A framework for buying dumb things

We all do it. I regret about 97.3% of my purchases from 2007-12, including a miniature Picasso. Weird flex since it looked like a toddler drawing and was the size of a business card.

Speaking of dumb things people buy, NFTs. Looks like the market might now agree:

• Sotheby’s pulled a big NFT auction
• NFT trading volume has tanked
• NFT search volume has fallen off a cliff

Like every other speculative bubble in history…

… most will dissolve into nothingness and some will mint a few billionaires. 

What this piece is really about is — when do you decide whether something is, in fact, capital-D Dumb to buy? This seems especially important today. 

Here’s my framework to decide if my Amex needs to come out:

1. If I don’t NEED it but WANT it, I allow myself 30% of my total earnings for play. The rest of it must go through the gauntlet (30% fun, 70% financed).
2. If I buy X and hold it for 1-10 years, does it earn? Does it return? If so, buy (Earn + Return = Spend).
3. However, if I hold for 1-3-5-10 years, does it not earn or return but instead go into the rubbish bin? Not a buy (Hold – Earn → Rubbish = Do not Spend).

This is not rocket science 

But our lives are created by the questions we ask. So, ask yourself, Are those $300 NFT shoes going to be more valuable than investing $300 in learning something? Which one will be rubbish, literally or metaversically (that’s a word, right?)? 

My guess is you’re better off skipping the NFTs, putting money into fractionalized real estate, or investing in yourself.

But what do I know? My friend Tom Osman made millions on a JPG rock. Probably repeatable.

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