Gen Z women are being sold a risky dream: the realities behind ‘investing’ in designer bags like the Hermès Birkin
- While generation Z turns to social media for financial adviceLuxury handbags are presented as the next high class of assets. “When a man tells you to invest in the stock market, but you know that the Hermès Birkin bags give you a better return on investment,” said an influencer. But experts are not so safe.
If you have already ventured on the financial side of Tiktok (also known as Fintok), you may have left convincing advice on what you need to do with your money.
Among the sea of information, you can even find breeding ideas on how to surpass the S&P 500. For any experienced investor, it is a difficult sale, especially on the rocky market today. But for the Zers generation which may not know better, the idea is intriguing and this has led to an influx of young women in particular who have been informed that investing in luxury fashion products, such as the Hermès Birkin bag, could be a better bet than proven investments.
“Whoever says that handbags are not an investment are lying”, ” A Tiktok user posted. “What I hold in my hands (a Hermès Birkin bag) is undoubtedly a better investment than the S&P 500, stocks and gold.” Another channel called Chanel associates the “best investment you can make”.
It is true that certain luxury products have had value jumps; according to Sotheby'sThe annual growth rate made up of 40 years of a Birkin bag is 5%. In 2024, the Birkin Sellier bag saw an increase of 52% in annual shift, according to Elizabeth Layne, the marketing chief at Reprimand—A luxury resale business. On another site, RealreAlBirkin is sold on average 34% above the PDSF, 11% compared to last year, said the associate director of fashion and strategic partnerships of the company, Noelle SCIACCA.
However, financial experts warn that the advice that bags can replace more reliable and accessible traditional investment tactics are simply misleading and could be dangerous for those who have no appropriate knowledge.
Bring fashion data
The intersection of data and fashion is an area which, according to Madé Lapuerta, lacks the most of the conversation. His Instagram account, Data but make the fashionwhich now has more than 500,000 subscribers, has exploded in popularity as an avenue so that women of the Z generation can find an interesting and easy -to -read analysis on the price changes in luxury products.
“Shopping should not always be a horrible decision [or] A horrible use of your money, ”says Lapuerta Fortune. “Worrying about fashion and luxury is not a stupid thing. This is a very intelligent thing, and here is the information I want to give you so that you can understand it.”
With training in consultation and data science, she admits to assimilate luxury fashion with intelligent investments that always raise eyebrows – in particular considering that the world of investments has always been dominated by men. Take for example, two of his messages:
“When the stock market is blocking, but I put all my savings in my collection of shoes”, ” A message saidshowing the resale price compared to the retail price of popular sneakers, such as Dior Air Jordan 1 High. “When a man tells you to invest in the stock market, but you know that the Hermès Birkin bags give you a better return on investment”, ” says another, including a two -bars basic graphic showing that Birkin appreciated 24% more on average than the S&P 500 market in the past five years.
While the messages have been examined in the commentary section due to an appropriate lack of context on obstacle differences in the entry and liquidity of the stock market in relation to the purchase of a good property, Lapuerta says that it finds it important to help people understand that fashion is something that has an investment potential.
“When you really break it down, young people are very interested in investing,” says Lapuerta Fortune. “There is so much uncertainty in the world. People want to make sure they make intelligent decisions, then to be able to say very simply, as, this bag appreciates so much value.”
But she also says that having a diversified fan of investments is important.
“I understand that there are traditional canals. I have a large savings account that interests me. I invested in the S&P 500; I think it's smart. ” Said Lapuerta. “There are so many smart ways to invest your money, and in no case tell people that the only way to do it is with a Birkin bag.”
An investment of $ 10,000 10 years ago in a S&P 500 The index fund was now worth more than $ 30,000 thanks to compound interest. But for a birkin, which had a starting price of around $ 12,000 in 2015, the investment yield strongly depends on the color, state and demand of the bag. For example, Sotheby's sells two Hermes bags from 2015: A It's on the market for $ 17,500 and another For $ 24,500.
The complexities of the purchase of luxury products
There is a list of warnings behind the purchase or “investing” in luxury products that take place often unspeakable.
First, the value of a product depends everything that depends on the whims of fashion trends – which could change overnight by celebrity approval or viral video. For this reason, it is not quite clear if Birkin Bags, for example, will be worth money in a decade – or if you can find someone to buy it (and believes that it is not an imitation). And since the state of a product is essential, investing probably means that you can never even use it by yourself – just let it stand in a cupboard.
In addition, the purchase of new luxury products is actually much more complicated than what we could expect; Instead of simply appearing in the store to make a purchase, relationships must often be cultivated – by putting most “investors” buying on the resale market anyway.
In reissue, some articles are labeled as “investment documents[s]”, Who says Layne indicates that the style has shown” a coherent value retention, a historical assessment and a high demand for resale “and adds that luxury products can be a” additional informed active in any diverse portfolio “.
“The bags of creators, in particular of brands like Hermès, Chanel and Louis Vuitton, are among the less volatile collection assets and have some of the lowest correlations with stocks,” explains Layne Fortune. “This can be particularly important in an uncertain economic period.”
It should also be noted that REBAG reminds customers at the top of each page of its website that they can buy goods for more than $ 30,000 using Affir, Buy now, pay later. Even if it may look like a cheat code – buying an investable product even when you don't have enough money at the moment – it could dramatically harm the finances of certain people for the years to come.
The best investment advice? Stick to the basics, say the experts
Allyson KielA private wealth adviser in Synovus Bank, says that most new and glamorous investment opportunities are probably too beautiful to be true.
“Although social media can be an incredible tool, don't let it be your Bible,” says Kiel. “You don't know what people are motivated or what the endorsements come from. And so you really have to take this with a grain of salt. ”
As a tactical investment “news” appears on your flow, millions of others have probably beat you.
“If you've heard of the latest best investment in a cocktail, you've probably missed it,” she said Fortune.
Noah KernerCEO of Financial Service Company Acorns, says it follows the wisdom of billionaire Warren Buffett: “When people are greedy, be afraid.”
“It is better to approach life with philosophy that there is no rapid diagram to become rich, because there is none,” explains Kerner Fortune. “Of course, there are these aberrant values which have become rich quickly by winning the lottery or which have succeeded in timing the cryptography market in an appropriate manner, but for the rest of us is a terrible strategy. The only way to become rich is to become rich slow.”
Getting the basics of proven and true – like saving more than you spend and maximizing your employer's 401K match program can lead to the greatest winning opportunity, paired with the least stress, adds Kiel.
“The younger you are when you start this trip, the longer your track and the more wealth you will generate.”
This story was initially presented on Fortune.com
