Watch Collecting: Money and Responsibility

remarque · 2019-05-18T12:53:17Z

Explore the debate on financial responsibility in luxury watch collecting. Remarque's post sparks insights on watch-to-savings ratios, hobby costs, and living life to the fullest.

remarque

WPS member · Horological Meandering forum

41 replies5190 views1 photos

Remarque initiates a thought-provoking discussion on the financial responsibility of participating in the luxury watch hobby. This thread delves into the delicate balance between passion for collecting and prudent financial planning, prompting collectors to reflect on their watch-to-savings ratio and the true value of their horological pursuits.

Nice watches are luxuries, and are not inexpensive. Given that I enjoy watches as a hobby, and my watches are not/will never be investments nor "investment grade" (!), is there such a thing as "responsible" participation in this hobby?

Consider this: Random internet searches suggest that one should have accumulated in savings at least six (6) times one's annual income by age 50, in preparation for retirement. Of course, this figure will vary if one retires at age 65 rather than 75, but one gets the idea.

And given this figure, what is a "reasonable" dollar value in all one's watches to have spent as a percent of one's savings at the same point of life?

If one has $25,000 in watches (actual total purchase prices spent), and one also has saved $100,000, then one has 25% of one's savings in watches, which I would argue is quite irresponsible. If one has $250,000 in savings, then one has 10% of one's savings in watches, which also seems irresponsible. But if one has $1,000,000 in savings, then one has only 2.5% of one's savings in watches, and if one has $2,500,000 in savings, then one has only 1% of one's savings in watches. Clearly, this 1% value does not appear irresponsible at all.

Where is the line in the sand? It is in interesting exercise to think in these terms, because one Patek Phillipe watch can cost $25,000 to $100,000 or more, and if one has only two Rolex watches, well, depending on the model, one has already spent circa $15,000 to $25,000 for only two watches, possibly more.

Of course, anyone can spend one's money however he/she chooses. But given that most watches do not retain value, let alone increase in value; watches as a hobby should be a source of pleasure, not a financial burden (short or long term); and there are transaction costs to selling watches should one need to (time, money, etc), how many others have thought about their watch collections in these terms?

I have just had these thoughts of late, for no particular reason, and can happily report that personally, my watch:savings ratio percentage is fortuitously 1% [numbers above do not apply

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Key Points from the Discussion

Instead of focusing on the total value of watches relative to net worth, collectors should consider watches as hobby-experience purchases funded by discretionary income, understanding their sustainable non-essential expense budget.
A key financial consideration for collectors is the average annual service cost of their collection, calculated by multiplying the number of watches by the average service cost and dividing by five years.
Some argue that not living life to the fullest is more irresponsible than financial decisions, emphasizing passion and enjoyment over strict fiscal discipline, as one cannot take wealth with them.
The industry's behaviors, including bland regurgitated designs and speculation, have diminished the joy of collecting for some, leading them to question the value of 'marketing-driven trinkets' and thin their collections.
The notion that watches are investments is challenged, with the advice that if one is concerned about value retention, they should consider other 'playgrounds' for their money.
The sudden price increases by brands like Patek Philippe, justified by high demand, are seen as a 'wake-up call' for some collectors, highlighting that even rare and wanted watches can be poor investments.

The Discussion

dr.kol

May 18, 2019

And I know that rare and wanted watches are also very bad investments. We are victims of very clever marketing. I got a real wake-up-call when Patek decided to increase the prices of two Nautilus model suddenly with 20%. Reason was that they are so "wanted". Luckily they did that because I woke up. More about that later. Best, Kari

amanico

May 18, 2019

If my choices are winning choices, good, if they aren't, no problem. Now, if you start to wonder if your watch will keep its value, you should consider other playgrounds. I prefer to live my passion. Best, my friend. Nicolas

dedestexhes

May 18, 2019

i get the point in not over spending, but you only live once. Calculating everything spoils all the fun, not only with watches. Dirk

remarque

May 18, 2019

The choice is mine, yours, etc. Always buy what you love, and don't buy/settle if it won't give you pleasure and satisfaction. Don't buy poor substitutes, ever...

reintitan

May 18, 2019

And especially for those among us who have both concurrently (present company excluded of course)

jomni1

May 18, 2019

They are expenses. What you get back from selling is a bonus.

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