Afraid of inflation? Buy a Rolex!

What is the difference between investment and consumption? Investing As a rule, it brings benefits in the form of wealth multiplication. Consumption while, in fact, is its squandering. However, consumption does not always have to be mutually exclusive with investment. Examples include real estate, which are a hard capital investment and at the same time a usable space in which we simply live. Consumption is the purchase of a new car, which is losing value right out of the showroom, but already the purchase of a so-called classic can satisfy our consumption needs and at the same time be an excellent investment. A luxury watch?

What needs does a luxury watch meet? Instead of Rolex and Omega, you can buy a Casio – the time will measure just as precisely. Does it look good as an accessory to a jacket? Probably yes, but there are cheaper ones that can emphasize our appearance just as effectively. Prestige? As a rule, it is to be associated with how others perceive us, and few people have such a keen eye to judge whether it is an original or the work of a skilled artisan from Turkey. To sum up – we can consider the purchase of a luxury watch as pure consumption, which serves to boost one’s ego and get a quick shot of dopamine. Well, not exactly…

What comes harder is more valuable

Some luxury goods are characterized by low supply, which means low availability. Just like at an auction – the highest bidder wins, and the seller can run through the bids. We can see such a phenomenon, for example, in the automotive industry. The latest Ford Mustang will generally be cheaper than a 1970s Ford Mustang preserved in good condition. This is precisely due to the low supply of this good. The snag is that 1970s models are no longer produced, so it’s logical that well-preserved pieces will fetch high valuations. Rolex is still producing its watches. So what can indicate that it is a good investment? It’s all about manufacturing time.

According to the Boston Consulting Group, the global luxury watch market is worth 75 billion dollars. As much as 30 percent of this billion-dollar pie, is the secondary market. What’s more – as demand increases, the secondary market for luxury timepieces is growing. This is happening not only because of demand, but also because of supply. You have to wait from 6 to even 36 months to buy a Rolex watch through an authorized sales channel!

This is impossible! After all, you can buy such a watch from the store and online! Of course – stores stock both new and used watches of the most prestigious brands to then sell to their customers. Rolex is not a scarce commodity. The difference between buying from an authorized dealer and buying in a store is in the price.

Rolex is not just a gadget. It’s a great investment

Watch Rolex Oyster Perpetual 36 mm We can purchase directly from the manufacturer’s website for $6,100. However, a long queue will result in a thick layer of dust on our wrist by the time we pick up our new acquisition – this can take years! Another option is to buy the watch in the store, off the shelf. The same watch in the Prestige Watches store in New York costs no longer $6,100, but $13,000! It is easy to count that the difference is more than 100%. The rarer the model, the more it gains in value if it is available off-the-shelf.

According to a report by the Boston Consulting Group -. 29 percent of collectors declared that they paid more for their last used watch than the retail price of a new one. At the same time, 40 percent. of them said they choose to buy second-hand to avoid long queues at manufacturers.

The conclusion? A luxury watch doesn’t have to be seen as a waste. Data confirms that selling such a timepiece after a certain period of time we canmore than recover the contribution.