The luxury-products market exerts a peculiar fascination among consumers. From dazzling high-end watches to exclusive shoes and iconic bags, these items are perceived as symbols of status and sophistication. However, behind their glitz and glamour, a simple question arises: Are these coveted items really worth their price?, What is their real value over the years?, Do they represent a good investment or are they an expense?
"In recent years, luxury of all kinds has become obscenely, disgracefully, inconceivably costly. And the price hikes we’ve seen are steeper than what inflation would dictate," Katharine K. Zarrella points out in her article "Obscene Prices, Declining Quality: Luxury Is in a Death Spiral", published in The New York Times.
"Today, instant gratification, profit and appearances are more desirable than substance, depth or intrinsic worth," reflects Zarrella, highlighting that in the luxury sector the trend is towards inferior quality and excessive prices.
Big Luxury Brands: Mismatch Between Price and Quality
Many luxury products do not offer a quality level proportional to their price. A handbag, a pair of shoes, or a watch can cost tens of thousands of dollars, but their durability and functionality don't necessarily outperform lower-cost products. In many cases, it is the brand, rather than the materials or workmanship, that makes them deliberately expensive. Those exorbitant prices make them objects of desire wrapped in an exclusivity veneer.
Illusion-Based Prestige
Katharine K. Zarrella highlights several examples of disproportionate inflation in the price of luxury items, whose only apparent justification is to shore up the prestige of their brand via unaffordability, making them more desired. Zarrella mentions how "From October 2019 to April 2024, the cost of Prada’s popular Galleria Saffiano bag increased 111 percent. In the same period, the cost of Louis Vuitton’s canvas Speedy bag doubled, and Gucci’s Marmont small matelassé shoulder bag went up by 75 percent. Chanel is particularly notorious: Its iconic medium 2.55 leather flap bag, which cost $5,800 in 2019, will now set you back $10,800 — and is increasingly the subject of quality complaints".
Paradoxically, used branded luxury items rarely increase in value over time, with rare exceptions applicable to the case of pieces considered “collectibles.” For this reason, as indicated in the New York Times article, it is common to see Instagram flooded with attractive images of models posing with this type of coveted items due to the "the rise of resale (people disposing of their used luxury wares, usually at deep discounts) or dupes (similar-looking copies that trade for far less). And a growing number are superfakes — highly convincing counterfeits that seemingly offer similar quality for a fraction of the cost."
Why Gold is an Investment?
The value of gold is not based on “branding” or fashion trends, but in its intrinsic value, a result of its extraordinary rarity, its unique physical properties and its virtual indestructibility, remaining a solid standard of wealth throughout the centuries. Therefore, gold by not depending on fads or passing perceptions, represents an investment that, for centuries, has appreciated over the years.
Unlike brand-new luxury items, whose value decreases over time, the price of gold increases over the years. As an example, the ounce of gold went from US $1,550 dollars in January 2020 to US $2,750 dollars in January 2025, an increase of over 77% in just 5 years. In contrast, the same amount invested in a luxury product would have, in the vast majority of cases, incurred considerable losses when its owner would try to sell it.
The Wall Street Journal published an article in which it reveals how Christian Dior bags, which retail for over US $2,500, actually cost US $57 to manufacture. With this information revealed, how much do you think these bags could resell for once pre-owned?
Luxury Items vs Gold: Which is a True Investment?
Behind the glamour of luxury products lies a dark secret; their prices are often artificially inflated. The quality of these items in many cases does not justify their high prices, and far from preserving their value over the years, they usually end up being worth a fraction of their original price. Buying luxury products may be tempting because of their superficial appeal, but in the long term it is rarely a good financial decision. Gold instead offers stability, liquidity and the ability to protect your money against inflation and economic uncertainty; a feature that luxury products cannot match.
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