Your income, HHI, and spending on “luxuries”

[Anonymous]

HHI $500K
Clothing from Jcrew level stores, on super sale. Maybe once a year I'll buy a dress for something like $200 (on sale) at Bloomingdales or similar. Expensive clothing just looks so much better now that I'm almost 50.
I can't do Old Navy anymore (at this age).

No money spent on jewelry or other luxuries. Drive crappy cars, fly coach, furniture is ratty. No household or yard help.

We have a beach house (bought for $330K years ago) and we have 2 kids in private high schools. There are our luxuries. I wouldn't do the schools again but what's done is done. Actually I wouldn't do the private for one kid--she would have soared anywhere. For the other kid it's been a fantastic fit and has turned a fairly apathetic teen boy into someone excited about school and the world around him.

But basically we live a typical American $150K lifestyle on $500K (with the luxuries of a beach house and private schools). I say $150K because that used to be our income and our lives have not changed much from this point (aside for the second house and private school).

[Anonymous]

I make $95k and have net worth of about $1 million. I am thinking of a one time splurge on some jewelry, the kind that can be worn everyday and passed down. However I still feel guilty and started looking at used designer sites because I just can’t justify spending on new! Seems like a waste. Same with cars! I guess my 20’s hipster vintage and thrift-buying ethos is still going strong. This isn’t to say I don’t care about fashion - I love standout pieces I just don’t want to pay for them. In non-social media world aka real life, dressing nicely doesn’t require much money, at least where I live.

[Anonymous]

Anonymous wrote:Our HHI is around 800K.

I think it's important to realize that certain luxury brands hold their value or go up in value, so I treat these as investments not as expenses.

For jewelry, Van Cleef and Cartier hold their value very well. For bags, the classic Chanel flap bag and the Hermes Birkin (if you can get your hands on a new one) have appreciated at the same rate as the S&P 500.

So it depends... would I "waste" $2500 on a Gucci or YSL bag that will lose more than half its value in a year? probably not, but I will save up for a small piece of Van Cleef jewelry for $5000. The former is an expense, the latter is an asset.

Someone drank the kool-aid

[Anonymous]

Our HHI is close to $500K.

We both bought nice cars this year- but traded in 12 year old vehicles and put down half the value in cash.

I don't own a designer handbag and have no need for one.

I bought a $300 bracelet earlier this year. It is sterling silver and pretty.

We like vacations. We spent two weeks in Europe last summer. We are going to Caribbean for spring break and will probably do another big two week vacation in July. We will probably spend $30K on travel.

[Anonymous]

HHI $1m

Jewelry: $0
Designer clothing: $0
Handbags: ~$150/y on average
Cars: we just replaced our old cars and spent close to $200k on two cars that we plan on keeping for 10+ years
Vacations: ~$40k/year.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Our HHI is around 800K.

I think it's important to realize that certain luxury brands hold their value or go up in value, so I treat these as investments not as expenses.

For jewelry, Van Cleef and Cartier hold their value very well. For bags, the classic Chanel flap bag and the Hermes Birkin (if you can get your hands on a new one) have appreciated at the same rate as the S&P 500.

So it depends... would I "waste" $2500 on a Gucci or YSL bag that will lose more than half its value in a year? probably not, but I will save up for a small piece of Van Cleef jewelry for $5000. The former is an expense, the latter is an asset.

Someone drank the kool-aid

I don’t know…do you treat a car as an asset (ie something that has residual value) or an expense (something that has essentially $0 resale value).

I don’t expect to make a profit on a car (even though during the pandemic there were many used cars worth more than the new purchase price), but I do expect to be able to resell the car for 40-50% of its new car price.

[Anonymous]

HH $300 net
-clothes, maybe a couple hundred a year. (Replace then when they get holes)
- jewelry - $400 in the last 5 years for DDs 13 bday gift (family tradition)
- car $50k in 2018 to replace a 15 year old Honda

Travel is our main expense, as we have family who live 18 hour flight away.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Our HHI is around 800K.

I think it's important to realize that certain luxury brands hold their value or go up in value, so I treat these as investments not as expenses.

For jewelry, Van Cleef and Cartier hold their value very well. For bags, the classic Chanel flap bag and the Hermes Birkin (if you can get your hands on a new one) have appreciated at the same rate as the S&P 500.

So it depends... would I "waste" $2500 on a Gucci or YSL bag that will lose more than half its value in a year? probably not, but I will save up for a small piece of Van Cleef jewelry for $5000. The former is an expense, the latter is an asset.

Someone drank the kool-aid

I don’t know…do you treat a car as an asset (ie something that has residual value) or an expense (something that has essentially $0 resale value).

I don’t expect to make a profit on a car (even though during the pandemic there were many used cars worth more than the new purchase price), but I do expect to be able to resell the car for 40-50% of its new car price.

Or keep it 10+ years and you can resell for only 20-25%, but you got several extra years of no cost use.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Our HHI is around 800K.

I think it's important to realize that certain luxury brands hold their value or go up in value, so I treat these as investments not as expenses.

For jewelry, Van Cleef and Cartier hold their value very well. For bags, the classic Chanel flap bag and the Hermes Birkin (if you can get your hands on a new one) have appreciated at the same rate as the S&P 500.

So it depends... would I "waste" $2500 on a Gucci or YSL bag that will lose more than half its value in a year? probably not, but I will save up for a small piece of Van Cleef jewelry for $5000. The former is an expense, the latter is an asset.

Someone drank the kool-aid

I don’t know…do you treat a car as an asset (ie something that has residual value) or an expense (something that has essentially $0 resale value).

I don’t expect to make a profit on a car (even though during the pandemic there were many used cars worth more than the new purchase price), but I do expect to be able to resell the car for 40-50% of its new car price.

A car is a necessary liability in my spreadsheet, as is a large primary home with a mortgage. A large primary home, even if it appreciates, costs money to maintain. Once the mortgage is paid the value of the home is part of my NW, but the costs are still a liability. Cars are similar. I wouldn't bother reselling luxury items, like a handbag - I have no time to get pennies on the dollar for small value items. Obviouslyi dont own a birkin, because some of those are more like a car. The few that I have when I'm no longer interested get donated or given to my daughter.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Our HHI is around 800K.

I think it's important to realize that certain luxury brands hold their value or go up in value, so I treat these as investments not as expenses.

For jewelry, Van Cleef and Cartier hold their value very well. For bags, the classic Chanel flap bag and the Hermes Birkin (if you can get your hands on a new one) have appreciated at the same rate as the S&P 500.

So it depends... would I "waste" $2500 on a Gucci or YSL bag that will lose more than half its value in a year? probably not, but I will save up for a small piece of Van Cleef jewelry for $5000. The former is an expense, the latter is an asset.

Someone drank the kool-aid

No, she's right. One of my family members passed the opportunity to buy a Georges Fouquet bracelet a while ago and I'm still sad about it. The Tiffany lamps are also a great investment and anything original signed Impressionism, especially oil.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Our HHI is around 800K.

I think it's important to realize that certain luxury brands hold their value or go up in value, so I treat these as investments not as expenses.

For jewelry, Van Cleef and Cartier hold their value very well. For bags, the classic Chanel flap bag and the Hermes Birkin (if you can get your hands on a new one) have appreciated at the same rate as the S&P 500.

So it depends... would I "waste" $2500 on a Gucci or YSL bag that will lose more than half its value in a year? probably not, but I will save up for a small piece of Van Cleef jewelry for $5000. The former is an expense, the latter is an asset.

I hope you don't make 800k giving financial advice.

What a strange post. This person actually gave great examples of instances where an expense can actually be an asset that appreciates, or at least doesn't depreciate that much. PP wasn't suggesting anyone invest $1MM in Birkin bags, but rather, some things have a decent up-front cost...but then you can resell that bag and buy a new one and keep doing that. You do that 10x and maybe you spend $5,000 for the first one, but you enjoyed 10 new bags and effectively paid $0 for it when you resell he 10th bag.

Bags and jewelry are depreciating assets. I don't care what you want to trick yourself into believing. The idea that you are going to make money off a 5k necklace is absurd. People with real wealth aren't buying rinky dink mass produced jewelry as an investment, and saying you do makes you look like a poorly educated rube.

Actually, it makes you look like the rube. Clearly, you don't have the $$$s to play this game, so you make yourself feel better by posting like you do.

Here are quotes from a 1/12/2024 WSJ article:

For a handful of luxury companies, resale values are flattering as buyers pay up to avoid waiting lists. On average, used Hermès handbags are 25% more expensive than new ones, and scarce designs get an even higher premium. A basic Birkin 25 bag, which costs roughly $10,000 to buy new in one of Hermès’ U.S. boutiques, will set shoppers back $24,000 or more from major resale dealers like Privé Porter. Similarly, used watches made by Rolex and Patek Philippe sell at average premiums of 20% and 39%, respectively, based on data from WatchCharts.

My hhi is in the seven figures and I have no interest in buying things just so people know how much money I have, because I'm not an insecure ahole. Beyond that, I was specifically replying to the PP (you?) who said they would "save up" for a 5k VCA necklace because it's an investment piece.

1. If you have to save up for it you can't afford it
2. The definition of an investment is that it makes you money. VCA may hold its value but no one is buying used pieces for more than retail.
https://nationaljeweler.com/articles/2303-which-jewelry-brand-has-the-highest-resale-value

I suggest you save your money and spend it on therapy to address your self esteem issues.

Wow...you are a little triggered, no? When confronted with some actual evidence vs. your conjecture, you respond with tremendous vitriol.

You actually do sound like an insecure a**hole because you don't even know how the luxury market operates. I am actually not the PP, but as someone who is wealthy, understand that there are actually many non-liquid markets (antique coins if you understand what you are doing, rare cars, etc.) that are quite lucrative.

NP here. I bought a caviar bag in the early 2000s for around 1k, wore the c* out of it and sold it for over 3k.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Our HHI is around 800K.

I think it's important to realize that certain luxury brands hold their value or go up in value, so I treat these as investments not as expenses.

For jewelry, Van Cleef and Cartier hold their value very well. For bags, the classic Chanel flap bag and the Hermes Birkin (if you can get your hands on a new one) have appreciated at the same rate as the S&P 500.

So it depends... would I "waste" $2500 on a Gucci or YSL bag that will lose more than half its value in a year? probably not, but I will save up for a small piece of Van Cleef jewelry for $5000. The former is an expense, the latter is an asset.

Someone drank the kool-aid

I don’t know…do you treat a car as an asset (ie something that has residual value) or an expense (something that has essentially $0 resale value).

I don’t expect to make a profit on a car (even though during the pandemic there were many used cars worth more than the new purchase price), but I do expect to be able to resell the car for 40-50% of its new car price.

A car is a necessary liability in my spreadsheet, as is a large primary home with a mortgage. A large primary home, even if it appreciates, costs money to maintain. Once the mortgage is paid the value of the home is part of my NW, but the costs are still a liability. Cars are similar. I wouldn't bother reselling luxury items, like a handbag - I have no time to get pennies on the dollar for small value items. Obviouslyi dont own a birkin, because some of those are more like a car. The few that I have when I'm no longer interested get donated or given to my daughter.

You are all over the place. How is a $1MM home with no mortgage a “liability” especially if it is increasing say 5% a year in value. I mean you have to live somewhere, so if you aren’t paying taxes and maintenance you are still going to have to rent something.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Our HHI is around 800K.

I think it's important to realize that certain luxury brands hold their value or go up in value, so I treat these as investments not as expenses.

For jewelry, Van Cleef and Cartier hold their value very well. For bags, the classic Chanel flap bag and the Hermes Birkin (if you can get your hands on a new one) have appreciated at the same rate as the S&P 500.

So it depends... would I "waste" $2500 on a Gucci or YSL bag that will lose more than half its value in a year? probably not, but I will save up for a small piece of Van Cleef jewelry for $5000. The former is an expense, the latter is an asset.

Someone drank the kool-aid

I don’t know…do you treat a car as an asset (ie something that has residual value) or an expense (something that has essentially $0 resale value).

I don’t expect to make a profit on a car (even though during the pandemic there were many used cars worth more than the new purchase price), but I do expect to be able to resell the car for 40-50% of its new car price.

A car is a necessary liability in my spreadsheet, as is a large primary home with a mortgage. A large primary home, even if it appreciates, costs money to maintain. Once the mortgage is paid the value of the home is part of my NW, but the costs are still a liability. Cars are similar. I wouldn't bother reselling luxury items, like a handbag - I have no time to get pennies on the dollar for small value items. Obviouslyi dont own a birkin, because some of those are more like a car. The few that I have when I'm no longer interested get donated or given to my daughter.

You are all over the place. How is a $1MM home with no mortgage a “liability” especially if it is increasing say 5% a year in value. I mean you have to live somewhere, so if you aren’t paying taxes and maintenance you are still going to have to rent something.

Does it make money for me? No
Does it cost me money to maintain? Yes
Simple

[Anonymous]

Why do people consider private school to be a luxury expense?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Our HHI is around 800K.

I think it's important to realize that certain luxury brands hold their value or go up in value, so I treat these as investments not as expenses.

For jewelry, Van Cleef and Cartier hold their value very well. For bags, the classic Chanel flap bag and the Hermes Birkin (if you can get your hands on a new one) have appreciated at the same rate as the S&P 500.

So it depends... would I "waste" $2500 on a Gucci or YSL bag that will lose more than half its value in a year? probably not, but I will save up for a small piece of Van Cleef jewelry for $5000. The former is an expense, the latter is an asset.

Someone drank the kool-aid

I don’t know…do you treat a car as an asset (ie something that has residual value) or an expense (something that has essentially $0 resale value).

I don’t expect to make a profit on a car (even though during the pandemic there were many used cars worth more than the new purchase price), but I do expect to be able to resell the car for 40-50% of its new car price.

Or keep it 10+ years and you can resell for only 20-25%, but you got several extra years of no cost use.

Admittedly, we don’t put many miles on our cars…no more than 5,000 per year, so my residuals are probably higher vs years old.