People who have the means often buy expensive things. It’s never about showing off how much money they’ve made, but about investing in something that is lasting, or starts a conversation.
The fact is if someone can afford to buy something pricy and branded, then it’s their priority. There is such a thing as “investment pieces”; clothes, watches, jewelry, or art that can sometimes cost quite a bit. They’re called investment pieces given the amount that’s devoted to them, and the possibility of selling them for a profit later on.
Even then, there are pros and cons to splurging on them. If you’ve considered investing in watches or expensive handbags instead of mutual funds or stocks, you need to know what you’re getting into – and whether it’s worth the expense.
Read more: What You Should Know About Green Investments in the Philippines
The Pros
Investment pieces carry a kind of status on their own in the case of certain pieces such as art. As prolific as an artist of your choosing can be, it is never a guarantee that the value appreciates over time. What may be the biggest factor in investing in a piece of art is finding a piece that you like and can afford.
An example of investing in art is getting posters from films. You get to indulge your film nerd and have a piece of movie history in your living room. A poster from sci-fi epic Metropolis reportedly has an estimated value of $47,000, just to give you an idea.
Investment pieces in fashion are arguably stylish, and can complete a wardrobe, as well as have some potential for profit when you resell. Chief merchant of The RealReal (a luxury consignment site) Rati Levesque says, “it’s all about the pieces that are most iconic to that brand,” when it comes to investing in fashion. When it comes to ROI, items that are waitlisted or limited edition are your best bets.
Accessories can provide an even higher ROI than clothes, as they withstand wear better. Watches can span generations if well-cared for. Investing in a watch that’s well made – like a Rolex Daytona, or a TAG Heuer Monaco – takes a bit of research and picking the right piece is fun. If you play your cards right, that $1,500 watch could be resold for $3,000 in two years.
And yes, that Chanel bag could be a good investment, too – but you have to go after limited editions like the 2.55 to make money.
Even shoes could be an investment, as Louboutins consistently command the highest ROIs in the shoe category.
The Cons
It’s hard to predict the future value of items like these. Lloyd Amsdon, founder of Watchfinder, has stated that you need to be a trendspotter when you want to make sure that the piece you buy appreciates over time, if you ever choose to sell it.
Art investing is also equally difficult. As an investment, it’s illiquid (meaning that you can’t easily convert it to cash if the need arises) and odds of poor performance can cause a piece’s value to drop.
These are items that require plenty of thought and funding before you make that final purchase. You need to be aware of the fact that as far as these go, you’ll be setting yourself back thousands and thousands of pesos that you may be able to allocate to more liquid and profitable investments such as mutual funds or stocks.
Final Thoughts
Investment pieces are, at the end of the day, something you get for yourself as a reward for working very hard to get where you are. Picking the right piece requires a little research, and working within your set price tag. If you choose to part with it someday, you may not get the most ROI, but you can say that you had something nice for a time.
DISCLAIMER: Information published on this blog or elsewhere on www.moneymax.ph should be used for general information purposes only and does not constitute investment advice, performance data or any solicitation or recommendation that any security, investment product, transaction or investment strategy is suitable for any specific person. This material does not take into account your financial situation, risk tolerance level, investment experience or objectives; all of which are unique to you. Before acting on information on this blog, we suggest consulting an independent professional to advise you on the risks of any decision and the extent of any exposure to loss.
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