Horological Meandering

Don't look at the total value of the watches in relation to your net worth or net income.

Second, consider the average cost of servicing one watch in your collection. Multiply that by the number of watches you own and divide it by five to determine the average annual service cost of owning your collection. Every five years should be fine with modern watches and synthetic lubricants; it's the reason we're seeing so many 4,5, and now even 8-year factory warranties when one year was standard as late as the 2000s.

Third, add the annual insurance premium you pay, if any, on the collection to the annual service burden calculated in step 2.

Fourth, accept that some portion of each watch's purchase price is retained as a "store of value" to be recovered upon sale, but some of the purchase price represents a sunken cost. To be conservative and establish a realistic baseline, assume that you can sell your watches any time you want to a preowned vendor that's likely to pay you 35-50% of the original retail price in an unfavorable brand/model scenario... 

...whether you bought the watch at MSRP in a boutique or at a discount used, pre-owned dealers generally purchase at 35-50% of new retail unless we're talking about the bare handful of steel sports watches that are hyped at this moment. More money can be recovered by selling privately, but this can be slow, dangerous, and aggravating. Selling privately is easier when you know other collectors who want a given watch.

Disclosure; I work for a preowned dealer. When I decided to sell my collection, I sold them to my company because it was easy and quick. Also, I had a ton of exotic dress watch complications in precious metal from JLC. Those watches are hard as hell to move regardless who you are, and over half a year later, some of them remain unsold at my company, which runs massive advertising campaigns; I'm glad I skipped trying to market those myself.

Fifth and finally, take the expected loss inherent in the drop from whatever you paid down to that 35-50% of MSRP resale, and divide it by the number of years you expect to keep the watch or watches. Chopping your resale haircut into a rough annual expense allows you to include it in the total "annual watch discretionary budget." Unlike insurance and service costs, this is an annual expense factor that drops the longer you own the watches.

ADD the annual service cost average, the annual insurance average, and the annualized portion of the worst-case scenario resale losses, and you have a usable number that you can compare to your family's sustainable and existing discretionary expense annual budget.

And if you want to measure the impact on your retirement planning, take the newly calculated average watch discretionary budget and use online tools to evaluate how that money could be put to work over your anticipated remaining work years in Treasuries, index funds, 401K, mutual fund, or a bundle of dividend-paying bluechip stocks.

Best,

Tim

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