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Dan2010 · 1 October 2010, 12:19 PM

I'm a finance guy so I wanted to do a little cost of ownership analysis on the new Sub C since there are a great many people who think it's too much for a SS watch. This analysis can apply to any Rolex for that matter.

I will use my own recent purchase of the Sub C as an example. I paid $7,600 after sales tax. Now a Rolex will last what, 50, 75, 100 years? Lets say it will last for 75 years. Exclude the regular watch maintenance cost every 5-7 years as all Rolex's will require this.

If I take the cost of $7,600 and divide it by 75 years you get $101. This is my annual cost of owning this watch. Now will I personally get to enjoy this watch for the next 75 years? Odds are probably not but between myself and giving it to one of my kids someday, we will get 75 years of use out of it. When you break it down, $101 a year aint bad to own this or any other Rolex that has such longevity. But wait, it gets better. In 75 years, if one of my kids wants to sell this "vintage Sub C", I can almost guarantee you they will get more than $7,600 that dear old dad paid way back when. So guess what, the only real cost has been the cost of the maintenance and that is assuming that one of the kids sells it only for $7,600. If they sell it for more someday, the premium may even cover that cost too. In the end, we quite possibly owned this great watch for FREE. And for all you other finance geeks, yes I am ignoring the time value of money in this analysis.

Now is it a great INVESTMENT? I never said that. I just analyzed the cost of ownership. Could I have used that $7,600 and turned it into more money. Well duh. But I wouldn't have enjoyed it as much as owning something as fine as this Rolex. Could I of waited and gotten a better deal? Well duh again but remember this analysis can be applied to that $10,000 Daytona too. For me, I was willing to pay the premium.

The whole point of this is, if you plan on keeping the Sub C or any other watch for the long term, you may find the cost is not so bad after all.

MortgageGuy · 1 October 2010, 12:41 PM

Great post

joeycarlson38 · 1 October 2010, 12:51 PM

Interesting observations...now if I can only show this to my wife...

cool-canuck · 1 October 2010, 01:35 PM

You forgot the part where you upgrade to the new Sub-D, then the Sub-E and F.

whw · 1 October 2010, 03:00 PM

ROFL! Yes! Good one!

exxondus · 1 October 2010, 03:05 PM

Quote:

Originally Posted by cool-canuck

You forgot the part where you upgrade to the new Sub-D, then the Sub-E and F.

Then that would warrant a seperate 75 yr analysis since they are seperate entities don they?

gimpex · 1 October 2010, 03:31 PM

Let me take it one step further.... in case the other half doesnt buy this ... yet

Quote:

Originally Posted by Dan2010

Now is it a great INVESTMENT? I never said that. I just analyzed the cost of ownership. Could I have used that $7,600 and turned it into more money. Well duh. .

Point 1) Right now , $7,600 on your hand is appreciating at about the same rate as the money in the bank. At around 0% p.a. . Yes , if you sell now you won't get back all of it , but in a year or two , you probably will. So unless you lose it , and its not insured , its as safe as money in the bank.

Point 2) Could you turn it into more money.... well sure you could (maybe) but with risk to the original capital amount - risk and reward stuff - whereas with Rolex there is no risk

So go buy a Rolex

.....

EE33 · 1 October 2010, 03:37 PM

Dan, you forgot to include service costs which roughly works out to $7500 over the 75 year period.

at current service intervals and cost.

thirsty5 · 1 October 2010, 03:49 PM

I'm a finance guy myself... So, now you have to "project" the years of happiness it will bring you for the life of the watch, then discounted it to present year.

Once you do that... You will find the smiles are PRICELESS! So... it is a better then great investment. :D

Gerardus · 1 October 2010, 04:34 PM

It depends really how long you actually keep the watch.

Flyjet601 · 1 October 2010, 05:32 PM

I dont know how many 75 yr old Rolex watches there are out there

......

Shogunmaster · 1 October 2010, 05:42 PM

There is a flaw in your logic. You say you just bought the Rolex for $7600. That is fine, but you then state that it could last for 75 year or more bringing it down to about $100 a year. That's great and all, but you fail to factor in the fact that Nostradamus and the Mayans are predicting 2012 as the end of the world. If thats the case, then you are spending $3550 a year for your watch. Far more expensive than a Casio.

When purchasing a new timepiece, you must always factor in the end of the world ;-)

Singslinger · 1 October 2010, 05:54 PM

Quote:

Originally Posted by Shogunmaster

There is a flaw in your logic. You say you just bought the Rolex for $7600. That is fine, but you then state that it could last for 75 year or more bringing it down to about $100 a year. That's great and all, but you fail to factor in the fact that Nostradamus and the Mayans are predicting 2012 as the end of the world. If thats the case, then you are spending $3550 a year for your watch. Far more expensive than a Casio.

When purchasing a new timepiece, you must always factor in the end of the world ;-)

Yes, the Mayan calendar ends on 23 Dec 2012 which some people believe is the end of it all. Better buy and enjoy as much as possible before it's too late!

dddrees · 1 October 2010, 09:06 PM

Quote:

Originally Posted by singslinger

Yes, the mayan calendar ends on 23 dec 2012 which some people believe is the end of it all. Better buy and enjoy as much as possible before it's too late!

x2

Dan2010 · 1 October 2010, 09:12 PM

Quote:

Originally Posted by Shogunmaster

There is a flaw in your logic. You say you just bought the Rolex for $7600. That is fine, but you then state that it could last for 75 year or more bringing it down to about $100 a year. That's great and all, but you fail to factor in the fact that Nostradamus and the Mayans are predicting 2012 as the end of the world. If thats the case, then you are spending $3550 a year for your watch. Far more expensive than a Casio.

When purchasing a new timepiece, you must always factor in the end of the world ;-)

If that is the case, I am spending all my money on Rolexes, booze and women. I can't take it all with me so I better enjoy it now!

Dan2010 · 1 October 2010, 09:14 PM

Quote:

Originally Posted by Flyjet601

I dont know how many 75 yr old Rolex watches there are out there

......

I think there will continue to be more and more. Even if you substitue it with 50 years which is very possible to have a watch that long, I still think it is a good buy.

Dan2010 · 1 October 2010, 09:17 PM

Quote:

Originally Posted by EE33

Dan, you forgot to include service costs which roughly works out to $7500 over the 75 year period.

at current service intervals and cost.

Reread the analysis. I didn't forget about that. You are going to have those costs for any Rolex and if the watch is sold for more than was paid for it, you could very well recoup those costs too.

Traveler · 1 October 2010, 10:02 PM

To be an accurate analyisis you should have included the service fees every five years..and they will be increasing over the years as well.

Bigboss · 1 October 2010, 10:10 PM

Quote:

Originally Posted by Dan2010

If that is the case, I am spending all my money on Rolexes, booze and women. I can't take it all with me so I better enjoy it now!

x12!

Dan2010 · 1 October 2010, 10:51 PM

Quote:

Originally Posted by Traveler

To be an accurate analyisis you should have included the service fees every five years..and they will be increasing over the years as well.

See post 17.

level · 1 October 2010, 10:56 PM

I don't know about 75 years. Rolex will maintain parts for about 20 years after stopping production on a given caliber. I don't think they will even work on many vintage watches.

Watch Professor · 1 October 2010, 10:58 PM

What about the opportunity cost? If you take the $7500 and put it in the stock market for 75 years, you will have $2.49, so you are actually making money on the Rolex if you can sell it for $3.00.

BradH · 1 October 2010, 11:44 PM

I did a similar cost of ownership exercise before purchasing my first Rolex, a lightly used GMT IIC that I picked up last week. I estimated the monthly cost of ownership over a 10 year period.

I bought the watch for $5260 and figured in 10 years I could probably resell it for roughly $3500. I also factored in $600 every 5 years for a full service at the RSC and $70 per year to insure the watch.

So depreciation is $176/year over 10 years, service is $120/year, and insurance is $70/year.

With those assumptions, the cost of ownership worked out to $30.49 per month.

Numismatist · 2 October 2010, 12:04 AM

Also, as the watch approaches that 75 year mark, the service costs will soar as parts for a 60 year old watch will be hard to find.

But I like your thinking!

Joey_V · 2 October 2010, 12:06 AM

So I say... let's buy some more watches!!

Dan2010 · 2 October 2010, 12:22 AM

Quote:

Originally Posted by Joey_V

So I say... let's buy some more watches!!

Thats the spirit!

david91686 · 2 October 2010, 01:18 AM

Dan, gr8 analysis!!! i couldn't agree more.

rmfnla · 2 October 2010, 01:32 AM

Great thread; makes me think of the arguement I had with my mother when I bought my DJ.

I've had this watch since the mid 80s (and I got a killer deal when I bought it) so I guess you could say I've gotten my money's worth.

My mother couldn't believe I spent that much money on a watch at the time and was very vocal in sharing her opinion on the matter.

She, on the other hand, likes to buy cheap knock-offs of Cartiers and such, and of course they only last a few months.

I recently pointed out to her that she has easily paid more for all her junk watches than I did for my DJ and I've had the pleasure of wearing a real Rolex for all that time as well.

PanosI · 2 October 2010, 02:50 AM

Quote:

Originally Posted by Dan2010

If that is the case, I am spending all my money on Rolexes, booze and women. I can't take it all with me so I better enjoy it now!

Good post Dan but the above is hilarious

Dan2010 · 2 October 2010, 03:51 AM

Quote:

Originally Posted by PanosI

Good post Dan but the above is hilarious

Thanks PanosI, just don't tell my wife I said that.....

1 October 2010, 12:19 PM	#1
Dan2010 "TRF" Member Join Date: Apr 2010 Location: South Carolina Watch: Panerai 914 Posts: 6,540	Cost Analysis of the New Sub C (or any Rolex for that matter) I'm a finance guy so I wanted to do a little cost of ownership analysis on the new Sub C since there are a great many people who think it's too much for a SS watch. This analysis can apply to any Rolex for that matter. I will use my own recent purchase of the Sub C as an example. I paid $7,600 after sales tax. Now a Rolex will last what, 50, 75, 100 years? Lets say it will last for 75 years. Exclude the regular watch maintenance cost every 5-7 years as all Rolex's will require this. If I take the cost of $7,600 and divide it by 75 years you get $101. This is my annual cost of owning this watch. Now will I personally get to enjoy this watch for the next 75 years? Odds are probably not but between myself and giving it to one of my kids someday, we will get 75 years of use out of it. When you break it down, $101 a year aint bad to own this or any other Rolex that has such longevity. But wait, it gets better. In 75 years, if one of my kids wants to sell this "vintage Sub C", I can almost guarantee you they will get more than $7,600 that dear old dad paid way back when. So guess what, the only real cost has been the cost of the maintenance and that is assuming that one of the kids sells it only for $7,600. If they sell it for more someday, the premium may even cover that cost too. In the end, we quite possibly owned this great watch for FREE. And for all you other finance geeks, yes I am ignoring the time value of money in this analysis. Now is it a great INVESTMENT? I never said that. I just analyzed the cost of ownership. Could I have used that $7,600 and turned it into more money. Well duh. But I wouldn't have enjoyed it as much as owning something as fine as this Rolex. Could I of waited and gotten a better deal? Well duh again but remember this analysis can be applied to that $10,000 Daytona too. For me, I was willing to pay the premium. The whole point of this is, if you plan on keeping the Sub C or any other watch for the long term, you may find the cost is not so bad after all.

1 October 2010, 12:41 PM	#2
MortgageGuy "TRF" Member Join Date: Jun 2009 Real Name: Adam Location: Orlando, Florida Watch: Me Posts: 9,935	Great post __________________ The richest people in the world look for and build NETWORKS, Everyone else looks for work... Robert Kiyosaki

1 October 2010, 03:37 PM	#8
EE33 "TRF" Member Join Date: Feb 2010 Real Name: Des Location: China Watch: 16613 16710 116520 Posts: 2,841	Dan, you forgot to include service costs which roughly works out to $7500 over the 75 year period. at current service intervals and cost. __________________ *TRFs "after Dark" bar and NightClub Addict* Punctuality is the courtesy shown only by Kings Dalip: "GTG posts are worthless without pics, absolutely worthless"

1 October 2010, 04:34 PM	#10
Gerardus "TRF" Member Join Date: Apr 2009 Real Name: Gerardus Location: often in the air Watch: ♕ Posts: 12,230	It depends really how long you actually keep the watch. __________________ ♕126610 ♕126333 ♕116300 Seiko Prospex Prajam Yam -Monster SRPL41K1

1 October 2010, 05:32 PM	#11
Flyjet601 "TRF" Member Join Date: Sep 2006 Location: Hong Kong Watch: All of them Posts: 2,789	I dont know how many 75 yr old Rolex watches there are out there...... __________________ I used to be indecisive, now I'm not sure

1 October 2010, 12:51 PM	#3
joeycarlson38 "TRF" Member Join Date: Jun 2010 Location: MN Posts: 33	Interesting observations...now if I can only show this to my wife...

1 October 2010, 01:35 PM	#4
cool-canuck "TRF" Member Join Date: Sep 2010 Location: Canada Posts: 22	You forgot the part where you upgrade to the new Sub-D, then the Sub-E and F.

1 October 2010, 03:00 PM	#5
whw "TRF" Member Join Date: May 2008 Location: Malaysia Posts: 26	ROFL! Yes! Good one!

1 October 2010, 03:49 PM	#9
thirsty5 Member Join Date: May 2010 Location: USA Posts: 54	I'm a finance guy myself... So, now you have to "project" the years of happiness it will bring you for the life of the watch, then discounted it to present year. Once you do that... You will find the smiles are PRICELESS! So... it is a better then great investment. :D

1 October 2010, 05:42 PM	#12
Shogunmaster Member Join Date: Nov 2008 Location: Vancouver Posts: 23	There is a flaw in your logic. You say you just bought the Rolex for $7600. That is fine, but you then state that it could last for 75 year or more bringing it down to about $100 a year. That's great and all, but you fail to factor in the fact that Nostradamus and the Mayans are predicting 2012 as the end of the world. If thats the case, then you are spending $3550 a year for your watch. Far more expensive than a Casio. When purchasing a new timepiece, you must always factor in the end of the world ;-)

1 October 2010, 10:02 PM	#18
Traveler Member Join Date: Mar 2010 Location: Los Angeles Posts: 374	To be an accurate analyisis you should have included the service fees every five years..and they will be increasing over the years as well.

1 October 2010, 10:56 PM	#21
level Member Join Date: Oct 2009 Location: U.S. Posts: 296	I don't know about 75 years. Rolex will maintain parts for about 20 years after stopping production on a given caliber. I don't think they will even work on many vintage watches.

1 October 2010, 10:58 PM	#22
Watch Professor "TRF" Member Join Date: Oct 2009 Real Name: Myron Location: New York Watch: GMT IIC; Sub Date Posts: 3,166	What about the opportunity cost? If you take the $7500 and put it in the stock market for 75 years, you will have $2.49, so you are actually making money on the Rolex if you can sell it for $3.00.

1 October 2010, 11:44 PM	#23
BradH "TRF" Member Join Date: Aug 2010 Location: Philadelphia, PA Posts: 5	I did a similar cost of ownership exercise before purchasing my first Rolex, a lightly used GMT IIC that I picked up last week. I estimated the monthly cost of ownership over a 10 year period. I bought the watch for $5260 and figured in 10 years I could probably resell it for roughly $3500. I also factored in $600 every 5 years for a full service at the RSC and $70 per year to insure the watch. So depreciation is $176/year over 10 years, service is $120/year, and insurance is $70/year. With those assumptions, the cost of ownership worked out to $30.49 per month.

2 October 2010, 12:04 AM	#24
Numismatist "TRF" Member Join Date: Nov 2007 Real Name: Chris Location: Camden ME & STT Watch: 116600 Posts: 6,350	Also, as the watch approaches that 75 year mark, the service costs will soar as parts for a 60 year old watch will be hard to find. But I like your thinking! __________________ Rolex 116600 Sea-dweller Montblanc Solitaire Doué Black & White Legrand FP Montblanc Solitaire Doué Black & White RB Montblanc Meisterstück Diamond Mozart BP Montblanc Meisterstück Mozart BP Last edited by Numismatist; 2 October 2010 at 12:04 AM.. Reason: sp

2 October 2010, 12:06 AM	#25
Joey_V "TRF" Member Join Date: Jan 2008 Real Name: Joey Location: Dallas, TX Watch: SS Sub 16610 M Posts: 3,824	So I say... let's buy some more watches!! __________________ Current Rotation: Rolex Submariner Date (M) - 1/08, Rolex Milgauss GV (V) - 2/10, Rolex SS Black Daytona (V) - 6/10, Rolex GMTIIC (G) - 5/11, TAG Heuer Silverstone (286/1860) - 1/2015 Former-watches: Omega PO/2535.80/2254, TAG Carrera/F1x2/Monaco, Panerai 312K/292L Wish List: Panerai 270/505, Rolex SMURF, Rolex RG Daytona, Rolex DSSD

2 October 2010, 01:18 AM	#27
david91686 "TRF" Member Join Date: Mar 2010 Location: New Jersey Watch: DayDate II Posts: 310	Dan, gr8 analysis!!! i couldn't agree more. __________________ 1-Rolex DayDate II- Yellow Gold- Arabic Cocentric Face. 2-Rolex Submariner 16610LV-50Th Anniversary Model. 3-Rolex GMT 16710B- Pepsi Model/4-Rolex 116610 Sub 5-Tudor Black Bay- Blue Bezel- Leather & SS Band. 6-Victorinox Swiss Army -241176 Limited Edition Brown.

2 October 2010, 01:32 AM	#28
rmfnla "TRF" Member Join Date: Dec 2006 Real Name: Richard Location: Los Angeles, CA Watch: TT DJ Posts: 4,456	Great thread; makes me think of the arguement I had with my mother when I bought my DJ. I've had this watch since the mid 80s (and I got a killer deal when I bought it) so I guess you could say I've gotten my money's worth. My mother couldn't believe I spent that much money on a watch at the time and was very vocal in sharing her opinion on the matter. She, on the other hand, likes to buy cheap knock-offs of Cartiers and such, and of course they only last a few months. I recently pointed out to her that she has easily paid more for all her junk watches than I did for my DJ and I've had the pleasure of wearing a real Rolex for all that time as well.

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