One may ask, is it worth an investment if I purchase branded bags and watches? How about branded clothes and shoes? As for the latter, for obvious reason, they easily depreciate more than bags and watches, making them not attractive investment.
Thus, our focus will be mainly on bags and watches. We go back to our question can you get a good return for your money when you invest in those items? It can be a good alternative to stocks and bonds but these items should never be a major investment. It should only be a part of your portfolio of investments if you want to diversify and if you want to have more alternatives to your investment preferences (lofficielibiza.com dated 6.20.23).
For the past decade, if the stock market was up by 10 percent and gold by 21 percent, a certain famous luxury bag can also go up to 100 percent. In 2005, if this bag cost around $1,650, today it costs more than $10,000 – that’s only after 10 years! Another famous luxury bag which costs $4,000 a decade ago now costs more than $11,000!
My curiosity was triggered when I saw the huge bag collections (of those who can afford of course) that are just kept in cabinets and some of them are not even used by the owner. Some of these are business people and I am pretty sure they do not only collect for museum showcases but they are careful their money will give them the return they need. Although there are some people whose hobbies are just collecting luxury bags but then they are the ones who do not need the money to turn it into an investment.
However, you can only realize a profit when you sell these items. There are pre-loved or vintage shops who are willing to buy your items as long as you keep it in good condition and you preserve the original certificate and packaging as evidence that these are authentic and legitimate. And be careful because not all bags have good resale value so it still depends on the brand and the demand and features. Research the shop where you will entrust your items and ask around for those who already have experiences dealing with these shops.
If you are looking to invest in a good bag, choose one that is classic and timeless, meaning it never goes out of style. While colorful bags are attractive, neutral colors and designs are always the best-sellers and better shy away from trendy pieces. Moreover, spend what only you can afford. As with any investment, do not go far beyond what your budget will allow. Although branded popular bags are far better than luxury clothes and shoes, they are also considered consumable, thus, the price of a bag is not always guaranteed to increase significantly.
As for popular luxury watches, these are accessories which among the jewelry items which prices can increase significantly over the years. But, of course, these are brands in the market that are constantly increasing in value. Although the prices can be shockingly high, their value also increased incredibly high. This will depend, of course, on the brand and the watch’s condition.
In the past, luxury bags and watches can be highly speculative and volatile, but lately it has gradually changed since the sought-after brands’ prices have been increasing hugely; so that makes the bag you purchased years ago appreciate in value, too. Another reason why prices are going up is because of the scarcity and consequently the growing demand.
People also buy branded bags because of their quality that could last a lifetime. But, if you buy synthetic bags, how many bags will there be for disposal and adding to the worsening climate change and carbon footprints.
In contrast to cars and vehicles, whether luxury or not, you don’t only get to wear your watch always but you can easily turn it into cash because of the nature of the market which makes it possible to sell good branded luxury watches easily. Furthermore, luxury cars and vehicles, which depreciate overtime, you can wear your watch everyday and still retain its value.
Not many of us can afford these luxury bags and watches; but it should not prevent us to look for investment alternatives in the future. What looks like a vanity purchase, can after all be a good investment, what with interests in deposits in the banks being overtaken big time by inflation.
(Wilma Miranda is a Managing Partner of Inventor, Miranda & Associates, CPAs, Chair of the Ethics Committee of FINEX and member of the Board of Directors of KPS Outsourcing, Inc. The views expressed herein do not necessarily reflect the opinion of these institutions.)