An investment is simply defined as putting in money or capital in order to gain profitable returns, as interest, income, or appreciation in value. That’s why I always wondered about women who buy expensive bags and shoes and declare them as “investments”. Do these really appreciate in value? 

But it seems as if when women refer to bags and shoes as investments, what they’re actually referring to is the cost per wear, and not investment per se:

 

“A designer handbag can be an attainable treat to save for, something which can last for years and be passed down,”*

The idea is that if  you splurge on a quality piece, then that piece will last for years and can even be handed down to the next generation, therefore saving you money in the long run. However, it seems to me as if these are more in the nature of savings and not investments, because with investments, the value should appreciate. But I guess investment in the fashion world is not viewed in its traditional sense, so I could argue until I’m blue in the face and nothing will be resolved. Let’s move on.

What really triggered this post was this review of a salon I read in a blog. The salon is operated by a husband and wife team and they have a fairly popular chain of salons, but get this, the husband charges Php6,500 for a haircut!

That’s right Php6,500 for a haircut. Wow.

In defense of the stylist, he’s very well-accomplished, has years of expertise under his belt and has gained the reputation of a master in precision cutting. So if he thinks that his skill merits the Php6,500 price tag, then that’s his business. But what really struck me was how the blogger rationalized the price tag as an “investment”.

Supposedly, the cut is so good that your hair will grow out perfectly and you won’t need to go in for another cut until a few months after. But unless you regularly go for Php1,500-Php2,000 cuts per month, I honestly don’t see how this is an investment (using its fashion world meaning)

If we were to treat a haircut as an investment in its real sense, then that haircut should pave the way to a profitable return. Sort of like how Georgina Wilson or Solenn Heusaff need to pay extra attention to their looks, because that’s how they bag their modelling and endorsement contracts.

I’m reminded of this article I read in a fashion magazine years back. In it, two girls were talking about what they planned to buy, how this bag or pair of shoes was an investment. They went on and on until finally, their banker friend laughed out loud saying that shoes and bags weren’t investments because they depreciate in value. However, the author eventually justified luxury items as investments because you stand taller with that bag on the crook of your arm, or your legs look leaner because of those to-die-for stilettos. In short you feel better about yourself because of your purchases, in effect making it a worthwhile investment.

Personally, I find it troubling to equate your self-worth with the value of your outfit, because how will you see yourself when you wake up sans makeup and fancy accessories? Will you loathe the person you see in the mirror?

Again, I’m sure that there will be a counter-argument to every one of my arguments. But my point is this, if you were to invest in something, spend on (1) your mind; (2) your skills; (3) experiences; and (4) the stock market. Except for the stock market which can plummet by this time tomorrow, no one can ever take away what you know, learned or experienced. You will always have those within reach, unlike shoes and bags which will only grow old and moldy.

*”Designer handbags ‘a good investment’ “, http://fashion-blog.secretsales.com

17 Comments on Investing in Luxury

  1. incarnadine29
    September 16, 2012 at 4:33 am (5 years ago)

    I love this post. I won't bother to explain why, I just love it. 🙂

    Reply
  2. Teeyah.
    September 16, 2012 at 4:49 am (5 years ago)

    I don't have a designer bag just yet so I wouldn't know how that would add to me and my worth. 😀

    As for justifying investments on a fashion world sense, I do splurge on things which will make me earn more, ergo my clothes {source of many raises, on top of being awesome at work HAHA}, my shoes, my training {this is where most of my budget go} and books and not to mention stocks and MFs. Hope I got investment right? =)

    So in that sense, thank you for differentiating CPW and investments 🙂

    Reply
  3. Jillsabs
    September 16, 2012 at 8:21 am (5 years ago)

    Malou: I know why 🙂 Thanks for the links! Will look into investing in bonds as well 🙂

    Teeyah: Oh yeah, you really have to look the part of the successful executive in order to be one.

    Michelle: Thanks!

    Reply
  4. Teeyah.
    September 16, 2012 at 1:10 pm (5 years ago)

    You know, I am amazed at how tactful and fact-ful {is there even a word hehe} you approached this topic =) Galing!

    Reply
  5. Anonymous
    September 17, 2012 at 2:37 am (5 years ago)

    so FRUGAL HONEY BUNNY…. let me ask you… if you were invited? would you say NO?

    I wanna ask the readers…. If anyone was given the chance to have a 6500php haircut for FREE…. would you complain?

    If hairstylists can charge this HIGH meaning to say, there's a market for it.

    No need to rant… and hate….

    Everyone is entitled to their own opinion.

    an investment to them may not be an investment to you.

    as you said, "An investment is simply defined as putting in money or capital in order to gain profitable returns, as interest, income, or appreciation in value. That's why I always wondered about women who buy expensive bags and shoes and declare them as "investments". Do these really appreciate in value? " SIMPLE ANSWER TO THIS SISTER IS, THEY HAVE THE MONEY TO INVEST…. THEY VALUE BEAUTIFUL THINGS THAT LIFE CAN OFFER, AND SO THEY INVEST, BECAUSE IT MAKES THEM HAPPY. SO DONT GO RAINING ON THEIR PARADE. RELAX…

    Reply
  6. Lianne Martha Laroya
    September 17, 2012 at 2:37 am (5 years ago)

    Spot on, ate Jill! (I hope you don't mind when I call you ate. Haha.) I honestly do not see the point in "investing" P6,500 on a hair cut. Will the person earn profit from it? Unless she's a hair product model or a model of some sort, I don't see the point at all.

    And yes, if anything, we should invest on our education & training, experiences and relationships with people. (Investing on the stock market should already be implied there.) 🙂

    Reply
  7. Jillsabs
    September 17, 2012 at 2:44 am (5 years ago)

    Lianne: I don't mind at all you calling me Ate 🙂

    Thrifty Chick: Thanks!

    Anon: Point taken. But take note too that what I wrote about was not the act of purchasing luxury items per se, but purchasing luxury items under the guise of investments. Because they're not.

    You're correct that people buy these things because they like beautiful things and they can afford them. And that should be reason enough, there's no need to justify your purchase by saying that it's an investment. Just say "I can afford it, I want it, keri ka na lang".

    And you're also correct that there's a market for 6.5k haircuts, but what I was driving at was if you have to save up for that haircut, again rationalizing it as an investment, then you're better off investing your money elsewhere.

    Reply
  8. Anonymous
    September 17, 2012 at 10:51 pm (5 years ago)

    If we were to treat a haircut as an investment in its real sense, then that haircut should pave the way to a profitable return. Sort of like how Georgina Wilson or Solenn Heusaff need to pay extra attention to their looks, because that's how they bag their modelling and endorsement contracts.

    I'm reminded of this article I read in a fashion magazine years back. In it, two girls were talking about what they planned to buy, how this bag or pair of shoes was an investment. They went on and on until finally, their banker friend laughed out loud saying that shoes and bags weren't investments because they depreciate in value. However, the author eventually justified luxury items as investments because you stand taller with that bag on the crook of your arm, or your legs look leaner because of those to-die-for stilettos. In short you feel better about yourself because of your purchases, in effect making it a worthwhile investment.

    Personally, I find it troubling to equate your self-worth with the value of your outfit, because how will you see yourself when you wake up sans makeup and fancy accessories? Will you loathe the person you see in the mirror?

    **Purchasing (or in this case, "investing" in) a luxury good or service is NOT to equate your self-worth with the (monetary) value of your outfit, your hair cut, etc. but to either collect an item purely for its rarity or exclusivity, or out of sheer passion, or to experience something unique and fulfilling. Again, the reasons vary here from person to person as there are many reasons to why people invest in stocks, bonds, etc. It boils down to a investment behavior.

    Again, I'm sure that there will be a counter-argument to every one of my arguments. But my point is this, if you were to invest in something, spend on (1) your mind; (2) your skills; (3) experiences; and (4) the stock market. Except for the stock market which can plummet by this time tomorrow, no one can ever take away what you know, learned or experienced. You will always have those within reach, unlike shoes and bags which will only grow old and moldy.

    **There you go, as you said: INVEST IN EXPERIENCE. And I quote "No one can ever take away what you experienced" So as the experience of owning those covetable pair of Louboutin pumps and a collection of Hermes Birkins (prior to growing old and moldy).

    **Owning a luxury good or experiencing a luxury service is after all in investment made by people who understand its true value. Nothing absurd / wrong about it as long as you are not stepping on anyone's Roger Vivier shoes 😉

    Reply
  9. Anonymous
    September 17, 2012 at 10:51 pm (5 years ago)

    But it seems as if when women refer to bags and shoes as investments, what they're actually referring to is the cost per wear, and not investment per se:

    "A designer handbag can be an attainable treat to save for, something which can last for years and be passed down,"*

    The idea is that if you splurge on a quality piece, then that piece will last for years and can even be handed down to the next generation, therefore saving you money in the long run. However, it seems to me as if these are more in the nature of savings and not investments, because with investments, the value should appreciate. But I guess investment in the fashion world is not viewed in its traditional sense, so I could argue until I'm blue in the face and nothing will be resolved. Let's move on.

    **I agree with you. For other people, investment is viewed differently. I believe you figured it out in the paragraph above.

    What really triggered this post was this review of a salon I read in a blog. The salon is operated by a husband and wife team and they have a fairly popular chain of salons, but get this, the husband charges Php6,500 for a haircut!

    That's right Php6,500 for a haircut. Wow.

    In defense of the stylist, he's very well-accomplished, has years of expertise under his belt and has gained the reputation of a master in precision cutting. So if he thinks that his skill merits the Php6,500 price tag, then that's his business. But what really struck me was how the blogger rationalized the price tag as an "investment".

    Supposedly, the cut is so good that your hair will grow out perfectly and you won't need to go in for another cut until a few months after. But unless you regularly go for Php1,500-Php2,000 cuts per month, I honestly don't see how this is an investment (using its fashion world meaning)

    **Again, going back to my argument above, others view their investments differently. As per this person, a hair cut is an investment. Perhaps, for her an alternative investment. Something that she puts value into (not monetarily) but with the result (the "return of investment" here being her satisfaction or experience) she gets.

    **Now more than ever, luxury goods/services are considered investments. As the rate of high net worth consumers increase globally, so as their interest in investing into these things. In this world aka "investing world," these are regarded as emotional assets. (see ref: http://www.pwlcapital.com/pwl/media/pwl-media/PDF-files/Cameron%20Passmore%20Assets/EApaper.pdf )

    Reply
  10. Anonymous
    September 17, 2012 at 10:51 pm (5 years ago)

    **I may not be a financial / investment guru but one thing I really am passionate about is LUXURY. Let me give constructive counter-arguments with some of the points in this post below:

    An investment is simply defined as putting in money or capital in order to gain profitable returns, as interest, income, or appreciation in value. That's why I always wondered about women who buy expensive bags and shoes and declare them as "investments". Do these really appreciate in value?

    **I agree with the definition of investment here but I believe you missed out one important point: a "FINANCIAL" investment expects a security of return WITHIN AN EXPECTED PERIOD OF TIME. And I quote, financial investment. There are several types of investments (financial, economical, ALTERNATIVE, etc.)

    **ALTERNATIVE investment is defined by non usual investments such as tangible assets like art, coins, luxury watches and other luxury goods/services. Other financial assets such as hedge funds, real estates, etc.

    **These women you refer to in your first paragraph I believe are investors of alternative assets. They invest on luxury goods like expensive bags and shoes. Do they appreciate in value? Well, in what sense? Monetary/price? I believe the term "value" here is relative.

    **Monetarily, in some cases, these items increase in value such as vintage bags. Say for example a vintage limited edition pieces as they are rare/one of a kind.

    **While others consider the "value" of these "investments" in terms of their worth, merit, or desirability to some extent equate it to its experience.

    Reply
  11. Jillsabs
    September 17, 2012 at 10:55 pm (5 years ago)

    Anon: Thanks for the feedback! The alternative view is very enlightening 🙂

    Reply
  12. The Sunset Goddess
    November 6, 2012 at 3:06 pm (5 years ago)

    I like your reminder about investing on experiences and skills 🙂 Exag naman yang P6,500 haircut! I like a good haircut and salon services too but I think anything beyond P2K is too much!!

    Reply
  13. Jillsabs
    November 6, 2012 at 3:20 pm (5 years ago)

    Yeah, I can't imagine spending that much on a haircut either. But if you can afford it, why not right? Kanya-kanyang luho lang yan.

    Reply
  14. Burnt Raisin
    January 7, 2013 at 9:23 am (5 years ago)

    I soo love how you write Jill. This post is very enlightening. It's about time I analyze why I'm buying what henceforth.
    Hats off to you!

    Reply
  15. Jillsabs
    January 7, 2013 at 9:31 am (5 years ago)

    Thanks!

    Reply

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