I Spent $5,300... Is A Rolex A Bad Investment? #Best Education Page #Online Earning

 So one thing you guys may or may not know about me

is I actually live near the Saratoga Race Track,

and I can remember when I was a kid

going there to the races at one point in time

and standing up against the rail at the race track.

And I can remember looking to my right and seeing somebody

sitting there with their wrist on the rail,

and I looked and on their wrist was a Rolex watch.

And that was my earliest memory and the first time

I ever saw a Rolex watch in person.

And in that moment in time, what clicked for me was,

wow, that must be a very successful person.

Now I'm not saying that a watch can make you successful

or not and obviously, you could fake the status

by just simply buying a Rolex

on the credit card, for example.

But for me, that was when I decided that one day

I also wanted to own a Rolex watch.

So I was recently in Washington, D.C.

for a finance convention called FinCon.

I'm sure a lotta you guys have heard of that.

And while I was in D.C., I was with a friend of mine

who is also into watches and we went

to a secondhand watch store called Arlington Watch Works.

And I found a Rolex watch there that I really liked,

and I decided to buy that Rolex.

Now since I got this watch, I've posted a little bit

about it on my Instagram and I've had a couple of people,

you know, messaging me, asking me,

"Hey, why would you waste your money on that?

"Why would you put your money into something like that

"when you talk about investing

"and doing good things with your money

"and not buying watches?"

So what I wanna do in this video is talk about,

is buying a Rolex watch a good investment

or a bad investment?

So before we get into that,

a little bit more detail here on the watch

I ended up purchasing.

I bought a 1985 Rolex Datejust.

It is a two-toned watch, which was a very popular design

back in the '80s, which means it has a mixture

of 18-karat gold and stainless steel.

And the one differentiator here for this watch

is it does have the blue diamond dial.

And guys, immediately when I saw this watch in the store,

I told myself, "I really wanna own this watch."

When I went in there, I set myself with a price limit

of, I think, $8,000.

And this was right there within the budget

of what I was looking to spend.

I ended up paying $5,000 for this watch

plus $300 in taxes.

So the total amount of money I spent

on this watch is $5,300.

Now a lotta people think that's insane,

to spend as much as you would on a used car

on something you're literally going to wear on your wrist.

But is this a good investment?

Is it a bad investment?

Let's get into the numbers and see.

So first of all, let's talk about how much money

the watch actually costs.

And there are some costs associated with owning a Rolex

beyond the initial amount of money that you're investing

in that watch.

So we already know I spent $5,000 on the watch

and then the taxes were $300.

Now beyond that, I did decide to insure the watch

with a personal articles policy,

and that covers me if the watch is lost

or if the watch is stolen with no deductible.

And that is at a cost of $60 per year.

Now in order to get that insurance policy,

I did have to get the watch appraised,

which I wanted to do anyway just to make sure

everything was legit.

And that appraisal was $50 for a one-time fee.

Now beyond that, the only other cost associated

with owning a Rolex that most people will incur

is the cost for servicing the watch.

Now when I bought this watch,

it had just been serviced,

which means I know I'm going to be good

for the next seven to 10 years.

But Rolex recommends servicing a watch every seven

to 10 years.

It gets sent back into Rolex.

They clean it and they service it,

and that is at an average cost of around $800.

And in most cases, what you're simply going to notice

as you own that Rolex watch is that once it begins

to lose track of time or it's not keeping time well

or as accurately as you would like it to,

that is when you know that your Rolex

is in need of servicing.

And that is the one major cost that a lotta people need

to be familiar with before purchasing a watch like this.

So that being said, is this a money pit?

Is it something you should just

not be doing with your money?

Let's answer that question now.

And what this honestly comes down to, guys,

is people not understanding what the cost

of something actually is.

If you ask most people what the cost of something is,

they will simply tell you the price.

Like the cost of a car is probably $25,000.

But the truth of the matter is here

that the cost of something is actually the difference

between what you purchase it for and what you sell it for.

And that is where ownership of a Rolex

is actually not that expensive if you do it right

and you buy a secondhand Rolex.

Because what we're going to look at here

is what I paid for this watch versus what I can forseeably

sell it for a couple of years down the road,

and that will tell us the true cost of owning

a Rolex watch.

And the craziest thing here is that a Rolex watch

actually holds value extremely well.

They actually go up in value.

So in a way, it kind of is like an investment

that you're just wearing on your body

rather than, you know, investing in the stock market

or a piece of real estate or something like that.

So a site called TimeRating analyzed the used value

of the Rolex Datejust over a 22-year period,

looking at the price data for these watches.

And what they found is that the annual gain in value

averages 4.6% per year over the last 10 years.

So the crazy thing is, these watches actually tend

to go up in value as you own them.

So if you go out there and buy a brand new Rolex watch

or luxury watch, you're immediately going

to lose some money there,

as far as the difference between that markup

and then the true market value of that watch.

But if you're actually able to go out there

and buy a Rolex watch at or near market value,

that is where you can literally own a watch like this

and have it not cost you any money,

or in some cases actually make you money.

And if you guys don't believe me,

we're gonna walk through the numbers now.

So we're gonna look at two different scenarios here

with owning this particular Rolex.

Scenario number one is if I sell the watch in five years,

meaning I never pay for a servicing.

And scenario number two is if I keep the watch

for 15 years, having serviced it one time

in about seven to 10 years,

and we'll see what the true cost

of owning this watch actually is.

So with scenario number one of owning this watch

for five years and never paying for servicing,

I have my initial investment of $5,000 for the watch

plus $300 in taxes.

I also have that $60 per year insurance policy,

which over the course of five years

will end up costing me $300.

And then I also have that one-time $50 appraisal fee,

which is factored into that total cost as well.

So in total, with those costs considered,

this Rolex watch would end up costing me $5,650

over the course of owning it for five years.

Now at the same time, assuming this watch continues

to grow in value at a rate of 4.6% per year,

the watch is actually worth more than I have put

into the watch at that point in time.

So at a value of $5,000 growing at 4.6% per year,

that watch would now be worth $6,260.78.

Now let's assume, though, I'm not able to get 100%

of the market value for the watch.

Let's say I sell it at 90% of the market value.

So my total cost owning that watch for five years is $5,650.

90% of the market value in five years,

assuming that growth rate keeps up,

would be around $5,634.70.

So if you do the math on that,

that means owning this Rolex watch for five years

was a cost of $15.30.

So scenario number two, as we said,

is owning this watch for 15 years

and paying for one servicing along the way.

So as far as our costs go,

we have the initial investment in the watch of $5,000

plus $300 in taxes.

We have the $50 appraisal fee,

and then we have 15 years of paying $60 per month

for the insurance premium, which would be a total of $900.

And then finally, we have one time a servicing fee

for this watch of $800.

So over those 15 years, that is a total investment

in this watch of $7,050.

Now on the other hand, for 15 years,

this watch appreciated in value,

assuming it does the same thing it has for the last 22,

at a rate of 4.6% per year.

So if you take $5,000, at 4.6% per year,

in 15 years, that watch would be worth $9,816.24.

Now we know from earlier, my total cost on this watch

was just $7,050.

So if you do the math there,

that is how you could actually make money

owning a luxury watch.

And if it worked out exactly like this,

you would make around $2,766.24.

So it's possible to own a luxury watch like a Rolex

and not have it cost you any money

when you factor in what you pay for

versus what you sell it for.

And if you own it for a very long period of time,

15, 20, 25 years, it's entirely possible

to make money with a watch like this.

And so when you simply focus

on the upfront cost of something,

which may look astronomical to spend $5,000

on something that you wear on your wrist,

that may seem crazy.

But when you realize it's not actually costing you anything,

then you are able to justify spending that amount of money

on a watch.

No obviously, guys, there are some things

that we didn't factor in here with these calculations.

Number one, obviously, inflation,

the decrease in the buying power and the natural increases

in prices over time.

So we're not factoring in for inflation here,

and we're also not considering the fact

that the insurance premium for this watch

will probably go up over a period of 15 years.

But at the end of the day, just looking at the numbers,

it is entirely possible to own a watch like this

and have it cost you very little money,

if not no money, or potentially actually making you money.

And the other thing I wanna mention too,

I've seen a lot of blogs and a lot of articles

about what luxury watches are actually going

to make you money.

And I didn't buy this watch here

because I wanted to make money with it.

I bought the watch because of the story I told you

at the beginning and how, for me,

every time I look down and check the time,

this is a reminder to me that I am the type of person

who wears a Rolex.

And look, that doesn't, that may not mean anything to you

if it's not a meaningful piece to you,

but for me, it's a goal I've always had.

And if I can own something like this

that makes me feel good and have it not cost me any money,

that for me is a no-brainer.

So circling back, is this a good investment?

It's not the best investment out there.

Obviously, if you invest in the stock market,

you can get an eight to 10% return,

maybe even more so with real estate.

If you invest in your own self,

you can get 1,000% return.

So when we're talking about around a four to 5% return,

it's not the best investment.

But if you're able to get enjoyment out of it

and have it not cost you any money,

in my opinion, it is a great investment.

But anyways, guys, that is gonna wrap up this video.

Let me know what you think in the comments section below.

Is it something that you would consider buying one day?

Do you already own a watch?

What is your opinion on this?

I would love to hear what you guys think.

If you're new to the channel, make sure you subscribe

and don't forget to hit that bell for notifications.

And I hope to see you guys in the next video.

#Best Education Page #Online Earning

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