When I first discovered the world of Swiss watches, I had just returned from living for 8 years in Africa. The cost of even an entry-level luxury watch was then shocking to me. I didn’t see the intrinsic value, and couldn’t help myself from converting the seemingly futile amount into how it could be spent on people who vitally needed it.
What changed my perspective was when I had the opportunity to visit a manufacture, in La Chaux-de-Fonds. I was struck by the skilled human effort that goes into every watch: design, prototype, testing, assembly. Seeing people « like me », neither forced labor in a sweatshop nor diva artists, doing their job with passion, commitment and patience made me look at every watch in a completely different light.
The value I perceived was no longer about the marketing, the blingy retail environment, or the status flexing, but rather the density of highly respectable and impressive human input. Combined with the beauty of the object, the fascinating engineering inside, and the philosophical considerations one can have around the notion of time, I was hooked. Knowing that the cost of the watch funded such efforts, paying salaries to « normal » people with kids to feed and rent to pay, that made me at peace with the hefty price tag. Moving several years later to Bienne, I further witnessed the vital economic importance of the watch industry to thousands of workers.
Becoming comfortable with the general pricing principles of Swiss watches of course did not mean I could suddenly go out and purchase everything I wanted. Even if the money asked is justified, having it available to be spent is a different story. That is when, like many of us, I started to struggle justifying to myself, let alone my wife, allocating material amounts to objects of selfish pleasure I fundamentally had no need for.
And yet, after, admittedly, many rookie mistakes, I’ve now reached a stage where my watch habit is basically not really costing me anything. Don’t get me wrong, I still spend what I can on watches. But looking at basic economic principles, the quantity and duration of pleasure derived, the return on investment is pretty incredible.
Could the money be allocated to other, more useful, less self-oriented activities? My honest gut answer is probably yes, and I also plan a future blog post to discuss this aspect. But for today, let’s pragmatically focus on how, despite watches being expensive objects, collecting them can make economical sense.
1. Resell value
Whether you keep all of your watches forever or, like me, regularly trade in and out, it doesn’t matter: every watch has a value which, even if it’s the last thing you want to do, you can always « cash in » on. As such, it’s an asset.
So without going into complex considerations of the opportunity cost of how you could have invested the same amount in something else, let’s look at simple face value. Assuming you didn’t make a particularly good deal, buying at full retail a watch that is not in especially high demand, the value it has lost is probably around 50%.
For argument sake, let’s say the watch cost 5,000 (Francs, Dollars, Monopoly, you name it) and you kept it for 3 years, wearing it 3 times a week. Its resell value is now 2,500. If you decided to sell it now, that means it cost you 2,500 over 3 years. Per day of wear, give or take, you’re at about 5 of the currency unit. Assuming it’s Swiss Francs, my own currency, that’s the price of a coffee and a little snack (well, in Switzerland, it would be either coffee or a little snack). For something I deeply enjoy from the moment I wake up to the end of the day, that sounds like a pretty good deal.
There are for sure plenty of variables here. How much you can afford to spend on that enjoyment is a key one. For some, that 5 Francs a day will be 1 Franc, or less. For others, it will be 50 or 500. It doesn’t matter. The bottom line is: compared to many other things you can spend on and enjoy in life, a watch can procure fantastic return on investment, if watches is something you care about.
Of course, if you buy smarter, say at a discount (via connections or during a sale), second hand / vintage, or at retail a watch with higher gray market value, then the watchenomics are even more favorable. In those cases, your daily cost could be considerably lower, or even turn into a profit.
After many mistakes along the way, I feel I am pretty much at that stage now. Sometimes, I’ll still make a small loss for simplicity, selling to a professional to avoid dealing with individual buyers myself, but generally speaking it, the cost per day of wear has become at worst negligible. I’m not saying that to brag, just to prove my point, and I’m sure many seasoned enthusiasts among you will relate.
2. Time spent
Another aspect of watchenomics worth taking into account is around a notion analogous to opportunity cost. Basically, most of us watch fans spend a lot of time on watches that does not involve spending any money. And by doing that, we’re also not spending time on other, potentially much more costly, activities.
Visiting retailers or vintage stores, reading reviews, taking pictures of our watches, browsing forums, comparing prices, watching videos, attending fairs or meetups, those are all typical pillars of the watch passion. They are also extremely time-consuming activities. And while very expensive objects may be at their center, the activities in themselves are generally mostly or entirely free.
Not only do those activities allow you to enjoy great moments without spending anything, they also prevent you from engaging in more costly ones. Sure, going to the theater or joining a wine tasting may all be fantastic things to do, depending on your interests and mood, but they will generally cost you more than any watch-related activity, aside of course from purchasing a watch.
I am not suggesting here that it’s all one or the other, that if you love watches you can’t take part in “normal” activities. I am just highlighting that the watch hobby involves a lot of fantastic free experiences, during which you also don’t spend your money elsewhere.
This last point may sound like a bit of a stretch, but please hear me out before you judge: through the watch hobby, you can make some very useful professional connections, regardless of your industry.
I realize this can be the case of pretty much any hobby. And, in any event, in no way am I suggesting that one should get into watch collecting with a utilitarian perspective in mind. But it happens to be the case that, in many companies, there is a fairly strong interest in watches among those at the very top.
Some may be true aficionados, others just trying to find their way around now that they have sufficient disposable income to purchase what they’ve long seen as symbols of success. It may be for themselves, or as a gift to their spouse, or children.
Personally, being renowned as a watch person internally where I work has enabled me to engage with many people in leadership roles who were asking for thoughts, advice, or simply sharing their latest acquisition.
Did I ever engage in those discussions with a careerist angle in mind? Believe it or not, the answer is no. My passion for watches exceeds my interest in workplace tactics. But, as a result, I’ve developed some personal relationships that in some cases have ended up coming in handy for the day job.
As is hopefully evident from the above, while watches can be very expensive, the hobby itself can be a very efficient one when it comes to personal finance. Like with anything else in life, if you go crazy, good things won’t happen. But being reasonable and wise, your passion can be as economically savvy as it is enjoyable.
What do you think? How do you manage personal finance and love for watches? I hope you will share your experience in the comments.