‘Who in the Hell Needs a Rolex?’ Billionaire Charlie Munger Told Young People to Skip ‘Pretentious’ Spending of Rich—‘I Don’t Think There’s Much Happiness’

Charlie Munger was a billionaire who had remarkably little interest in looking like one.

Munger, Warren Buffett’s longtime business partner and Berkshire Hathaway (BRK.A) (BRK.B) Vice Chairman died at 99 on Nov. 28, 2023. For decades, the two investing legends shared a preference for something that doesn’t exactly scream billionaire: keeping their money invested instead of spending it to impress people.

Buffett once joked that Munger’s idea of traveling in style was an air-conditioned bus, with Munger apparently willing to upgrade only when bargain fares were available. 

So it probably shouldn’t come as a shock that Munger had some thoughts about Rolexes.

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And they were characteristically blunt.

Munger Had One Question About Rolexes

At the Daily Journal annual meeting on Feb. 16, 2022, Munger was talking about envy and the strange habit people have of feeling poorer simply because somebody else has more.

He had grown up during the Great Depression, when hardship was far more visible and basic living standards were dramatically lower. By 2022, he said, life had improved by roughly 600%. Yet people still weren’t satisfied.

Munger said he had “conquered envy” in his own life.

“I don’t envy anybody. I don’t give a damn what somebody else has,” he said. “But other people are driven crazy by it.” 

Then he brought up the rich, their spending habits and one very recognizable wristwatch.

“Think of the pretentious expenditures of the rich. Who in the hell needs a real Rolex watch so you can get mugged for it?” Munger said. 

That was Munger’s version of a luxury-goods review. Two stars, apparently, and one of them was for avoiding robbery.

He wasn’t finished.

“Yet everybody wants to have a pretentious expenditure, and that helps drive demand in our modern capitalist society,” Munger said. “My advice to the young people is don’t go there.”

Then came the line that summed up his view.

“The hell with the pretentious expenditure. I don’t think there’s much happiness in it.” 

A Rolex Was Suddenly a $17,000 Question

The timing made the example particularly interesting.

Munger made those comments in the middle of one of the biggest Rolex buying frenzies in recent memory. Around early 2022, official retail prices for popular models were already thousands of dollars. A steel Datejust was roughly $7,000 to $8,500, while a steel Submariner was around $8,100 to $9,000 at authorized dealers after Rolex raised prices early that year.

The secondary market was even wilder.

The average Rolex secondary-market transaction price reached about $17,206 in March 2022, according to European Watch Company. 

Certain coveted sports models traded well above retail, with Submariners reaching the mid-to-high teens and Daytona models commanding even larger premiums.

In other words, the watch on someone’s wrist could represent five figures of capital.

Munger’s question was essentially: Why?

Munger Wanted Wealth Working, Not Showing

That’s where the Rolex story becomes more interesting for investors.

Munger wasn’t arguing that every Rolex was a terrible financial decision. Some watches can retain value, and certain models have appreciated. His complaint was about why someone wanted the watch.

If it was purchased because the buyer loved watches, that was one thing.

If it was purchased because someone else had one, the economics looked a lot less attractive.

That distinction fit neatly into the way Munger and Buffett built their fortunes. Rather than constantly upgrading their visible lifestyle, they spent decades owning productive assets and allowing capital to compound.

A person can wear $10,000 on a wrist.

Or that $10,000 can sit in an investment account and potentially become considerably more over time. Like the snowball rolling down a hill analogy he often used, that money could eventually grow into a sizable fortune.

That doesn’t make a Rolex evil. It makes the opportunity cost impossible to ignore.

And Munger understood opportunity cost better than most.

The Rich Get Richer. The Envy Gets Expensive.

Munger’s larger point was that capitalism itself feeds some of this behavior.

People see what somebody else owns, decide they need it, spend money to get it and then discover that somebody else has an even more expensive version.

The finish line keeps moving.

Munger pointed to Harvard psychologist Steven Pinker, who has argued that material conditions have improved dramatically even as perceptions about fairness have become more hostile.

“As it gets better and better, people are less and less satisfied,” Munger said. “That is weird, but that’s what’s happened.” 

The Rolex was simply an easy object to understand.

It was expensive. It was recognizable. It was visible. And unlike an investment portfolio, it could announce its price every time its owner reached for a phone.

For Munger, that was precisely the problem.

The two frugal billionaires had spent their careers demonstrating a different way to think about money. Buffett accumulated wealth through businesses and investments. Munger became famous for finding great companies, holding them and letting compounding work.

Neither needed a wristwatch to prove the point.

For young investors, Munger’s advice was almost comically simple: Don’t spend money trying to look rich before the money has had a chance to make you rich.