luxury called sleep to get 234k waking hours. That means my time is currently worth about $22.34/hour ($5.227M/234k). Compare that with $25.68/hour if you just divided your wage by your waking hours in a year. An interesting side note here is you can clearly see the importance of making wise investments. If you can get your lifetime dollar per hour to equal or exceed your annual wages per hour, you are probably making sound financial decisions for your future. However, I digress.
What’s the point? The point is that if I can save an hour by paying $22.34 or less for that hours’ time, I’m actually gaining some time for myself. If the time costs more than $22.34, then I’m actually losing time I’ll have to recoup elsewhere or I’m making a choice to value that time more highly than I value my own. How do you value time with which you do whatever it is you like? Well, that’s for the philosophers. I’d simply say you can’t put a value on time you spend enjoying life. It truly has no value.
All that being said, it would appear making $300k watches might be a good use of all that free time.
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