Everyone occasionally has the urge to splurge on an ultra-luxe item that elevates your home, personal sophistication or overall lifestyle. Regardless of net worth, any time you’re thinking about buying luxuries costing four, five or six digits, it’s wise to consider whether the item is worth the high price tag. That determination is partly subjective based on how much joy you anticipate it will bring you.
But don’t forget about the financial consideration. Even if you can afford a luxury, you want to know that it will have resale value. Your money is best spent on items that can maintain all or a significant portion of their value. The most worthwhile things actually have the potential to increase in value during your ownership. So, we’ve researched the appreciation potential of five popular luxury items.
If you’re ready to invest in a handbag on the highest end of the price spectrum, you can easily spend several thousand dollars. Those that perform well on the resale market typically feature these characteristics:
- Neutral colors and seasonless designs that don’t go out of style
- Limited editions or colors that increase their market demand
- High-quality materials and manufacturing that help ensure they stand the test of time
Certain brands are widely recognized for their iconic designs and superior craftsmanship, typically making them worth the cost. These include the likes of Bottega Veneta, Chanel, Dior, Gucci, Hermes and Louis Vuitton. According to this podcast, luxury collectible handbags are now considered as much an investment of passion as fine art, with the most in-demand pieces selling at auction for record prices.
For example, various limited edition Hermes handbags recently sold at auction above their pre-sale estimates, including the following:
- Leather Birkin with gold hardware ($40,320)
- Leather Mini Kelly 20 II with palladium hardware ($35,280)
- Leather and crocodile Birkin with palladium hardware ($30,240)
Vintage Designer Clothing
Hollywood stars are famous for walking the red carpet in vintage garments, such as classic Dior gowns or Oscar de la Renta tuxedos. Do you want a similar piece to grace your closet? Again, those fetching high prices on the secondary market are typically storied brands known for their timeless designs.
Beyond Dior and de la Renta, this includes some of the world’s most famous fashion houses, such as Britain’s Vivienne Westwood, France’s Yves Saint Laurent or Chanel and Japan’s Comme des Garçons. Among these designers’ pieces, those still in excellent condition that were originally made by hand with the highest quality materials often make the best investments. Luxury reseller, Vestiaire Collective, notes that each of these vintage designer pieces resold for a pretty penny:
Experts agree that the timepieces of certain Swiss luxury watchmakers consistently hold their value due to their long histories of high-quality manufacturing and materials. These recent auction results at various price points help prove it:
- Audemars Piguet: 18K yellow gold wristwatch ($15,120)
- Omega: 18k rose gold triple calendar wristwatch ($8,190)
- Patek Philippe: 18K yellow gold watch face with perpetual calendar ($60,480)
- Rolex: Wristwatch made of rare steel ($40,320)
- Vacheron Constantin: 18k yellow gold wristwatch ($5,670)
Jaeger-LeCoultre and TAG Heuer also make this list.
Works of art have long been favorite investments of passion for people of means. But as the saying goes, art is in the eye of the beholder. So unless you’re talking about an original from Picasso, Warhol, Lichtenstein or some other renowned artist or much feted up-and-comer, you’re taking a chance that a piece that aesthetically awes you will appreciate in value.
Even so, there are smart ways to make a good art investment and join a global market that reached $67.8 billion in sales in 2022 alone, according to Art Basel:
- Look for original or one-of-a-kind works.
- Visit museums, galleries and auction houses to learn more about the art market.
- Enlist the help of gallery directors and curators to learn more about specific artists and to determine a piece’s provenance, or ownership history.
Speaking of popular luxuries, let’s talk about classic cars. Historically, the so-called blue chips, those that consistently hold their value just like blue chip stocks, have been the most valuable investments in this market. But they’re also the most expensive to attain. MotorBiscuit says the market value for blue chips like an original Shelby Cobra, Pre-WWII Bugatti and Ferrari 250 or Testa Rossa can range from $500,000 to over $1 million.
Fortunately, there are affordable classics available at lower entry points. Resources like Hagerty, which features a price guide and Bull Market List, can help you determine which vintage vehicles are appreciating in value.
More Tips Before and After You Buy
Whether your luxury wish list item is for enjoying yourself, gifting for a milestone anniversary or expanding your lasting legacy, it’s important to understand that such items aren’t super liquid. They might take a while to sell at or appreciate to your desired price. Furthermore, it’s wise to authenticate their origin and condition by purchasing from respected dealers and/or using experts to assist you.
Once in your possession, protect your investment by adding it to your home inventory, safeguarding it with a security system and getting adequate insurance coverage, which may include a rider, or policy add-on for your luxury item.
Editor’s note: Quorum derives no benefit from these businesses for placement in this article.