Quote:
Originally Posted by jeremyam
You cost-benefit analysis is about 50% right and 50% wrong. I'm glad that you understand that there are better investments, especially with a 75 year time horizion. I would, as others have already, point to the cost of upkeep- with recommended service intervals 5-7 years. Assuming the current cost of $750 and being very generous in assuming that number does not increase and you service every 6 years, you're looking at $12,500.00 Making the total cost of owning the watch, $20,100.00- a rather staggering figure but this model reflects the cost of ownership on the majority of cars and definitely boats.
Most people don't keep their watches for 75 years. This is where I have an issue with your findings. My first question and really only one, would be: How old was this person when they acquired this watch?
I think you've taken a very extreme example and used it as a basis to arrive at a conclusion that applies to .5% of Rolex owners. You rightfully acknowledge that a "premium" exist- I believe the annual cost of owning the model, Sub C is more than 2.5x your amount. For the watch to have paid for itself after the dust has settled, you'd have to have beaten 1-2% inflation over a 75 year period... and be alive at 100 years old or something like that to realize you cost-benefit conclusion.
I'm sorry but I think this is misleading and grossly inaccurate.
|
1) Cars and boats do nothing but depreciate and there is better than decent chance that the watch will appreciate over that span of time. There is also a much better chance the watch will be around WAY longer than a boat or car. I also pointed out that the watch is NOT an investment but a cost of ownership analysis.
2) Doesn't really matter how old you are when you buy the watch if you plan on passing it on to a family member as I said would be done in my analysis. I said it would LAST 75 years and in my example I said one of my kids would also enjoy it during this time period. I specifically said that I would not get to enjoy it 75 years. Obviously, if you only planning on keeping it until you die or sell it in the short term, this analysis does not apply to you.
3) Assuming you are correct in that my annual cost is 2.5 times off, thats ok, it still only costs a little over $300 a year to own. Again, this is not an investment analysis and I am not arguing you could do better in gaining a profit with that $300 a year on something else.
4) The whole point of my thread was to get people to think. If you have a long term horizon, the cost of that expensive watch may not be as bad as you think. If you time horizon is shorter, just substitue the numbers and see what YOUR cost of ownership is. Remember if your time horizon is shorter, you have less maintenance cost as well. Also, ANY watch you have is going to have maintenance cost so it's almost irrelevant if you are going to play the watch game.
5) Thanks but this analysis is not misleading nor grossly inaccurate.