luxury

Nov

2021

Designer Handbags as Investments

Reading Time: 3 minutes

Women love bags. Bags are not only useful, they also complete an outfit. Bags are included in the basic fashion must-haves. They can also serve as statement pieces. But did you know that designer handbags can be part of your investment portfolio too? Yes, you have read it correctly: designer handbags as investments.

Although there are many different styles and brands to choose from, more and more women dream of owning at least one designer handbag that will make their outfit look so much better and make them the center of attraction.

The shoes make the man…the handbag makes a woman.
– Milton Pedraza, Chief Executive Officer of the Luxury Institute of New York

Unfortunately, not everyone can afford to buy designer handbags. Characterized by certain features like timeless appeal, impeccable style and quality materials used that are meant to last long; designer handbags come with a huge price tag. That is why some women opt to settle for knock-offs thus, making the counterfeit bag market a billion dollar industry.

Yes, luxury bags are expensive but did you know that some handbags can be considered as investments? Based on a study made by an online bag seller BagHunter.com; luxury handbags have gained value faster than the stock market.

Hermes Birkin

Take the Hermes Birkin bag for example. The famous Birkin bag has increased in value by more than 500% ever since it was first produced in 1981, outperforming both the stock market and other precious commodities such as gold. Not everyone can buy an Hermes Birkin Bag. It is considered a limited edition bag because it is only available for purchase to special clients of Hermes. Thus, it has now become the new status symbol for women.

In most cases than not; the value of your Birkin bag will increase as soon as you walk out of the Hermes store. Why? Because it is so difficult to buy one. Even if you are fortunate enough to be considered eligible to buy a Birkin bag, Hermes still puts a limit on how many you can buy in a year. That’s how exclusive the bag is. The limited supply fuels the price growth, which is predicted to double in the next 10 years.

Chanel 2.55

Another bag that beats the performance of the S&P 500 and the real estate prices in the last few years is the Chanel 2.55, the famous Medium Classic Flap Bag by French luxury fashion brand Chanel. First sold at US$200 in 1955, it now sells at US$6,900. Just a month ago, Chanel announced that it is putting a limit on the number of purchases for their popular bags. The One Bag Per Person Per Year policy will surely jack up the price of the Chanel classic flap bag in the second-hand market.

Keep in mind though that while designer handbags are all of good quality, not all of them are worth purchasing…at least investment wise. Like other luxury items, the monetary value of the majority of luxury handbags depreciates as soon as you leave the store.

IF you want to purchase one as an investment piece, like any investment vehicle, you need to do due diligence first before buying your first investment bag. Follow the investment rules. Do your research first.

If you want to own a designer handbag for personal use, it is best to buy a classic and timeless design, something that will never go out of style. A bright blue bag may be popular now but do you think that color will still be fashionable a few years from now? If you take care of your timeless piece properly, who knows, its value might appreciate later on.

Feature Photo by Anne R from Pexels

Updated Version. First Published in Pinoy Smart Living on 10.17.2016

Nov

2021

The Allure of Limited Edition Items

Reading Time: 3 minutes

In 1985, one of the most iconic Nike shoes ever, Air Jordan 1 was released. The basketball shoes were designed for famous athlete Micheal Jordan. Today, more than 35 years later, the shoes are still as popular as ever. In fact, it is now a multi-billion dollar worldwide sensation. The shoes are no longer just basketball shoes but a fashion and marketing phenomenon. With various design innovations, Air Jordan has now become hype. Hype means an extravagant item that only a limited number of people in the world can own. It is a sort of marketing strategy for luxury goods. In other words, exclusivity becomes the main selling point. Yet, people still buy it. In fact, some Air Jordans models are now being sold at a hefty price of over $100,000 per pair. That is the allure of limited edition items.

Exclusivity

This phenomenon is not just happening in rubber shoes. It is also true to luxury watches, designer bags, cars and many more items out there. In economics, you call them veblen goods. Investopedia defines a veblen product as a good in which demand increases as the price increases. This means as the items become more expensive so is the demand for these products.

How are these products different? Limited edition items are actually just renditions of the original product but with a little alteration in the design detail. Typically. brands collaborate with other brands to have access to new markets. For example, athletic brand Nike collaborated with luxury brand Dior to release the Air Jordan 1 High OG Dior limited-edition sneaker that they sold for $2000 dollars but is now available in the after market at a hefty price of more than $10,000 each pair.

So, why do people buy expensive limited edition items? Although these items are high quality goods, their selling price and even the after market values do not make sense anymore. The answer is simple: people buy them for their exclusivity. Imagine owning something that only a handful of people in the world have. This is their biggest selling point. What it offers is actually a status symbol. So people are willing to buy second hand goods for a hefty amount just to be part of that exclusive group of people around the world who own that specific product.

Is it Worth it?

The answer is it depends. Buying an expensive limited edition item is all right if you can afford it. The money jar budgeting system allocates 10% of income for play account. So, if it falls within your 10%, why not? You deserve to reward yourself every now and then for all the hard work that you have been doing. It is definitely not worth it if your main purpose is just to keep up with the Joneses. And worse, if you are going to use your credit card and be buried in debt just for a status symbol.

But of course it is different if you are buying it to earn money. However, just like any business it comes with risks. Just because it is a limited edition item does not necessarily mean it will appreciate in price in the after market. You still need to do your due diligence. One of the investment rules from the Richest Man in Babylon is that never enter an investment or a business that you are not familiar with. So, make sure you know what you are getting yourself into.

In short, there is nothing wrong with wanting to own limited edition items as long as you can afford it. But if you can’t, it does not make you a lesser human being if you don’t have what your friends have. If you have a problem fitting in, then you are in the wrong crowd. At the end of the day, it all goes down to loving yourself. If you do, you will be confident about who you are. You will understand that your material possessions do not define who you are.

Feature Image by Pexels from Pixabay