Kevin O’Leary speaking <\/p>\n
Dragon\u2019s Den star investor Kevin O\u2019Leary is known for his unfiltered takes on money and investing. And when it comes to a specific tangible asset \u2014 one he literally wears every day \u2014 he doesn\u2019t hold back.<\/p>\n
\u201cIs investing in a luxury watch a good investment, or a stupid flex?\u201d he asked in a recent YouTube video, flashing two high-end timepieces \u2014 one on each wrist.<\/p>\n
While watches keep time, O\u2019Leary explained, they also mark time \u2014 especially when purchased to commemorate life\u2019s milestones. \u201cMaybe you had a great deal, maybe you had a child, or you went to college, you graduated, whatever it is, you\u2019re always going to remember that event from your watch,\u201d he said.<\/p>\n
Indeed, many people buy luxury watches to celebrate personal achievements \u2014 and O\u2019Leary\u2019s done that himself, many times. But he says there\u2019s one golden rule to follow:<\/p>\n
\u201cThe real rule is \u2014 never borrow money to buy a watch, ever. Just buy a watch you can afford.\u201d<\/p>\n
He even offered starter recommendations: \u201cStart with entry-level products, great products like Grand Seiko or Tudor and then when something good happens, go nuts.\u201d<\/p>\n
To drive the \u201cgo nuts\u201d point home, he brought both wrists closer to the camera. On one: a Rolex \u201cRainbow\u201d Daytona, which can fetch more than $400,000 on the secondary market. On the other: a Patek Philippe Aquanaut Luce \u201cRainbow\u201d \u2014 more rare and even more expensive.<\/p>\n
To be sure, while some watches have appreciated in value over the years, that\u2019s far from guaranteed. Not every model or brand sees gains \u2014 and even those that do rarely go up in a straight line.<\/p>\n
According to the ChronoPulse Watch Index <\/a> a global price indicator for the secondary watch market from luxury marketplace Chrono24 \u2014 luxury watch prices surged in 2020 and 2021, but began falling after peaking in March 2022.<\/p>\n For example, ChronoPulse\u2019s Rolex Index has dropped 19% from its March 2022 peak. The Patek Philippe Index \u2014 which saw an even more dramatic surge in early 2022 \u2014 is now down more than 40% since its peak.<\/p>\n The good news? Watches aren\u2019t the only alternative assets investors can explore. If you\u2019re interested in tangible investments, here are more coveted assets favoured by the ultra-wealthy.<\/p>\n Story Continues <\/p>\n Read more: What is the best credit card in Canada? It might be the RBC\u00ae British Airways Visa Infinite, with a $1,176 first-year value<\/a>. Compare it with over 140 more in 5 seconds<\/p>\n When it comes to preserving wealth, few assets have a track record as long and storied as gold. For centuries, the yellow metal has served as a safe haven during times of economic uncertainty, market volatility and inflation.<\/p>\n Unlike watches, gold doesn\u2019t depend on fashion trends or collector demand to retain value. It\u2019s globally recognized, highly liquid and \u2014 unlike paper currency \u2014 can\u2019t be printed at will by central banks.<\/p>\n In fact, central banks around the world have been stockpiling gold. Ray Dalio, founder of the world\u2019s largest hedge fund, Bridgewater Associates, recently highlighted gold\u2019s importance in a resilient portfolio.<\/p>\n \u201cPeople don’t have, typically, an adequate amount of gold in their portfolio,\u201d he told CNBC<\/a> earlier this year. \u201cWhen bad times come, gold is a very effective diversifier.\u201d<\/p>\n Over the past 12 months, gold prices have climbed by more than 35%.<\/p>\n One way to invest in gold that also provides significant tax advantages is to invest in gold stocks or ETFs<\/a>.<\/p>\n Gold stocks help investors gain exposure to mining companies and gold-related assets without having to store physical gold. They\u2019re held in a Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP), for tax-efficient growth while protecting your funds from economic uncertainty.<\/p>\n Gold ETFs track gold prices or baskets of gold stocks, offering an easy, liquid way to invest. Similarly to gold stocks, they can also be held in TFSAs or RRSPs.<\/p>\n Few tangible assets work harder for investors than real estate \u2014 especially when it comes to generating passive income. While property values can fluctuate \u2014 just like stocks \u2014 real estate doesn\u2019t rely on a booming market to generate returns.<\/p>\n Even in an economic downturn, high quality, essential properties keep generating passive income through rent. In other words, you don\u2019t have to wait for prices to rise to see a payoff \u2014 the asset itself can work for you.<\/p>\n Legendary investor Warren Buffett has often pointed to real estate as a prime example of a productive, income-generating asset.<\/p>\n In 2022, Buffett stated that if you offered him \u201c1% of all the apartment houses in the country\u201d for $25 billion, he would \u201cwrite you a check.\u201d<\/p>\n Of course, you don\u2019t need billions \u2014 or even to buy an entire property \u2014 to benefit from real estate investing. Crowdfunding platforms<\/a> allow accredited investors to diversify their portfolio through residential, industrial or commercial properties while being free from landlord-related responsibilities.<\/p>\n The process is simple: browse a curated selection of properties that have been vetted for their appreciation and income potential. Once you find a property you like, select the number of shares you\u2019d like to purchase and then sit back as you receive positive rental income distributions from your investment.<\/p>\n