Rolex Versus Timex

When you read the title to this article, you probably thought, “Well, it’s about time!” For the first 260 posts here at Frugal Dad I’ve avoided mention of the world’s most ostentatious brand–the Rolex.  And while I will poke a little fun at the Swiss masterpiece, this post is really more about the value of time (pun intended).  Both the Rolex and Timex brand of watches are essentially nothing more than a time-keeping accessory.  The two models shown below (the one on the right is my personal Timex) will set you back $27,300 and $29.99, respectively.

rolextimex081808.JPG
Rolex ($27,300), Timex ($29.99)
Photo by Frugal Dad

“I Have Finally Arrived”

The idea for this post was sparked by two events, one very recent, and one from a long time ago.  Last week I received an insert with our Sunday paper for a jewelry store.  The cover of their advertisement featured the $27,300 Rolex watch, and the amount was just staggering to me. It reminded me of a time a few years ago when we still had expanded cable television. I was watching some silly show about housewives in Orange County.  One of them was having a 40th birthday celebration on a private yacht.  Her husband gave her a $40,000 Rolex as her birthday present, and she turns to the camera and says, “I’m forty years old, and I have finally arrived!“  How sad.  Here was a successful businesswoman, mother of two kids, and someone blessed with more money and resources than most will see in a lifetime, but she had not “arrived” until receiving a Rolex watch.

How Valuable is Your Time?

I suppose there isn’t anything stopping me from buying the Rolex on the cover of that ad.  Well, assuming a bank would loan me $27,300!  But let’s assume for a minute that I did in fact have that much money sitting around, money that I had earned from working a full time job.  How many hours would I have to work to pay for something like that? Well, let’s assume I earn $15 an hour.  Without considering taxes, I would have to work 1,820 hours to buy that watch.  That is nearly a year of full-time work! Of course, most people even in the market for something that expensive make much more per hour, so let’s more than triple that hourly wage just for sake of argument.  At $50 per hour I would have to work 546 hours, or roughly 68 eight-hour days.  Assuming a five-day workweek, that represents about 13 weeks of work.  Again, this does not account for taxes, so you would have to actually earn much more, or work much longer, to accumulate this sum of money after taxes.

Is It Really Worth It?

Of course you expect me to say no, but let’s look objectively at the benefits of owning such an exquisite piece of jewelry:

  • People will think you could afford it, and therefore assume you are rich.
  • You are virtually guaranteed to be on time to dinner dates, when you are not working, of course.
  • You may be the only one in your family with an insurance policy on something you wear.
  • After annual round trips to Switzerland for calibration and servicing you will be the proud owner of one of the most well-traveled watches of all time.

Still not much there worth forking over $27,300 for, is there? I think I’ll hold onto my Timex, and save the remaining $27,270.01 for my kids’ college funds, my own retirement fund, and to build an emergency fund.  Even if I had an extra $27k I could think of a hundred charities I would rather support, or dozens of strangers I could help, rather than spending that kind of money on a watch.

Disclaimer:  I am not suggesting there is anything wrong with having nice things.  However, there are some things that just seem a little too nice, and are often purchased only for status or show.  For those things, I think there are more worthy uses of our exchange of time and resources, but ultimately it is a personal decision.

Comments

  1. I don’t wear a watch and am clueless as to watch brands and prices. How sad is that that a watch could be that expensive! I didn’t even see any diamonds on it. I saw that Orange county episode too and thought how sad. I am not a material person at all. Even my wedding ring was cheap as I am not a jewlery person and don’t care to flash around what I have or don’t have. We choose to spend the money on buying our house instead of having a nice ring and I still love that decision to this day and wouldn’t change anything. Sometimes people will ask me why I haven’t bought a new ring, the answer is I simply don’t care for a better one.

  2. I always think of these kinds of things in terms of winning the lottery, as that would be the only way I could afford such an item. The question is, if I won (my minimum winnings have to be $20M after taxes, though I really would take anything), would I start living “rich”? The answer is not likely. The only thing I would do right off is remodel my kitchen and decorate my house (we’re a white walls, bare floors kind of house right now) – something we’re saving for anyway. But buy a $27k watch? That seems wasteful, unless it has an investment potential, then I can see the advantage.

  3. People – especially people who actually think there’s some benefit, or worse yet, prestige, to having a Rolex – would be shocked to know how few of us even notice their watch, or think there’s anything ‘special’ about having one.

    After all, you can buy a ‘Rolex’ on almost any street corner nowadays, so what’s the big deal?

  4. Same goes for people that drive around in huge Suvs (because they HAVE to because their “safer” and have to drag so much “stuff” for the kiddies) and those that brag about how much square footage their houses are. Someimes those that have the biggest and most things are the most depressed and empty people.

  5. I wouldn’t know a rolex if one literarly bit me (lol.) Seriously I do not even own a watch, my free cell phone (with plan) has a built in clock. I think nice things are ok, but nice to me would be a $30 watch, not $27,000. I do not even make that much a year and I support myself and two kids. We have everything we need and many things we want, but first we give back to God and a few charities that are helping many people.
    If I had $27,000 laying around, I would give $6,000 to my church. I would put $10,000 into my emergency fund, and put $10,000 into our house fund (we do not own, we rent until we can afford to own.) Then I would take my kids shopping for new sneakers and me too (I have not bought sneakers in three years.) I would also get a tune up for my car. Then maybe I would upgrade my cell phone to a nicer one, but probably not.
    Thanks for the reality check!!! -Becky in NJ
    http://strivingtoliveeachdayhisway.blogspot.com/

  6. Just wanted to note that I found this post and resulting comments fascinating – particularly Matt and the well-to-do uncle.

    I couldn’t fathom owning a rolex, but then again, I am trying to get a $20/hour job. It’s just not even the same mindset.

  7. 1) The people who buy items like that do not measure their pay in dollars per hour. If you were to boil it down to something like that, then it would amount to hundreds of dollars per hour or thousands per day. They usually have much more going on than just a “day job” and collect money more than just from working. FrugalDad, how do you count the money you make from monetizing this blog; hourly? daily?

    2) I would totally agree that there are a number of things that are purely for the rich to appear rich. There are whole industries based around that. Custom cell phones that don’t do anything special, they are just plated in gold and jewels. 22″ custom rims?! Who the heck needs those especially when handling and ride quality are compromised so severely? The Rolex is another perfect example. The list goes on and on.

    3) To attack SUVs in general as purely being for show is preposterous. It is tantamount to a cyclist attacking you for owning a motorized vehicle of any sort. Simply because you have one doesn’t mean you have it for the wrong reasons.
    One cannot deny that many SUVs have much better passenger and storage room in them than all sedans and most station wagons. There are people with big families and/or like to take trips with plenty of stuff in the back. For many it is a matter of preference — my wife doesn’t like the closed-in feeling that comes with a car. Her SUV makes her feel more comfortable while driving and that by itself is worth a lot. It has also come in handy when towing my crappy car back home when it broke down back in the day — it hasn’t happened in a long time! *knock on wood*

  8. Totally agree with the others who go with no watch at all. My cell phone works just fine – actually, I feel like it’s more accurate than any watch I’d wear!

    @David – While I agree that not everyone drives an SUV for show, would you agree that they aren’t a necessity for most people? I’m an American living overseas, and I’ve come to realize how true it is that we drive ridiculously large, gas-guzzling cars. I guess the question is – unless you have a lot of kids, why do you need that much storage space in a vehicle? Probably for just stuff. Why do you need that much stuff? I really don’t know. We’re a family of 4 that doesn’t have a car at all, thanks to the beauty of public transportation in our city. I know that’s not a logical option in most American cities, but I’ve been pleasantly surprised at how little we really do need when we go out and about.

    Just my opinion. ;)

  9. I think I’ll stick with my timex. Being happy and content with what I have is more important to me than status symbols.

    Like AT, I don’t know that the people with the big houses, expensive cars, etc are any happier for having those things. They may feel empty knowing that those things didn’t bring the happiness they thought it would.

    PS. I must be getting old. Can remember when people could buy a Rolex for under 10K.

  10. @Maurice: The $27,300 was the list price found inside the brochure, and I expect it included quite a bit of markup. I was equally surprised to see it listed for so much without any diamonds, gold, etc. visible. Then again, I know nothing about this type of stuff and defer to you for expertise.

    • Maurice, the rolex pictured is a day-date in all white gold. They actually do retail in the $25,000 range. It is a classic timepiece. I too own a rolex datejust and love it! Even if nobody else notices, I notice and can appreciate it’s sentimental and aesthetic value to me. I’m not saying that owning a high-end timepiece is for everyone, but it is quite satisfying to me.

  11. There is no question that a Rolex is not a necessity, however neither is stopping for Ice Cream with the family. You can actually live without the ice cream, and a family of four could spend close to $20 on just ice cream here in the states.

    I have an uncle who has a Rolex like the one pictured. He made a little over $2.5 million last year. When you make that kind of money yearly, a $27,000 dollar watch is like going for Ice cream. It just doesn’t amount to much money. He usually donates around $700-$800k annually to charity (I work with him, which is why I know his finances) and has no debt. I think a Rolex is a pretty good fit for him.

  12. @Matt: Thanks for your comments–you make a great point. When money is no object, the choice becomes one of lifestyle more than affordability, and as I mentioned in the disclaimer that is a personal choice. I personally wouldn’t get much pleasure from owning a $27,000 watch, because it would be an added source of worry (insurance, maintenance, worry over damaging it, etc.).

    I’m a pretty simple guy. I buy $5 sunglasses because when they break (and they will if I own them) I’ll feel a lot better than if I broke a $200 pair of designer glasses.

  13. Oh Matt, you didn’t let us know how much he makes per hour. I’m sure it’s a lot. (Tongue-in-cheek understatement of the day.)

    I would guess that the only people who think in terms of hourly wages are those in the lower-class to middle-middle class. Maybe some in the upper-middle class would if they bill on an hourly basis (ie.- lawyers, consultants, etc.).

  14. Interesting topics.

    I have a couple nice automatic (mechanical self winding watches), Hamilton and Zen—lower tier swiss watches, way under 1k. I doubt I’d ever buy a rolex. I just don’t like the look of the design of the new ones. Some of the vintage ones are nice. To me it depends on the purpose of the collecting. If it is for pure bling and status that’s one thing. Many though collect mechanical watches like some one would collect old cars, antiques or art. I get why people do that. I guess I get why people do the bling route too, but I just have less respect for that approach. There is definitely an art and a history to the nice watches, and rolex is crafted at a top tier level. They actually are much more durable than other watches of their sort. Though any watch collector will admit that a $10 quartz is more accurate than the most finely crafted mechanical.

    And one of the posts I agree with that for the most part, no one other than other watch aficionado would notice or care what I’m wearing. Though I guess that other people who can afford the most expensive ones (not me) also are familiar with and notice those brands, even if they are not impressed.

    The prices are an interesting story though. Top brands like Rolex do all sorts of things to make sure that their watches are never discounted. Dealers can’t remain dealers unless they keep their prices an an acceptably, very high level for branding purposes.

    I do agree with one post above that hints at the research which is clear that income above subsistence brings very little increased happiness. And it is hard to justify having a watch worth $27,0000 when so many people lack things like heathcare.

  15. I think it’s fascinating that there’s a whole industry dedicated toward driving consumers to feel “less than” if they don’t have the latest status object. That OC housewife who hasn’t “arrived” until she got a Rolex? Arrived where? Is there some mythical destination where one disembarks when one finally attains the status object of choice? This kind of mentality is what’s so bizarre to me.

  16. A couple of the things we have to consider when making an expensive purchase are does it give us pleasure, or does it fulfill a need.

    Sounds like Maurice’s Rolex gives him pleasure. Davids wife feels more comfortable in her SUV. For them, these things may indeed be ‘worth it’.

    For me it is my bikes. Someone else may say how can you spend so much for a bicycle? Who are you trying to impress? But, I have a lot of fun riding, so for me they are worth it.

  17. @David: Regarding the conversion of income/salary to hourly wages, I was merely trying to show how many hours of life energy had to be exchanged to pay for something this pricey. Conversion to hourly earnings is a good way to determine if something is really worth it, even though I recognize very people think this way (what can I say, I’m weird!).

  18. @FrugalDad, I understand what you are doing with the calculation and why it is a good estimator of value to an individual. What I am claiming is that at some point, the calculation and its parallels breaks down quite dramatically.
    When you start making dramatic amounts of income from non-hourly work (and I hope you are able to from your blog, investments, (possible) books sales, or etc.) you cannot break it down to an hourly rate conversion. At some point you simply should determine if the value the item brings is worth the money you will spend on it. What you are worth should have little to do with it unless you are spending outside of your means.

    On another note, I believe that the “research” which indicates that people are no happier when they make more money falls right into the same category as the statement “those with lots of money aren’t happy”. I just think it’s a lot of vitriol that people with less money spread around. I know this will tee people off but I really think that people can be happier when they make more money. It’s not the money that brings happiness, it’s the freedom that having more money brings. The ability to do more things with those you love. One just simply must be sensible about it. Unfortunately, too many times people get confused and work too hard to make more money. It is the person who has shunned everyone else in order to work more and make lots of money. Or the movie star who forgets his/her moral compass and where they came from. For each one of those, there are plenty of examples of people who are very grateful for the money they make (or have made) and the freedom and enjoyment it brings. I would only ask that people not marginalize those who have money. Let’s not degrade what they have or accomplished into a derogatory rebuttal of “but money doesn’t make them happy” just to make yourself feel better. I for one have gotten much happier with the more money I make as it allows me to purchase the things I have desired for so long. Money is not the be-all-end-all in my life, but I do love the freedom it gives me.

  19. @David: Well said! I’ve never really bought into the “money can’t buy happiness” line, either. If I had a lot more money, I would have no debt, fewer worries, and the freedom to do what I truly love, rather than working to a pay a pile of bills. Then again, if I had been more responsible in my youth I wouldn’t have these bills to pay, and wouldn’t need more money to pay them. Either way, I would have more options.

    As you put it, having money provides the freedoms that bring you joy, but the money alone does not bring happiness without those experiences.

  20. Top-of-the-line Patek Philippe watches retail for almost $1 million apiece. Previously-owned, they can fetch much more than that. The most expensive watch ever sold was a 1932 Patek Philippe pocket watch that sold for $11 million.

    I would love to see the look on that “real housewive’s” face if she were to realize that she didn’t really arrive where she thought she did at all!

    As for me, I don’t wear a watch and I’ve never really cared to have a fancy one. My cell phone and blackberry drive my schedule as much as I need them to and then some.

  21. While I agree the Rolex is just plain silly, I won’t buy a cheap watch either. I bought a Citizen Eco-Drive (no batteries needed, ever) for $150 online 4 years ago, and it should be the last watch I ever buy in my life (I’m 42).

  22. @James: I understand your point about new cars depreciating and then becoming classics over time. To play devil’s advocate to the devil’s advocate–there are many new cars that depreciate down to just the cost of scrap, and will never be “antiques.” Perhaps it is different with high-end jewelry because it doesn’t get the wear and tear of an automobile, but even so I’m sure it can be restored much like an old car. The more I’ve written this response, the more I understand your analogy.

  23. I have a Rolex that I inherited from a family member. Don’t like to wear it because I don’t like to “dress up” to its level. It’s not my personality. It is merely a message-sending product and I don’t like the message it sends. Do a good job at work and maybe you will get one at your retirement party.

  24. No offense to those who dig them, but I feel the same way about Coach purses and the like. I’m sure I myself even break the rule sometimes, but generally speaking, I’d rather spend the $ on something more useful (or save it!) than buy a “status item.”

  25. Considering that probably 80% of our brothers and sisters around the planet couldn’t afford the $29.99 Timex (or at least, would consider it wasteful, and have far more ‘necessary’ things to spend money on), I hardly see anything productive about putting Rolex owners on the spot. It would be sort of like Hummer H3 owners feeling all self-righteous in the presence of H1 owners.

    Honestly, unless you are living without running water, indoor electricity, a floor made of something besides dirt (not to mention, a personal vehicle, a modern pair of shoes, and a home computer & internet connection), you basically have no justification to call other people wasteful/excessive, because lots of other people can always one-up you and put YOUR lifestyle on the spot when they are living more modestly.

  26. I’ve actually bought 2 different houses for less than the cost of the rolex. One was $19,000 and on 1/3 acre, rural. Rented it out a few years.I sold it on a land sale contract for $35 at 10.5% interest, 20 years. The other was $22,000, half acre – across the road from city zoning, also a rental for a few years. I sold it on a land sale contract (I carried the paper) for $35,000 also at 11% interest. That 11% interest is very nice coming in like clockwork all these years, with several more to go!

    For me – those were better investments than the watch. But that’s just what worked for me – not for others.

  27. If someone I knew or met wore a Rolex, I’d probably think “fake.” I just don’t live an area where Rolexes seem appropriate.

    On the other hand, I’d be a liar if I said that I wouldn’t be excited to inherit one. That’s the sad truth; I’m still a bit sucked in by the hype. (I put it down to editing a bunch of articles that hyped up expensive watches. Job hazard.)

  28. Spending nearly $30K on a timepiece is a little excessive (at least IMHO) but I can’t really talk because I wear an Omega Seamaster (~$4K) that my wife bought me as a wedding present.

    I find it especially interesting that no one has commented on the engineering skills required to design something entirely mechanical to keep time.

    Frankly, I think it adds a bit of old world class and I’ve enjoyed looking at all the details on the watch — it’s on my wrist every day, regardless of what I’m wearing.

    In any case, I’m not proposing that people go out and buy these things. Or that they avoid them all together. The point is that we all find different things important — it’s about finding balance in what you enjoy: some people spend $30K/year in school tuition, others spend that much on purses, coffee, traveling or other stuff. As long as you’re living within your means, what’s the big deal?

    Anyways, I’m hoping I haven’t opened myself up to getting flamed in the comments here! :)

  29. You still can get a Rolex for less than 10 000 $ – the list price for a simple Submariner is around 5000 €.

    While I personally wouldn’t buy a Rolex because I don’t like the look nor do I have the money freely available I wouldn’t say a Rolex is ridiculous. A well-maintained Rolex is something that will last more than a lifetime – a Timex won’t (on the other hand even 10 Timex are only a faction of the costs of a Rolex).

    I use mechanical watches myself and wouldn’t want to go back using something with batteries – buying batteries every few months/years doesn’t seem very ecological to me, not to mention the hassle of changing it.

  30. I think that a lot of good has come from people who have the drive and money to craft and purchase frivolous items. While it is wrong to idolize people based upon the amount of money they make and show, if the whole world ran on “good enough” then we’d never make progress… although not all “progress” is moving forward.

    Too much value has been placed upon finding the cheapest item that can fill a desire.

  31. the man who buys a rolex doesn’t have financial worries – he doesn’t care if the man serving him super size fries at the drive thru notices – he buys it to show off to his bentley-driving mates – because he likes expensive things – or because he genuinely like the look and feel of a rolex

    isn’t is possible that someone would buy a watch because they like it?

    what’s to say that because that man is rich – he is necessarily unhappy?

    contentment is not derived from wealth or lack of

    people can spend their money (hard earned or otherwise) on what they want

  32. Correction:
    Timex is 10 times more accurate then Rolex
    (quartz error is -0.5s/day, mechanical -5s/day at best)

    Mechanical aficionados on the budget can try generic Chinese. Same mechanical movements, sapphire, titanium, good accuracy. under $100

    Also, check out the $500,000,000 boat one Russian owns. A few there overnight own the whole country when democracy came.
    The time that effectively was slaved for their luxury is estimated not in hours but in millions of lives!

    It is so nice to see so many people here that would rather give 27K to charity than waste on vanity. God bless this country!

  33. I’ve read most of the comments and I think it has been mentioned but I’ll echo it anyways that owning a Rolex is basically just a status symbol or in other words a symbol of the owner’s very own success. For example an insecure big swinging d… may say: “hey there poindexter, nice prius… did you know my Rolex cost more. etc..?” Or a person of refinement, class, and prestige may want to wear a work of art that has a practical function as well as the constant reminder that they are a success and that they have made it. Another point I’d like to make is that gangsters or people who frequent the underground economy use these watches to launder money or transport wealth easily since it is easily worn and concealed from non watch aficiandos or the average citizen who is happy with their infinitly cheap quartz and liquid crystal digital read outs. My final point is a permutation of the above in that most gangsters who are made guys wear the Rolex timepiece and the ones who aren’t wear the Citizen watch. It’s just a way to check someone out without having to ask embarassing questions in public. So the timepiece is not just for keeping time but in essence is a form of communication of certain ideas of one’s identity. But this is just an echo.

  34. Yeah, I have to agree with Paul, I think 30k for a watch is obstentatious, I am not one to talk as I wear a Cartier Tank Francaise 18k Gold (give or take 8k)

  35. Agree completely with the author’s view. I suspect he misses the important point: rich folks often don’t care about ‘value’; they care about, and are ready to pay for, the ‘feel good’ factor associated with owning expensive brands. Utility is secondary.
    If you have money to burn, why not go for the best (most expensive) that money can buy

  36. I’m pretty sure someone who can afford a 30 grand watch doesn’t do work that gets them paid by the hour.They are more likely going to be pro athletes,holllywood types or people who have made a ton of money in a short period of time.Think about it,if you suddenly get a contract for $20 million surely you would celebrate by buying something expensive.

Leave a Comment

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>