After reading that headline, you readers are probably thinking I’m nuts. A watch brand with entry level watches starting at $6000 – $8000 cheap to own? How can this possibly be? You can go to any mall jeweler and pick up a perfectly respectable Seiko or Citizen for a few hundred dollars, put a $10 battery in it every year or two – for the next six hundred years! – and keep your total cost of ownership beneath that of a plain vanilla Rolex Oyster Perpetual.
Ah, but there’s the rub. Did you see that phrase, “total cost of ownership?” That means every dollar you spend to own the watch over its (or your) lifetime. That includes what you pay for the watch, plus any maintenance costs. Minus what you sell it for at the other end of history. Minus the admittedly intangible value you receive for the pride and status of wearing the watch.
Now, we’re not going to get into any detailed financial calculations, time value of money, inflation, etc. but consider the following hypothetical scenario.
Go down to your local Rolex authorized dealer and pay less than $6000 for an Oyster Perpetual. Wear it for the next forty years. Have it cleaned five times at an average of $500 per cleaning for a total of $2500. You then turn around and sell it as a 40 year old vintage Rolex in good working order for $6500 (inflation over the next forty years added to possible popularity of the reference could conceivably push the value to that level), and you wore the watch for free for forty years.
Those numbers are fantastic, aren’t they? Literally unbelievable, unless you have a background in finance. But do you know what a Rolex Cosmograph Daytona ref. 6263 with Oyster bracelet sold for in 1975? About $425. A shiny new Submariner ref. 1680 would have set you back about $410. A 5513 – many people’s starter grail today – was only about $290.
Today those Rolex references sell for 20 to 50 times those initial retail prices. In the case of the Daytona, often more. A lot more.
Now we can’t promise anything from an investment standpoint. But study up, pick the right Rollie today, buy a few and hold them, and you might be able to pay for your grandkids’ college educations.
Try that with your mall jeweler watch. On second thought, don’t. That’s one 40-year experiment that’s not going to end well.